Bank of England Decision Looming Keeps UK Markets In Hold Pattern

UK markets are bracing themselves for the upcoming Bank of England interest rate decision, while corporate news, such as NatWest's acquisition of parts of Sainsbury's Bank and the shock rate cut by the Swiss National Bank, has kept investors on their toes.

There are some notable big movers through the early part of today, whilst the FTSE 100 index and FTSE 250 both trade marginally green on the day.

Big Movers

Amidst the corporate flurry, CMC Markets shares (LON: CMCX) jumped by 9.25% following the publication of full-year results. The company reported a striking 52% rise in adjusted profit before tax, which reached £80 million. Moreover, CMC Markets provided new revenue guidance that suggests earnings will exceed the consensus, hinting at a substantial increase in earnings per share.

Conversely, Tate & Lyle stock (LON: TATE) value dipped nearly 7% after the announcement of a sizable acquisition. The company is set to purchase US competitor CP Kelco in a deal valued at $1.8 billion. Coupled with this, Tate & Lyle also unveiled plans for a £215 million share buyback program. The stock has since been fighting back from the initial wave of selling pressure, now finding itself just under 3% in the red.

In other London listed news, NatWest Group (NWG) is set to significantly expand its retail operations with the acquisition of the majority of Sainsbury's Bank from J Sainsbury (SBRY). The deal is notable, encompassing credit cards, personal loans, and savings accounts. As part of this transaction, Sainsbury's will pay NatWest Group a sum of £125 million.

Central Banks Retain The Ability To Surprise

Whilst the consensus is that the BoE will keep rates on hold for now, despite hitting CPI inflation targets in the last print, central banks have been known to surprise from time to time.

Most recently, the Swiss National Bank (SNB) delivered an unexpected cut to its interest rate, trimming it down to 1.25% from 1.5%. This defied market expectations, which had largely anticipated the central bank to hold steady or even increase rates and the possibility of a further raise on the horizon has also been raised. The SNB also provided its economic forecasts, projecting Swiss growth at around 1% for 2024, with inflation expected to settle at 1.3%.

As the day continues, we can expect the outcome of the Bank of England's interest rate decision to have the most significant implications for the market, particularly if there are any surprises.