#interest-rates

#interest-rates

The Bank of England's decision to maintain the base interest rate at 4% until 2026 offers UK SMEs a rare opportunity amidst these ongoing economic challenges. This stability is crucial as inflation remains at 3.8%, creating a complex landscape that demands careful navigation by businesses. However, while stable interest rates can provide predictable borrowing costs - enabling SMEs to plan investments and manage cash flow - persistent inflation means that operational expenses are still rising, putting pressure on profit margins across various sectors.

Interest rate cuts make high-yield dividend stocks more attractive because they reduce competition from fixed-income investments while lowering the companies' borrowing costs, which can support both dividend sustainability and stock price appreciation. At 24/7 Wall St., we attempt to evaluate the underlying business fundamentals and dividend sustainability before recommending companies to our readers. Often, remarkably high yields can sometimes indicate financial stress rather than opportunity, as was the case with Walgreens this year.

It's always a question of a balance of risks. And you know, I have been on the side of saying maybe the balance of risks are more on the inflationary side than the disinflationary side. I think, through time, and also as markets reprice, that probably is changing. And personally, I'm more comfortable now than I was six, nine, 12 months ago,

Whilst gold prices have many drivers, one is the perception that it operates as a haven that investors buy in times of fear. After all, it doesn't pay a dividend or a coupon, and over the very long term, it's struggled to compete with other asset returns. This September, gold prices exceeded their previous inflation-adjusted peak from January 1980. That was a time when the US was heading into recession, driven by a huge monetary tightening by the Fed under Paul Volcker, aiming to get inflation down. So historically, high gold prices haven't exactly been associated with rampant optimism," Allen told clients in a note this morning.

Donald Trump has once again taken a wrecking ball to the rule of law and long-standing norms as he seeks to fire Lisa Cook, the Federal Reserve governor, and pursue his unprecedented assault on the central bank's independence. Just as he failed to understand the huge problems his tariffs would create, Trump fails to understand the serious damage his attacks on the Federal Reserve could cause.

When pressed by reporters on why hiring has slumped, Powell responded: "That's much more about the change in immigration," He continued, "The supply of workers has obviously come way down. There's very little growth, if any, in the supply of workers. And at the same time, demand for workers has also come down quite sharply, and to the point where we see what I've called a curious balance."

European markets opened higher on Wednesday, supported by a rebound in SAP and growing investor optimism ahead of the Federal Reserve's policy decision later in the day. However, the market could remain at risk as investors could remain cautious. SAP led gains in the index, advancing nearly 4% in early trading after upbeat management commentary helped allay recent concerns over its cloud segment.

The European Central Bank left interest rates unchanged Thursday with inflation back under control and the economy weathering Trump's tariff onslaught better than expected. The bank's rate-setting council left its benchmark deposit rate unchanged at 2% at a meeting at its skyscraper headquarters in Frankfurt. The focus in Europe has shifted to the fiscal crisis in France and any possible role for the ECB in containing potential market turmoil that could erupt from the country's out-of-control deficit and political logjam.

As expected, inflation ticked slightly higher during August with rising housing, food and energy costs leading the way. Core inflation however remained stable, ensuring a rate cut in September is now a forgone conclusion. The Federal reserve having been in wait and see mode since December 2024 has been given the green light today to cut rates. Inflation has not seen large upside surprises from tariff turmoil and with recent revisions to jobs data showing almost 1 million fewer jobs than previously thought,

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