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Highlights
- The Bank of England (BoE) could delay the interest rate hike in its 16 December meeting due to Omicron and the introduction of certain restrictions in England.
- A Reuters poll found that the BoE could increase rates in Q1 next year, although its 16 December meeting may be a close call.
- Plan B restrictions introduced on Wednesday include several measures such as compulsory face masks in public indoor places, working from home for staff and more.
The uncertainty associated with the new variant Omicron and the introduction of Plan B restrictions in England might mean that the UK central bank, the Bank of England (BoE), could delay hiking interest rates in its 16 December meeting.
According to some media reports, a slim majority of experts anticipate that the BoE UK could hike rates to 0.25 per cent, from its current record low of 0.1 per cent at its meeting to be held next week, as per a Reuters poll.
The poll found that BoE could increase rates in Q1 next year, although its December meeting could be a close call.
The Plan B restrictions introduced earlier this week on 8 December include the mandatory wearing of face masks in most indoor but public environments starting from today, employees to work from home (for those who are not required to be in offices) starting from 13 December and more.
Given this context, let us look at 2 FTSE 100 index listed banking stocks, which are sensitive to interest rate changes, and explore their investment prospects:
- HSBC Holdings Plc (LON: HSBA)
HSBC Holdings is one of the major global banking and financial services company.
The banking major recently hired two new tech-focused senior investment bankers thereby expanding its Asia technology sector’s investment banking coverage.
The new hires were from another banking major, UBS Group AG.
Image source: Refinitiv
HSBC’s shares ended at GBX 440.45, up by 0.03 per cent on 9 December, while the FTSE 100 index closed at 7,321.26, lower by 0.22 per cent.
The company has a market cap of £89,566.64 million, and its year-to-date return stands at 16.38 per cent as of Thursday.
- Lloyds Banking Group Plc (LON:LLOY)
Lloyds Banking is a British banking major.
According to some media reports, Charlie Nunn, the group’s CEO, is mulling increasing its Citra Living business segment’s budget to initially about £1 billion, from an earlier budget of about £250 million.
Citra Living is Lloyd’s subsidiary for buying and managing a range of UK properties and is part of Lloyds’ plans to be a private landlord through acquiring new built properties.
Image source: Refinitiv
Lloyd’s shares ended at GBX 46.69, down by 1.41 per cent on 9 December.
The company has a market cap of £33,159.44 million, and its year-to-date return stands at 28.14 per cent as of Thursday.
Tags: HSBC Holdings, Lloyd, blue-chip stocks, bank stocks, omicron, interest rate, BoE
