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FTSE 100 flat on US Independence Day

by LLB Editor
4th Jul 23 10:45 am

The FTSE 100 started Tuesday flat and with the US markets largely closed for Independence Day it could struggle for direction throughout the trading session.

AJ Bell investment director Russ Mould said: “Earlier this year housebuilders were breathing a sigh of relief as the surging mortgage rates seen in the wake of the mini-Budget eased. That’s no longer the case amid sticky UK inflation and the prospect of higher rates for longer.

“Ahead of a string of updates from the sector, negative commentary from investment bank JPMorgan is putting the likes of Persimmon and Barratt Developments on the back foot.

“The pressures on households caused by the UK’s inflation problem led regulators and politicians to take a more active interest in the activities of consumer-facing businesses. First supermarkets were in the crosshairs and now the banks are being summoned to the FCA to explain why mortgage rates are going up more quickly than savings rates.

“In a global context there was some relief, reflected in gains in Asia Pacific markets, at the decision by the Australian central bank to keep interest rates unchanged. It is holding fire as it waits to see the impact of its previous hikes. Playing the waiting game has logic for monetary policy makers given the typical lag between increasing rates and seeing the full impact on the economy.”

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