The FTSE 100 struggles for direction before Fed decision

Although it started Tuesday in the green, the FTSE 100 was down 0.61% at the end of the session, due to the 100bps rate hike from the Swedish Riksbank. The blue-chip index was struggling for direction this morning, ahead of the Fed meeting due later today. Investors are wondering if the Fed will raise rates by 75 bps, or even by 100 bps, as in Sweden.

Banks and consumer staples were at the bottom, while oil majors performed best, tracking higher oil prices.

Investors also expect the Bank of England to raise rates aggressively on Thursday, with a majority forecasting a 75-bps hike.

In other news, the UK budget deficit came in higher-than-expected in August, despite an increase in tax revenue, due to high inflation, data from the Office for National Statistics shows.

Public sector net borrowing - excluding public sector banks – reached GBP 11.8 billion, vs GBP 6.0 billion forecast by the Office for Budget Responsibility. The consensus of economists expected GBP 8.45 billion.

 

Things to read today:

The economic consequences of Liz Truss (Financial Times)

Fed Day Is Here. A Rate Hike Is Just Part of the Equation (Barron's)

UK Unveils £40 Billion Winter Energy Bill Bailout for Businesses (Bloomberg)