Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
World stock markets are in retreat this morning, after America’s central bank dropped a clear hint that interest rates will rise steadily this year.
In the minutes of its last meeting, released last night, the Federal Reserve revealed that several policymakers are more optimistic about the US economy, and have raised their growth forecasts.
This suggests they are likely to hike borrowing costs four times this year – more than many in the markets had expected.
As the Fed put it:
This send shares sliding on Wall Street, where the Dow lost its earlier gains to finish 166 points lower.
Bonds have also been hurt by the prospect of tighter monetary policy, as volatility ripped through the markets again.
Hussein Sayed, chief market strategist at FXTM, explains:
Volatility soared in equity and fixed income markets in the final hours of yesterday’s U.S. trading session. After dropping to 17, the Cboe Volatility Index gained 19%, ending the day above 20. The S&P 500 reversed a gain of 1% to end the day 0.55% lower.
Similarly, the Dow Jones gave up 470 points from peak-to-trough, while U.S. Treasury yields spiked across the curve, and 10-year yields breached 2.95% for the first time in four years.
Over in Asia, most markets are in the red too, and we’re expecting losses in Europe when trading begins.
#FTSE100 Index called to open -75pts at 7205 pic.twitter.com/Mt5wNbgBws
February 22, 2018
The falls come as the City prepares for the second estimate of UK growth in the final three months of 2017.
This will give more detail about how Britain’s economy performed during the quarter; it’ll probably confirm that growth rose to 0.5%.
In the City, Barclays Bank, energy firm Centrica and defence group BAE Systems are reporting results:
Centrica, owner of @BritishGas unveils 17% drop in profits as loses 1.4m customers,to cut 4000 jobs as eyes drastic savings
#Barclays #BarclaysResults pic.twitter.com/VlhVTjMaeY
February 22, 2018
BAE Systems underlying profits beats expectations, dividend a touch light, pension deficit reduced, improving outlook for defence budgets in several markets.
And in parliament, MPs will be grilling KPMG over its role auditing failed outsourcing group Carillion.
9.15am GMT: Business, Energy and Industrial Strategy Committee and Work and Pensions Committee hold Carillion hearing
9.30am GMT: Second estimate of UK GDP for the fourth-quarter of 2017
11am GMT: CBI’s survey of UK retail sales
12.30pm GMT: European Central Bank publishes minutes of its January meeting
1.30pm GMT: US weekly jobless figures