Housebuilders face ‘brutal squeeze’ as interest rates rise
UK consumers shrugged off the prospect of rising interest rates as confidence hit a 17-month high.
Market research firm GfK said its gauge of sentiment among Britons rose three points to minus 24 in June. Economists had expected a value of minus 26.
This comes despite expectations that interest rates will rise to 6 percent after the Bank of England announced a half-point hike to 5 percent on Thursday.
5 things to start your day
1) Andrew Bailey blames high wages for inflation | Economists criticize Bank of England governor’s comments
2) Homeowners can expect three more years of mortgage problems after the rate hike | Andrew Bailey warns inflation is “much more persistent” than predicted
3) Why the Bank of England put Britain on course for recession | More pain is on the way – and families should brace themselves for the impact
4) The mortgage crisis will wipe out the savings of 1.2 million households as repayments soar | There will be even more problems for homeowners as borrowing costs are expected to hit 6 percent
5) People will be hurt by the Bank of England’s massive blunder, and for no good reason | The bank is making the catastrophic mistake of tightening too much, leading to a global downturn
what happened overnight
Asian stocks fell sharply after several central banks around the world hiked interest rates to fight inflation.
Hong Kong and Tokyo slipped nearly 2 percent and most other regional markets fell.
Japan reported that its inflation rate was higher than expected, fueling expectations that the central bank may adjust policy to reflect upward pressure on prices, which has pushed the dollar’s value significantly higher against the yen.
The Bank of Japan has kept interest rates at minus 0.1 percent for a decade as policymakers keep credit cheap to encourage more investment and spending.
Tokyo’s Nikkei 225 was down 1.8 percent to 32,654.37 through midday and Hong Kong’s Hang Seng was down 1.9 percent to 18,845.04.
In Seoul, the Kospi fell 0.8 percent to 2,572.33, while Australia’s S&P/ASX 200 fell 1.2 percent to 7,110.40. Markets in mainland China were closed for a public holiday. Stocks also fell in Mumbai and Bangkok.
Wall Street stocks closed higher on Thursday after Federal Reserve Chair Jerome Powell warned of further monetary tightening and the Bank of England made a larger-than-expected rate hike.
The tech-rich Nasdaq Composite Index closed 1% higher at 13,630.61. The broad-based S&P 500 climbed 0.4% to 4,381.89, while the Dow Jones Industrial Average was basically flat at 33,946.71.
Canada’s Senate passed legislation on Thursday that would require Google and Meta to pay media companies for news content they share or otherwise reuse on their platforms.
Meta responded, confirming that it intends to comply with the law and end news availability on Facebook and Instagram for its Canadian users.