Thanks for joining me. British executives have urged the Bank of England to cut interest rates as soon as possible to boost the economy as “depressed” confidence sank to a four-year low.
The Institute of Directors’ (IoD) latest economic confidence index, which measures bosses’ optimism about the UK economy over the year ahead, sank to its lowest level since August in December.
The reading of minus 28, down from minus 21 in November, was close to the 2023 low point of minus 30 recorded in June.
It showed bosses ended 2023 in a “relatively depressed place,” according to IoD director of policy Roger Barker.
He said: “In the coming months, the Bank of England will be considering its next step in term of interest rates.
“Based on the evidence of this survey, an early cut in interest rates would be justified in terms of helping to kick-start business confidence.”
Money markets are betting that the first interest rate cut by the Bank of England will happen by May.
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What happened overnight
Asian shares dropped after Wall Street and the City of London started 2024 with a slump.
Hong Kong’s Hang Seng lost 1pc to 16,618.50, influenced by a 2pc drop in technology shares, while the Shanghai Composite index gained 0.1pc to 2,966.13.
Prices of Chinese gaming companies rose, with Tencent Holdings and Netease both adding over 1pc following local reports that a senior official responsible for overseeing China’s gaming industry had been dismissed after the release of draft regulations last month spurred a meltdown in gaming stocks just days before Christmas.
Australia’s S&P/ASX 200 slipped 1.4pc to 7,523.20. South Korea’s benchmark slumped 2.3pc to 2,607.31 after hovering around a 19-month high Tuesday amid the short-selling ban.
Bangkok’s SET lost less than 0.1pc and India’s Sensex was down 0.4pc.
Japanese markets remained closed for the New Year holiday.
The S&P 500 index of American shares fell 0.6pc yesterday to 4,742.83. Meanwhile, the Dow Jones Industrial Average of 30 leading US companies rose 0.1pc to 37,715.04 and the Nasdaq Composite index, heavily weighted towards technology shares, fell 1.6pc to 14,765.94.
The dollar rose against major currencies as the yield on 10-year Treasury bonds rose rose 7.3 basis points to 3.933pc – an indication that the markets were a little less confident yesterday of interest rate cuts in 2024.
