UK economy overheating, warns Blackrock

Interest rates in the UK are expected to rise to their highest levels since 2008 today amid an “overheated” economy.

According to economists and financial markets, the benchmark interest rate will rise to 4.5% for the 12th straight day as inflation continues to rise.

Alex Brazier, deputy head of the Blackrock Investment Institute, the research arm of the world’s largest wealth manager, said the Bank of England was faced with a compromise as the economy was “overheating” but had to decide “what price it was willing to pay”. lower inflation.

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what happened overnight

Asian stocks were mixed in a choppy trade after a report showed signs that inflation in the United States was cooling, although it is still too high.

Tokyo’s main Nikkei index closed unchanged on Thursday, with investors watching corporate earnings reports in Japan, while the broader Topix index slipped 0.1 percent to 2,083.09.

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Australia’s S&P/ASX 200 slipped 0.1 percent to 7,249.00. South Korea’s Kospi rose 0.1 percent to 2,499.99.

Hong Kong’s Hang Seng slipped 0.4 percentage points to 19,693.89, while the Shanghai Composite was little changed, rising less than 0.1 percentage point to 3,319.53.

Wall Street shares rose mostly on Wednesday as better inflation data offset worries about stalled talks between leaders that had raised fears of a US default.

According to the US Department of Labor, US inflation, as measured by the consumer price index (CPI), rose 4.9 percent year-to-date through April, compared with 5 percent in March.

Although inflation remains well above the Federal Reserve’s target, market analysts said the improvement could be enough to halt further rate hikes.

The Dow Jones Industrial Average closed 0.1% lower at 33,531.33.

The broad-based S&P 500 was up 0.5% to 4,137.64, while the tech-heavy Nasdaq Composite Index was up 1% to 12,306.44.

The two-year government bond yield, which normally moves in line with interest rate expectations, fell to 3.91 percent from 4.05 percent after the CPI report. The benchmark 10-year yield fell 8.1 basis points to 3.44 percent.


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