Bank of England is right in delaying rate hikes as pound slumps, says investment director
The UK’s central bank should not rush to raise interest rates, according to Julian Howard, chief investment director of Multi Asset Solutions at GAM Investments, despite the slump in the pound.
“I don’t think the Bank of England’s job is to support the pound,” Howard told CNBC’s Squawk Box Europe on Tuesday.
“I prefer to see this as a global phenomenon and I think the Bank of England should hold off on raising interest rates further,” he said.
He also said that talking about the UK becoming an emerging market is “a little premature”.
“Some even said we’re becoming a Mediterranean country, but without the weather — I think that’s too harsh,” Howard said.
“I think in the medium term [deregulation and tax cuts] could be very helpful, but the market has decided to ignore it,” he told CNBC.
— Hannah Ward-Glenton
Stocks on the move: Nexi up 6%, Vitrolife down 9%
Shares Nexi gained 6% early in trading to lead the Stoxx 600 after the Italian payments group published its new business plan, in which it forecasted EUR 2.8 billion ($2.7 billion) in excess between 2023 and 2025. cash flow would be generated for M&A and share repurchases.
At the bottom of the European blue chip index, Swedish IVF company Vitrolife fell more than 9%.
CNBC Pro: Here’s Dan Niles Betting His Money
“We made money today. We’re up in August. We’re ready for the year,” fund manager Dan Niles told CNBC.
As major stock markets remain deeply in the red this year, the investment veteran shares what he buys in this volatile market.
Pro subscribers can read more.
— Zavier Ongo
Fed’s Mester Says It’s Better to Be ‘Aggressive’ Against High Inflation
US inflation is “unacceptably high” and uncertainties make monetary policy decisions “not trivial,” Cleveland Fed president Loretta Mester said in prepared remarks to the Massachusetts Institute of Technology.
“When there is uncertainty, it may be better for policymakers to act more aggressively,” she said. “Aggressive and preventive action can prevent the worst-case outcomes from actually happening.”
She said she will be “very cautious” in assessing inflation data.
“I’m going to have to see several months of declines in the month-over-month readings,” she said. “Wishful thinking cannot be a substitute for compelling evidence.”
—Jihye Lee
World Bank lowers growth forecasts for East Asia and the Pacific
The World Bank has cut its full-year growth forecast for the East Asia-Pacific region for 2022 to 3.2% from its 5% forecast in April, it said in its latest report released Tuesday.
“The slowing growth is mainly due to China,” it said, adding that the organization also lowered its 2022 forecast for the country from 5% to 2.8%. The World Bank expects China to grow by 4.5% in 2023.
According to the report, median headline inflation will exceed 5% this year, an upward revision from the 3% forecast earlier in April.
—Jihye Lee
CNBC Pro: Analysts like Nvidia again, with Citi rocking it almost 100%
Analysts are again starting to get optimistic about Nvidia after the semiconductor giant lost favor due to geopolitical tensions and a slowdown in the chip sector.
Citi and JPMorgan both said last week that solid demand for PC gaming, as well as cloud adoption in data centers, would be the tailwind for Nvidia.
So how much advantage have they each given Nvidia stock? CNBC Pro subscribers can read more here.
— Weizhen Tan
Wed, Aug 17 202212:29 EDT
European markets: these are the opening calls
European equities are expected to open in negative territory on Wednesday as investors react to the latest US inflation data.
The UK’s FTSE index is expected to open 47 points lower at 7,341, Germany’s DAX 86 points lower at 13,106, France’s CAC 40 down 28 points and Italy’s FTSE MIB 132 points lower at 22,010, according to data from IG.
Global markets have retreated after a higher-than-expected U.S. consumer price index report for August, which showed prices rose 0.1% for the month and 8.3% annually in August, the Bureau of Labor Statistics reported Tuesday, defying the expectations of economists who monitor inflation. would fall by 0.1% monthly.
The core CPI, which excludes volatile food and energy costs, rose 0.6% from July and 6.3% from August 2021.
UK inflation figures for August are expected and Eurozone industrial production for July will be released.
— Holly Ellyatt