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London’s FTSE 100 closed 0.58% higher on Monday, after three consecutive sessions in the red, ahead of monetary policy decisions from the UK’s central bank, alongside its counterparts from the US, Europe and Japan, during the week.
“The Bank of England (BoE) will likely hold bank rate at 3.75% next Thursday, 19 March,” Berenberg said. “Rather than sticky services price inflation, the surge in global energy prices will justify the decision. At the time of the 5 February interest rate decision the Bank of England (BoE) forecast that CPI inflation would drop to 2.1% in April, within a hair’s breadth of the 2% target. That will not happen now – we expect it to be at least 2.6%. … Even in our base case, in which the Strait of Hormuz opens by the end of March, we have pushed back the Q2 cut in our forecast from 30 April to 18 June.”
Meanwhile, Deutsche Bank Research expects all four central banks to hold rates this week as differing remarks from the US and Iran stoke fears of an extended conflict and a sustained period of high oil prices. US President Donald Trump told NBC on March 14 that he rejected Iran’s advances to cut a deal as the terms are not “good enough yet.” However, Iranian Foreign Minister Abbas Araghchi said, “We don’t see any reason why we should talk with Americans.”
Additionally, investors will focus on UK labor data due Thursday, followed by the public sector borrowing and industrial trends numbers on Friday.
In corporate news, Segro (SGRO.L) rose 2.71% to become one of the top performers on the blue-chip index after the industrial and data center property company agreed to develop a powered shell data center on the Slough Trading Estate in Slough, UK. Segro also received planning committee approval for its joint data center project at Segro Premier Park in west London.
AstraZeneca (AZN.L), meanwhile, said its Imfinzi combination treatment was approved by the European Commission for certain patients with gastric and gastroesophageal junction cancers. The drugmaker was 0.01% in the red.