The FTSE 100 made a positive start to what could be a pivotal day in determining the next move for global markets.
AJ Bell investment director Russ Mould said: “Investors seem to have anticipated the US Federal Reserve will deliver a 0.75 percentage point increase in rates tonight so the focus is likely to be on whether it goes even further, amid some fairly wild talk of a full percentage point hike. There will also be plenty of attention afforded to the commentary made around the decision.
“The Fed will have hoped to engineer a soft landing for both the economy and markets alike as it tackled inflation. But it is looking more like a potential crash landing as things stand.
“Where the Fed leads, other central banks are likely to follow, and attention will switch almost immediately to tomorrow’s decision from the Bank of England.
“Recent weak economic data in the UK may affect the thinking of policy makers at the Bank of England. However, they can’t afford to be in any way complacent about the threat posed by rising prices.
“Premier Inn owner Whitbread has delivered what looks like a very robust trading update as it faces up to mounting inflationary pressures.
“Trading in both the UK and Germany, which has been the ugly stepchild of the group thanks to the lingering impact of Covid restrictions, is ahead of expectations.
“News the company will invest £30 million in labour, refurbishments and IT in 2023 may have created a frisson of concern for shareholders.
“However, this looks a sensible decision for the long-term health of the business and the value-based Premier Inn proposition could prove attractive when household budgets are tight but people still want to get away.
“Fine-tuning the product and paying a decent wage in a tight labour market to ensure it is supported by good staff are choices which could pay off down the line.
“There was also boost for the UK market on chatter that former FTSE 100 Cambridge chipmaker ARM might list some of its shares in London alongside a main listing in the US.
“There have been efforts to make the London market a hub for technology companies, asector which is heavily underrepresented at present. A return for ARM, after a delisting necessitated by the 2016 acquisition of the group by Japan’s Softbank, would represent ababy step in the right direction.”
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