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Highlights
- On Thursday, financial markets are expected to witness a sharp hike in UK interest rates.
- The interest rate, which currently stands at 1.75%, may rise to 2.5% this week.
- If the rate goes up by 0.75%, it would be the greatest rate hike in the UK since 1989.
Financial markets are braced to witness a sharp hike in UK interest rates on Thursday, with suggestions of it going further up by the end of the year. The interest rate currently stands at 1.75% and may be lifted to 2.5% this week. The financial market players expect the Bank of England (BoE) to pitch for a 0.75% hike.
If the rate goes up by 0.75%, it would be the greatest rate hike witnessed in the UK since 1989, when inflation was soaring promptly following a consumer boom. This rate hike also comes after six hikes already announced this year by the UK central bank. According to the predictions made by money markets, the interest rate may go up to 3.75% by the end of 2022. Meanwhile, BoE is also due to start with quantitative tightening.
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If the rate goes up by 0.75%, it would be the greatest rate hike witnessed in the UK since 1989, when inflation was soaring promptly following a consumer boom. This rate hike also comes after six hikes already announced this year by the UK central bank. According to the predictions made by money markets, the interest rate may even go up to 3.75% by the end of this year. Meanwhile, BoE is also due for starting with quantitative tightening.
Even though the Office for National Statistics (ONS) data showed that the UK inflation level went down in August after hitting double digits a month ago, it is still about five times higher than the BoE's 2% target level. As inflation and interest rates skyrocket, UK investors can carefully evaluate the performance of these stocks based on their annual returns.
Glencore PLC (LON: GLEN)
The commodity trading and mining enterprise market, Glencore plc, stands at £63,175.98m as of Thursday. Offering a yearly dividend yield of 2.4%, Glencore's EPS (earning per share) stands at 0.38. The company has a low P/E ratio of 4.59, and its turnover (on the book) stands at £9,623,250.33. As of 22 September, the FTSE 100 firm's annual and YTD (year-to-date) returns stand at 54.76% and 28.88%, respectively. GLEN shares were trading at GBX 485.05, dropping by 0.61%, on Thursday at around 8:30 AM (GMT+1).
Shell plc (LON: SHEL)
The market cap of the prominent British oil industry firm, Shell plc, stands at £168,444.41 million as of Thursday. Offering a yearly dividend yield of 3.7%, Shell's EPS stands at 2.59. The company has a low P/E ratio of 5.54, and its turnover (on the book) stands at £13,426,820.10. As of 22 September, the FTSE 100 firm's annual and YTD basis returns stand at 56.08% and 43.30%, respectively. SHEL shares were trading at GBX 2,323.00, dropping by 0.51%, on Thursday at around 8:30 AM (GMT+1).
BAE Systems plc (LON: BA.)
The London-based security, arms, and aerospace firm BAE Systems plc's market cap stands at £25,060.08m as of Thursday. Offering a yearly dividend yield of 3.2%, BAE System's EPS stands at 0.55. The company has a P/E ratio of 18.67, and its turnover (on the book) stands at £5,311,849.09. As of 22 September, the FTSE 100 firm's annual and YTD basis returns stand at 44.23% and 46.27%, respectively. BA. shares were trading at GBX 804.40, dropping by 0.08%, on Thursday at around 8:30 AM (GMT+1).