Bank of England poised for 10th interest rate rise in a row - latest updates

The Bank of England is expected to raise interest rates for the 10th consecutive time - AP Photo/Frank Augstein
The Bank of England is expected to raise interest rates for the 10th consecutive time - AP Photo/Frank Augstein

The Bank of England is expected to raise interest rates for the tenth consecutive meeting as it battles to bring down soaring inflation.

Economists have predicted that the Bank’s Monetary Policy Committee will raise rates by 50 basis points to 4pc when they meet today.

That would put rates at their highest level since October 2008, when the global financial crisis was beginning to take hold.

Last time the committee met, when it raised the base rate by half a percentage point to 3.5pc, policymakers were split three ways over how much to increase interest rates.

Bank of England Governor Andrew Bailey has been under fire for allowing inflation to reach a 41-year-high of 11.1pc in October, more than five times the 2pc target.

Inflation has come down for two consecutive months since then and sits at 10.5pc.

The US Federal Reserve opted to raise rates by 0.25 percentage points on Wednesday to 4.5 to 4.75pc, although Fed chairman Jerome Powell said the bank had "more work to do" to bring inflation back to its 2pc target.

The European Central Bank is expected to raise its deposit rate by 50 basis points to 2.5pc.

Read the latest updates below.

11:45 AM

Covid pill sales boost Merck

Merck has reported higher-than-expected fourth-quarter earnings on strong sales of its Covid antiviral pill molnupiravir in Asia.

The US drugmaker said its sales in the quarter were $13.8bn (£11.1bn), up from $13.5bn (£10.9bn) a year earlier. Analysts had expected sales of $13.7bn, according to Refinitiv data.

Excluding items, Merck earned $1.62 a share, exceeding Wall Street expectations of $1.54 a share.

Sales of molnupiravir were $825m in the quarter, well over double analyst estimates of around $358m.

Merck chief executive Rob Davis said the pandemic wave that moved through Asia in the fourth quarter drove sales of molnupiravir, which is sold under the brand name Lagevrio, particularly in Japan, South Korea and other areas of the Asia Pacific region.

Mr Davis: "That really was the strength, and we've seen very good demand for Lagevrio in those markets. In Japan, we are a market leader."

Merck - AP Photo/Seth Wenig
Merck - AP Photo/Seth Wenig

11:25 AM

Musk says locking Twitter account identified 'some issues'

Elon Musk's test to see how locking his account affected the engagement on his posts helped to identify "issues with the system" the company will address by next week, he said in a tweet.

Twitter's chief executive locked his account early Wednesday after users of the social media site claimed that setting an account to private dramatically improved the number of likes and views their tweets received.

He unlocked it about 24 hours later.

Right-wing commentator Ian Miles Cheong tweeted on Tuesday the results of a test, indicating that a tweet sent when his account was set to private, had a far greater reach than the same tweet posted when his account was set to public.

Mr Musk responded that this was "extremely concerning" and later pledged to conduct his own experiment.

It is the latest in a series of experiments Mr Musk has conducted since he bought Twitter for $44bn (£36bn) in late October, which included using a Twitter poll to ask people if he should stay on as chief executive and switching the timeline to default to an algorithmic feed.

11:10 AM

British Steel offered 'generous package' of taxpayer money

Government has put forward a "generous package of support" for British Steel, a minister has confirmed, amid reports that the company is considering axing 800 jobs.

Industry minister Nusrat Ghani said it was "a peculiar way to do business" to hold a meeting with unions on Wednesday, where it discussed job cuts, while negotiations are ongoing.

In response to an urgent question from Holly Mumby-Croft, the MP for Scunthorpe, where British Steel's main plant is based, Ms Ghani told the Commons:

It is very disappointing that British Steel has chosen to take this step while negotiations with the Government are ongoing.

The Business Secretary and I have always been clear that the success of the British steel industry is a priority and we will work intensively with British Steel on support to help safeguard and unlock shareholder investment.

British Steel's Scunthorpe plant in north Lincolnshire - LINDSEY PARNABY/AFP via Getty Images
British Steel's Scunthorpe plant in north Lincolnshire - LINDSEY PARNABY/AFP via Getty Images

10:58 AM

Pound drops ahead of Bank of England decision

The pound has lost 0.5pc against the dollar as traders get jitters ahead of the Bank of England's interest rate decision at lunchtime.

Sterling is trading just above $1.23 and will have lost some ground after the US Federal Reserve lifted the target US interest rate by 0.25 percentage points to 4.5 to 4.75pc.

10:46 AM

Oil prices flat following 2.5pc slide

Oil prices are flat after  slumping on Wednesday as the US dollar fell and traders weighed the potential for better demand in China.

Brent crude, the international benchmark, is trading below $83 after its prices took a 2.5pc hit on Wednesday following Federal Reserve's signal that it is making progress on battling inflation.

This implies to traders that it will slow the pace of its interest rate rises, weakening the dollar, which oil prices are calculated against.

US-produced West Texas Intermediate is below $77 a barrel after losing 3.1pc in the previous session following another build in US stockpiles.

10:15 AM

Shell profits 'immoral', say fuel campaigners

The reaction continues to pour in about Shell's mammoth profits, which hit a record $39.9bn (£32.2bn) last year in the wake of the surge in oil and gas prices triggered by the war in Ukraine.

Unite general secretary Sharon Graham said people "will be totally aghast" at the scale of Shell's profits. She said:

Millions cannot afford to heat their homes and businesses can't pay their fuel bills. Meanwhile Shell shareholders are laughing all the way to the bank.

Shell's £5 billion of dividends would go a long way towards paying for a 10pc wage hike for NHS workers.

Howard Cox, founder of FairFuelUK said that in a time of crippling energy and fuel costs, Shell's profits are "obscene". He said:

Pump prices are still 10p-20p per litre artificially high and contribute big time to Shell's UK profits.

These odious levels of record income generation are immoral.

They only benefit already well off individuals and pension funds and of course the Treasury, which is wallowing in record VAT receipts because of the last two years inflated punitive filling up costs.

10:02 AM

Gas prices fall as US plant nears restart

European gas futures fell as much as 4.3pc and have since fluctuated as traders weighed ample stockpiles and progress on restarting a long-shut US liquefied natural gas plant against the chance that demand may start picking up again.

Benchmark contracts swung between small gains and losses and are down 2.3pc at just above €58 per megawatt hour.

Freeport LNG in Texas, shuttered by an explosion last summer, have been given further approvals to restart activities, meaning there should be more fuel shipments later this quarter.

That should further bolster Europe's supply, after a mild winter and energy-saving efforts allowed inventories to stay at higher-than-normal levels.

Still, the market is closely watching for any signs of higher demand — both in Europe and Asia — a key risk for tight global supplies given Russia’s severe cuts in exports.

It comes as Shell chief executive Wael Sawan said: "I would not declare an end to the energy crisis. I think we have a way to go."

09:43 AM

British Gas investigated over allegations debt collectors broke into homes

The energy regulator has launched an urgent investigation into British Gas after reports that it sent debt collectors to break into customers' homes and force-fit pay-as-you-go meters.

British Gas said it will temporarily stop using court orders that permit the forced installation of prepayment meters in people's homes after a report in The Times newspaper said the practise was being used against vulnerable people.

An Ofgem spokesperson said:

These are extremely serious allegations from The Times. We are launching an urgent investigation into British Gas and we won’t hesitate to take firm enforcement action.

It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted and without carrying out thorough checks to ensure it is safe and practicable to do so.

We have launched a major market-wide review investigating the rapid growth in prepayment meter installations and potential breaches of licences driving it.

We are clear that suppliers must work hard to look after their customers at this time, especially those who are vulnerable. The energy crisis is no excuse for unacceptable behaviour towards any customer, particularly those in vulnerable circumstances.

09:28 AM

Shell boss 'would not declare the end of the energy crisis'

Following Shell's record profits, chief executive Wael Sawan said the world has "a way to go" before the crisis over energy prices eases.

He told Bloomberg Television:

I would not declare the end of the energy crisis. I think we have a way to go.

The amount of rewiring of energy flows over the past year has been huge and we expect to see that continue into the coming months and years.

In 2022, the mild weather in Europe has helped in reducing some of the draw on energy.

At the same time there has been a destruction on demand in certain areas, in particular the industrial sector, so this is going to be a journey of years and I would caution anyone who looks ahead and assumes that the worst is over.

09:07 AM

Heathrow boss to step down after nine years

Heathrow chief executive John Holland-Kaye has announced he will step down this year after guiding the airport through the turmoil of the pandemic.

Mr Holland-Kaye was credited by the company with developing a consumer-focused culture, improving cost efficiency and putting Heathrow at the forefront of global aviation's decarbonisation during his tenure.

Heathrow chairman Lord Deighton said:

John has been an extraordinary leader of Heathrow.

During the past nine years, he has worked tirelessly and collaboratively with shareholders, ministers, airlines and other stakeholders to ensure the country can be proud of its 'front door'.

The board would like to put on record our gratitude to John for his dedication and commitment to Heathrow throughout his tenure as chief executive.

Heathrow chief executive John Holland-Kaye will step down this year - Yui Mok/PA Wire
Heathrow chief executive John Holland-Kaye will step down this year - Yui Mok/PA Wire

09:03 AM

Adani stock wipeout deepens past $100bn after share sale pulled

The crisis engulfing Gautam Adani is worsening as his conglomerate of companies' shares and bonds tumbled to new lows.

It has heightened concern about the Indian billionaire's access to financing in the wake of fraud allegations by short seller Hindenburg Research.

The tycoon's flagship Adani Enterprises sank as much as 20pc overnight, adding to a 28pc tumble in the previous session that prompted the company to abandon a $2.4bn follow-on share sale and return the money to investors.

His business empire has now lost more than $100bn (£80.8bn) — more than a third of its value — since Hindenburg unveiled its short position. The group's key dollar bonds are trading at distressed levels and signs of contagion in Indian markets are increasing.

Adani's company has rebutted the fraud claims and the billionaire himself said in a video speech on Thursday that the scrapped equity offering will have no impact on operations.

Indian billionaire Gautam Adani addressing investors in a video call - Adani Enterprises ltd via AP
Indian billionaire Gautam Adani addressing investors in a video call - Adani Enterprises ltd via AP

08:38 AM

Markets surge amid optimism over interest rate rises

Britain's main stock indexes rose after Shell's record profits, and led by optimism after the Federal Reserve said it had turned a key corner in the fight against inflation.

The blue-chip FTSE 100 has risen 0.5pc to 7,806.51 after slipping for the past two sessions, while the domestically focussed FTSE 250 index has added 1pc to 20,104.29.

Wall Street's main indexes closed sharply higher on Wednesday after Fed chairman Jerome Powell acknowledged that inflation was starting to ease in remarks he made following a quarter-point rate increase by the US central bank.

The Bank of England is poised to raise rates for the 10th time in a row later to keep up its fight against rampant inflation, but it could also drop a hint about when the steep climb in borrowing costs will end.

Shell rose 1.5pc after the oil giant delivered a record $39.9bn (£32.2bn) profit in 2022 and announced a new $4bn (£3.2bn) share buyback programme over the next three months.

Ad firm WPP climbed as much as 5.2pc on the FTSE 100 after its French rival Publicis Groupe forecast more growth in 2023, banking on sustained investments in digital transformation.

BT slipped as much as 3.5pc after Britain's biggest broadband and mobile operator reported a 3pc dip in third-quarter adjusted revenue, just below market expectations.

08:28 AM

Windfall tax has 'massive loopholes,' says Miliband

Shadow climate change and energy secretary Ed Miliband has criticised "massive loopholes" in the Government's windfall tax scheme as Shell reported record annual profits.

Shell said it paid $1.9bn (£1.5b) in windfall taxes in the UK and EU.

He told BBC Radio 4's Today programme:

At one and the same time, you've got millions of people who cannot afford heat and power, you've got a government that is saying 'there's nothing we can do', prices are going to go up by another 40pc in April and at the same time Shell are making record profits - the windfalls of war - in unexpected, unearned profits and the Government that fails to levy a proper windfall tax with massive loopholes for fossil fuel companies.

That is why this country has to change.

First, the windfall tax didn't apply for half of last year. Secondly, they are levying it at a lower rate than other countries - and we have called for it to be at 78pc. Thirdly, and this is headscratching, they have built in a massive loophole just for fossil fuel companies so that if they make so-called investments they get massive tax breaks for that.

They are incentivising investments in fossil fuels, not in renewables, and giving back massive windfalls to those companies who are actually paying out far more in shareholder buybacks and dividends than they are actually investing in the low-carbon economy.

08:18 AM

No plans to take Superdry private, says founder

Superdry founder Julian Dunkerton said he has no plans to take the clothing retailer private "at the moment".

The British fashion chain's chief executive issued a statement to the stock exchange this morning following speculation about such a move.

The company's shares are valued at less than a quarter of their price when the business went public more than a decade ago.

Superdry's founder says there are no plans to take the company private 'at the moment' - REUTERS/Andrew Kelly
Superdry's founder says there are no plans to take the company private 'at the moment' - REUTERS/Andrew Kelly

08:04 AM

FTSE 100 rises after record Shell profits

The FTSE 100 has begun the day higher after Shell reported record profits that are among the highest in British corporate history.

The blue-chip index has climbed 0.3pc to 7,785.48 while the midcap FTSE 250 is up 1pc to 20,047.76.

07:56 AM

Greenpeace launch protest outside Shell headquarters

Activists from Greenpeace have begun a protest over Shell's record profits.

They have set up a mock-petrol station price board displaying the Shell's net profit for 2022 outside the company's headquarters in London.

The group accused the company of "profiteering from climate destruction and immense human suffering".

Elena Polisano, a senior UK campaigner at the group, said: "While Shell counts their record-breaking billions, people across the globe count the damage from the record-breaking droughts, heatwaves and floods this oil giant is fueling.

"This is the stark reality of climate injustice, and we must end it.

"World leaders have just set up a new fund to pay for the loss and damage caused by the climate crisis. Now they should force historical mega polluters like Shell to pay into it."

Activists from Greenpeace set up a mock-petrol station price board outside its London headquarters - DANIEL LEAL/AFP via Getty Images
Activists from Greenpeace set up a mock-petrol station price board outside its London headquarters - DANIEL LEAL/AFP via Getty Images

07:48 AM

Shell profits 'outrageous' says Lib Dems

In response to energy giant Shell's record profits, the Liberal Democrats said Rishi Sunak has failed to take action with a proper windfall tax.

Lib Dem leader Sir Ed Davey said:

No company should be making these kind of outrageous profits out of Putin's illegal invasion of Ukraine.

Rishi Sunak was warned as chancellor and now as Prime Minister that we need a proper windfall tax on companies like Shell and he has failed to take action.

Families across the country are struggling to heat their homes and feed their families and this Government turns round and says 'there is nothing we can do'.

They must tax the oil and gas companies properly and at the very least ensure that energy bills don't rise yet again in April.

07:46 AM

Bank of England expected to increase interest rates to 4pc

The Bank of England is expected to raise interest rates by as much as half a percentage point at midday as it seeks to tame the double-digit inflation fuelling the cost-of-living crisis, public-sector strikes and fears of recession.

The move would push interest rates to 4pc.

Economists suggest this may be the last big rate increase for the Bank, which has approved 10 consecutive rises since a post-pandemic surge in the world economy and Russia's war in Ukraine drove inflation to 40-year highs.

The US Federal Reserve has already begun tapering its response, boosting its key rate by just a quarter-point on Wednesday.

The European Central Bank, meanwhile, is expected to go big again, with a half-point hike on Thursday.

The Bank of England's next interest rate decision will be revealed at midday - AP Photo/Kin Cheung
The Bank of England's next interest rate decision will be revealed at midday - AP Photo/Kin Cheung

07:36 AM

BT revenues dip amid 'tough' conditions for business

BT has reported a 3pc drop in its third-quarter revenues as it flagged "tough" market conditions in its consumer-facing business.

The group saw consumer revenues drop 6pc to £2.4bn in the three months to December 31, but earnings in the division lifted 7pc to £669m amid recent price rises, a surge in new fibre broadband customers and action to cut costs.

Underlying earnings across the wider group lifted 2pc to £2bn over the quarter, BT added.

BT shares have lost almost half their value four years into Philip Jansen's tenure as chief executive as it has battled energy inflation, strikes and a ban on key supplier Huawei.

BT said its consumer arm put in a "strong performance in tough market conditions".

Mr Jansen said: "We've grown revenue and EBITDA (underlying earnings) on a pro-forma, like-for-like basis, despite a challenging economic backdrop, and we're transforming BT Group for the benefit of our customers."

He added: "Despite extraordinary energy costs and other inflationary headwinds, we are reaffirming our outlook for the year."

BT - BT/PA Wire
BT - BT/PA Wire

07:31 AM

Shell rewards shareholders with $4bn buyback

Flush with cash, Shell will be rewarding its shareholders following its record results.

Special correspondent Matt Oliver explains:

The company said it had handed $6.3bn to shareholders in the quarter, through $1.8bn in dividends and a share buyback scheme worth $4.5bn. In 2022, share buybacks have totalled $18.4bn.

Shell said it was now launching another $4bn buyback programme as well, to be completed within the first three months of 2023.

The decision is likely to trigger further political controversy.

Joe Biden, the US President, has accused the oil giants of "war profiteering" and argues they should be piling investment into ramping up production - rather than the pockets of shareholders.

07:29 AM

Shell posts one of biggest ever profits made by a British company

Shell has more than doubled its annual profit to a record $39.9bn (£32.2bn) as the war in Ukraine and the energy crisis fuelled oil and natural gas prices.

The figure is one of the highest profits ever posted by a British company after Vodafone's £60bn in 2014 - following the sale of Verizon Wireless - and British American Tobacco's £38bn in 2017.

The energy giant also plans to increase its dividend by 15pc and boosted the mood among shareholders further by announcing a $4bn (£3.2bn) share buyback programme.

It made also a record $9.8bn (£7.9bn) profit in the final three months of last year, well ahead of analyst estimates of $8.3bn (£6.7bn).

The bumper profits have sparked protests by Greenpeace activists outside the company's headquarters in London.

Chief executive Wael Sawan said: "We intend to remain disciplined while delivering compelling shareholder returns.

"Our results in the fourth quarter and across the full year demonstrate the strength of Shell's differentiated portfolio."

It comes as the boss of BP said he wants to "dial back" its push into clean energy after US oil giants posted record profits on the back of booming demand for fossil fuels.

US giant Exxon Mobil posted a record $56bn (£45bn) annual profit after oil and gas prices soared following Russia's invasion of Ukraine.

Shell has posted a record-breaking $39.9bn (£32.2bn) annual profit after surging energy prices in 2022 delivered a blowout year for Big Oil.

Special correspondent Matt Oliver has the details:

The London-based company said profits more than doubled from $19.3bn, after sales soared from $261.5bn to $381.3bn.

The figures included a profit of $9.8bn in the final three months of the year, following earnings of $30.5bn in the first nine months.

It marks the biggest annual profit the company - and possibly any British-domiciled company - has ever made, eclipsing even the $31bn made by Shell in 2008.

Oil majors Exxon Mobil and Chevron have also revealed unprecedented profits for 2022 after Russia's invasion of Ukraine sent oil and gas prices rocketing higher.

Wael Sawan, Shell's boss, said the results demonstrated the company's "differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world".

07:25 AM

Good morning

Shell is prioritising shareholders as it finds itself flush with cash following the surge in oil and gas prices caused by the war in Ukraine.

The company reported a record $39.9bn (£32.2bn) annual profit, beating its previous record of $28.4bn (£22.9bn) set in 2008.

In response, it has announced a $4bn share buyback, designed to boost its stock price, while also ramping up its dividend to 15pc.

5 things to start your day

1) Mark Zuckerberg announces $40bn share buyback at Meta after first revenue slump in history | The social media giant has faced criticism since its corporate tilt towards the metaverse

2) BP to cut back on green shift amid booming demand for fossil fuels | Energy giant plans to ‘dial back’ green investment and commit to maximising profits

3) US Fed signals more rate rises to come as Powell says: ‘The job is not done’ | The central bank chairman said the bank had “more work to do” to bring inflation back to its 2pc target

4) Aldi ripped off M&S light-up gin bottles, High Court rules | German discounter plans to appeal decision over ‘Infusionist’ drinks

5) NatWest chief Alison Rose under pressure over bank’s poor savings rates | MPs to question bosses on why returns have not kept pace with interest rate rises

What happened overnight

Asian stocks rose on Thursday while the dollar eased after US Federal Reserve Chair Jerome Powell said a "disinflationary" process was under way.

MSCI's broadest index of Asia-Pacific shares outside Japan grew 0.84pc, while Japan's Nikkei climbed 0.37pc and Australia's S&P/ASX 200 index added 0.37pc.

Chinese stocks were 0.11pc higher and Hong Kong's Hang Seng Index was up nearly 1pc.

Tokyo's key stock index closed higher, tracking a rally on Wall Street but gains were limited with investors cautious over a strengthening yen.

The benchmark Nikkei 225 index added 0.2pc to 27,402.05, while the broader Topix index lost 0.4pc to 1,965.17.

The US central bank announced an expected 25 basis points interest rate increase after a year of larger hikes and said it had turned a key corner in the fight against a high inflation rate. But policymakers projected "ongoing increases" in borrowing costs would still be needed.