Key facts
- The Bank of England is expected to hold interest rates at 3.75% today.
- The FTSE 100 is forecast to decline after reaching a record high.
- President Trump issued a strong warning to Iran following attacks on US forces.
- Brent crude oil prices increased by over six percent.
- US stock markets, including the Nasdaq and S&P 500, fell.
- The Federal Reserve maintained its interest rate for the fifth consecutive meeting.
The FTSE 100 is anticipated to open lower on Thursday, following escalating tensions between the US and Iran after President Trump issued a stern warning. Simultaneously, the Bank of England's Monetary Policy Committee is expected to announce its decision on interest rates at 12 pm, with analysts predicting they will remain unchanged at 3.75 percent.
Despite the potential for future rate hikes due to global economic shocks from the war in Iran, the MPC is likely to hold rates steady for now. This comes as the FTSE 100 is forecast to fall after hitting an all-time high of 10,951 on Wednesday. Investors are digesting President Trump's strong remarks to Fox News, stating the US would "beat the fing s out of them" in response to Iran's attacks on American forces in the Middle East.
In line with the geopolitical developments, Brent crude oil, the international benchmark, surged over six percent to $89 per barrel on Wednesday. US markets experienced a downturn, with the Nasdaq and S&P 500 falling as investors reacted to the heightened tensions. The Federal Reserve also voted to maintain its interest rate for the fifth consecutive time, citing a slowdown in inflation last month.