After closing at a 10-month high yesterday (30 June) at 6,504.30 points, the FTSE 100 index of the largest companies listed on the London Stock Exchange has continued its rally. At the time of writing this morning (1 July) it was sitting at 6,532.19
There are a multitude of factors for this sharp – and, it has to be said, unexpected rise – one of which being Mark Carney, the governor of the Bank of England (BoE), who gave a confident and measured speech on late Thursday afternoon, just before the markets closed.
Mr Carney suggested that “some monetary policy easing” would be required in the face of deteriorating economic outlook and warned of a “material slowing” in growth. This is a big hint at further bouts of quantitative easing (QE), whereby the BoE buys great numbers of government bonds with ‘new’ money in order to introduce additional funds into the economy, which is done with the aim of encouraging lending to people and businesses.
Mr Carney also hinted an interest rate cut was on the cards, which, essentially, would make for cheap borrowing.
He finished his speech by saying that, “The question is not whether the UK will adjust but rather how quickly and how well.”