Finance, in brief

The Bank of England raised its main rate from 3.75% to 4% on Thursday. [1] It is the first rise since August 2023. [2]

The Bank is Britain's central bank, and its committee sets this rate, Bank Rate, to meet the inflation target. [1]

Its 9-member committee voted 8-1. [1] Catherine Mann wanted a bigger rise, to 4.25%. [1]

Inflation, the yearly rise in prices, reached 3.5% in September, against a 2% target. [1]

The Bank now expects about 5% by the middle of next year. [1]

Market rates have already fed through to rates faced by some households and firms, the Bank says. [1]

Benchmark 2-year mortgage rates had risen nearly 0.5 of a point since early September, before today's move. [1]

Economists call the worry second-round effects: energy costs feeding into wider pay and price rises. [1]

Firms are cutting costs and taking thinner profits, and little has spread to other prices yet. [1] Bailey says those moves can only be temporary. [1]

Your rent rises, so you ask for more pay. Your boss then raises prices, and others ask too.

Bank staff based the forecast on energy prices to 27 October, with Brent averaging $108. [1]

Brent has since fallen to about $95, so the 5% rests on prices that have already moved. [4]

Bailey said the forecasts had oil at $95 only by May 2027. [3] He said the decision would still have been the same. [3]

The Bank's next decision is due on 17 December. [1]

Nothing has been signed, and the Bank of England's own 5% inflation forecast uses oil prices from before the fall. [1]

Whether the Bank of England raises again in December.

Bailey says he can see the argument, but that depends on news that has not yet arrived, including on energy prices. [1]

Whether higher pay follows dearer energy in Britain.

The Bank says there is limited evidence so far, and that such effects usually show up later. [1]

Brent, the world's benchmark oil price, fell more than 8% on Wednesday, touching $93.91. [5][19]

It slipped to $93.65 early on Thursday in Asia. [5] By mid-morning in India it was back at $95.19. [4]

In midday New York trading it rose 2.6% to $97.11, AP reported. [59]

Both main oil prices settled on Wednesday at their lowest since 31 August. [5]

An analyst called a post by US Vice President JD Vance a key catalyst. [20] He wrote: "The reason we lost is the war." [19]

Traders read that as pressure on President Trump to end the war with Iran. [20] It has disrupted energy supplies for 8 months. [19]

JPMorgan, a big US bank, estimates oil supply beat demand by 1.4 million barrels a day last month. [21] Latin America pumps about 1.5 million more a day than last year. [21]

Middle Eastern exports have returned to prewar levels, Semafor reports. [21]

Jet fuel is a big cost for airlines, so IndiGo, an Indian carrier, rose over 7% on cheaper oil. [5]

Traders call this a risk premium: the extra in a price against something feared, here a bigger war. [19]

Oil gained more than 10% in October on fears of a bigger war. [19] Trump then said he had no immediate plans to strike. [19]

Umbrellas cost more when a storm is forecast. The price drops when the forecast clears, though no rain fell.

No deal exists yet. [19] A trader at CIBC, a Canadian bank, said the fall "could be getting a bit overdone". [19]

Whether the US and Iran actually reach a deal.

Oil fell on signals and a post by the US Vice President, and a trader at CIBC says the fall may be overdone. [19] Bailey said the past 2 days have not been backed by firm evidence of a peace process. [3]

Brent oil fell more than 8% on Wednesday, to its lowest close since 31 August.

On Wednesday Microsoft and Amazon each rose more than 6%, while CoreWeave, which rents out AI computers, fell around 10%. [11]

Modine, which cools data centres, and Sterling Infrastructure, which prepares their sites, each fell about 21%. [10]

Chip makers Micron and Nvidia fell 7% and 3.17%. [11]

Voters in Ohio and other states had backed limits on data centres on Tuesday. [10]

Goldman Sachs warned the results could put limits on roughly 45% of planned US data-centre growth. [22]

Nomura, a Japanese bank, says much of the capacity due in 2027 is already being built. [11] The harder hit comes from 2028. [11]

The big cloud firms own working data centres. [22] The smaller ones are spending billions to catch up. [22]

Economists call this a barrier to entry: limits on new sites would hold back rivals of Amazon, Google and Microsoft. [22]

JPMorgan's James Sullivan says tighter supply makes existing capacity more valuable. [11] Debt-funded firms like CoreWeave also pay far more to borrow. [11]

When a town stops new cafes opening, the cafes already on the high street can charge a bit more.

Any new US law limiting AI would still need President Trump's signature, Mint reports. [4]

Limits on new sites could make their working data centres worth more and hold back smaller rivals. [22] They still fell 2% to 4% on Thursday. [57]

How much of planned US data-centre building will actually stop.

Goldman Sachs says up to about 45% could face limits, and Nomura says the harder hit comes from 2028; neither is a count of cancelled projects. [22][11]

The Dow Jones index of 30 big US firms jumped 3% on Wednesday, its best day in 18 months. [23] The S&P 500 rose 1.6% and the Nasdaq 1.4%. [23]

In points, the Dow rose more than 1,500. [24]

Investors bet a divided US government would limit big policy changes, after Democrats won both houses of Congress. [23]

Early on Thursday the Dow was still rising, up 334 points just after the open. [24] It closed down 1,833.06 points, more than Wednesday's gain. [24]

South Korea's Kospi index closed down 5.28% on Thursday. [58] Japan's broad Topix closed up 1.16%. [24]

On Wednesday AI shares came under pressure while economically sensitive ones rose, CNBC says. [24]

Investors call this rotation: selling one kind of share and buying another, as they did with AI names. [24]

CNBC says investors were moving away from technology shares. [24] On Wednesday that lifted the Dow more than the tech-heavy Nasdaq. [23]

When a school canteen stops selling chips, the sandwich queue grows, though no more children came in.

One economist, Steven Blitz, warned: "Democrats control Congress for the next two years, but not Trump." [23]

The US ten-year government rate was around 4.865% early on Thursday, about 3 basis points lower. [25] A basis point is 1/100th of 1%. [25]

It had already ended Wednesday 6 basis points lower. [25]

The dollar index, against a basket of currencies, fell 0.36% on Wednesday. [26] It slipped 0.06% more to 101.41 on Thursday. [26]

ADP, a US payroll company, says private firms added 86,000 jobs in October, above the 69,000 forecast. [26]

The US government's own jobs report comes on Friday. [25]

High government borrowing rates have been weighing on the US economy, CNBC says. [27]

Bond traders call the rate a yield, and yields and prices move in opposite directions. [25]

Surging oil had pushed yields up on inflation fears. [25] A currency strategist traces this bond rally to lower odds of new strikes on Iran. [26]

If everyone wants a fixed-prize raffle ticket, its price rises, and the winnings per penny you paid shrink.

The big moves in oil, bonds and the dollar rest on one bet: that the Democrats' win in the US vote will end the Iran war sooner. [19][26]

Private US firms added 86,000 jobs in October, more than the 69,000 forecast.

The US Treasury can borrow up to $41.1 trillion, a limit Congress set in 2025. [27]

Its deficit, the gap between spending and tax, is $1.99 trillion this year. [27]

The Bipartisan Policy Center, which tracks this, says the US Treasury will likely hit the limit by midsummer. [27]

Accounting moves could stretch the last safe day to the fourth quarter of 2027, Wall Street estimates say. [27]

CNBC's analysis says this time Democrats hold the leverage, and would ask for more spending, not less. [27]

In past fights Republicans demanded cuts from a Democratic president; this one reverses it. [27]

A missed US payment would put trillions in government bonds in doubt, and those bonds underpin the world's finance. [27]

Political scientists call this brinkmanship: pushing a must-pass bill to the edge to win something else. [27]

The US cannot borrow what Congress has ordered it to spend once the limit is reached. [27] So Democrats can demand concessions for their votes. [27]

A flatmate who must sign the lease renewal can ask for the bigger room before signing.

Democrats' win gives them the US Senate, which approves anyone joining the Federal Reserve, the US central bank. [28]

US Federal Reserve chair Kevin Warsh was confirmed in May by 54 to 45. [28] Only one Democratic senator backed him. [28]

Elizabeth Warren, a harsh critic of Warsh, will likely chair the US Senate committee that questions him. [28]

A White House panel moved its hearing on US central bank governor Lisa Cook from Thursday to 14 December. [29]

President Trump tried to fire Cook in August 2025; the US Supreme Court barred it in June, for now. [29]

Traders see an 81.2% chance of a US rate rise in December, up from 77.4% a day earlier. [26]

President Trump has tried to meddle with the US central bank. [28] So who the US Senate approves shapes who sets rates. [28]

Economists call this central bank independence: rate-setters a president cannot simply replace. [29][28]

Picks for the central bank need the US Senate's approval. [28] With Democrats in charge, that guards against more Trump allies there. [28]

Fans trust a referee more when one team cannot swap him for a friend before the match.

Cook's lawyer has questioned the panel's fairness, and it is unclear if she will attend. [29]

China has told SoftBank, a Japanese investor, it cannot buy the robot unit of ABB for $5.4 billion. [12] ABB is a Swiss-Swedish firm. [30]

ABB confirmed on Thursday that SoftBank told it Chinese regulators had blocked the deal in China. [30]

China is ABB's biggest robot market, about 30% of that business. [12]

China's National Development and Reform Commission feared robot data would go abroad to train AI, the FT reported. [12] SoftBank is a major OpenAI investor. [12]

SoftBank's shares fell 5.1% to 4,053 yen on Thursday. [31]

Arm, the chip designer about 90% owned by SoftBank, fell about 5% too after its forecast disappointed. [31]

The deal was agreed in October last year, and SoftBank expected approval until last week. [12]

A deal between a Japanese and a Swiss-Swedish firm can still need China's approval, because it sells there. [12][30]

Lawyers call this foreign investment screening: a state checking who gains control of a technology, as China's planner did here. [12]

The reported fear was robot data going abroad. [12] Because about 30% of the business is in China, China had a say. [12]

A school may stop an old laptop being sold to outsiders if it still holds pupils' records.

ABB says the two firms are still working on the sale, and neither has said what happens next. [30]

What happens to ABB's robot sale now.

ABB says it is working with SoftBank on the deal, and neither has said what comes next. [30]

Toyota's shares rose as much as 15% on Thursday after it raised its yearly profit forecast. [13]

It now expects operating profit of 3.9 trillion yen, up 15% from its forecast of 3.4 trillion. [32]

Its quarterly operating profit, 1.13 trillion yen, beat the 992 billion analysts forecast. [33]

That is its first rise in 6 quarters. [33] A weak yen and demand for hybrids, which mix petrol and electric power, helped. [33]

Net profit, the amount after everything, still fell 19% to 759.4 billion yen. [13]

Sales in China and the Middle East slid. [33]

Toyota's annual vehicle sales forecast went down, from 11.18 million to 10.99 million. [13]

The shares had already gained around 8% before the results. [33]

Toyota, a Japanese firm, is the world's top-selling carmaker. [13]

Revenue rose 8.6% despite lower vehicle sales, so the top-selling carmaker earned more on fewer cars. [13]

Accountants call this a translation gain: profit earned abroad is worth more in a weaker home currency. [13]

The yen fell about 28% against the dollar over 5 years. [13] So each dollar Toyota earns turns into more yen. [13]

If your pocket money comes in a foreign coin that gains value, you can buy more without earning more.

Net profit of 759.4 billion yen missed the 779.6 billion analysts forecast, and the shares rose anyway. [13]

Why markets move on the surprise, not on the news

Traders bet on what they expect: money markets gave the Bank's 4% a 99.96% chance

Those bets move prices early: the pound hit its highest since 2016 before the vote

A result that matches the forecast adds nothing new to trade on: after the 4%, the pound sat flat

Only the gap moves prices: Toyota beat a 992 billion yen forecast, and its shares jumped

A rate rise can be big news and still tell traders almost nothing, because they had already bought and sold on it.

The rise to 4% was almost certain. The vote had room to surprise, because economists polled by Reuters expected 7-2 and it came in 8-1.

Its profit of 1.13 trillion yen beat a 992 billion forecast, and the shares rose after results on top of an 8% gain before them.

Sales rose 32% in the quarter, but the shares fell over 17%, because the forecast they were priced on came down.

It beat forecasts and fell 7%, because its shares are priced on fast growth, and growth is slowing to about 33%.

A forecast of up to 2% growth is a small number, and the shares jumped because traders had priced flat or falling sales.

The published forecast is not always what traders really expect. A firm can beat it and still disappoint them, and nobody sees their true figure until the price moves.

A saver with a pension, a person who wants a loan and a trader all live inside these prices. The trader only sees the gap.

The weak yen turns each dollar earned abroad into more yen. [13]

Shares in Rheinmetall, a German arms maker, fell over 17% in early trading on Thursday. [14]

It now expects 2026 sales of around 13.2 billion euros, down from a range of 13.7 billion to 14.2 billion. [14]

The German army's order for Boxer armoured vehicles slipped to next year. [14] Artillery shells had setbacks in acceptance tests. [14]

It is the second forecast cut since August. [14] Germany then scrapped warships that would have been its biggest order since World War II. [14]

Its third-quarter sales actually rose 32% to 3.15 billion euros. [14]

Orders waiting to be filled reached 78 billion euros. [14]

The shares are down about 46% this year, after gaining an average of 119% a year for 4 years. [14]

Spending by European governments drove that boom, so their delays now hit the forecast. [14]

Accountants call this revenue recognition: an order counts as sales only when delivered, so delays cut the forecast. [14]

Rheinmetall holds 78 billion euros of orders. [14] Vehicles and shells that slip past 2026 cannot be counted as this year's sales. [14]

A paper round pays you for papers delivered, not for the list of houses you have promised to reach.

RBC, a Canadian bank, warned the news could feed doubts about traditional defence technology against newer rivals. [14]

Sales rose 32% in the quarter, but the shares fell over 17%, because the forecast they were priced on came down.

Shares in CVS Health, the largest US healthcare group, fell about 12% on Wednesday after it announced a split. [16][34]

By the first half of 2028, its roughly 9,000 shops split from insurer Aetna and Caremark, a drug-benefit manager. [16]

The group was valued at $117bn, with over $400bn in revenue last year. [34]

Arkansas and Tennessee have passed laws to stop one firm both managing drug benefits and running pharmacies. [34]

CVS weighed a split in 2024 and walked away, when the shops looked too weak to stand alone. [16]

CVS, UnitedHealth and Cigna control roughly 80% of the market, the Guardian reports, so lawmakers are watching. [34]

Corporate finance calls this a conglomerate discount: a sprawling group can be valued below its separate units. [16]

The split could let investors value each unit alone, not one sprawling group, CNBC says. [16]

A shop selling both toys and tyres is hard to value. Split in two, each part is easier.

Novo Nordisk's US-traded shares rose nearly 5% on Wednesday, their biggest gain since June. [35]

Novo is the Danish maker of Wegovy, a weight-loss drug. [35] It now expects sales growth of -2% to 2%, up from -6% to 0%. [36]

It earned 5.79 kroner a share, against the 5.10 Wall Street expected. [37]

Sales of the Wegovy pill beat Wall Street's estimates by roughly 17%. [35]

Novo estimates the pill takes about 80% of new prescriptions for weight-loss pills. [35]

Its cash left after spending is now forecast at 60 to 70 billion kroner, up from 45 to 55 billion. [36]

Its old outlook was flat to falling sales, so even small growth was a change for investors. [35]

Investors call Novo's quarter a beat-and-raise: a result above forecast and a higher forecast for what comes next. [35]

The top of Novo's sales forecast rose to 2%, from flat to falling before. [35] Its shares then had their biggest gain since June. [35]

A pupil expected to fail who gets a middling mark is praised more than one expected to do well.

Novo itself names lower prices and lost exclusive rights in some markets as pressures ahead. [36]

A forecast of up to 2% growth is a small number, and the shares jumped because traders had priced flat or falling sales.

Figma, which makes design software, fell 7% in late trading on Wednesday after results above forecasts. [15]

Its quarterly sales were $391.4 million, against $375.8 million expected. [15]

It earned 10 cents a share, double the 5 cents expected. [15]

It raised its full-year sales forecast. [15] It sees growth of about 33% next quarter, above the 28% analysts predicted. [15]

Figma's sales grew about 43% in the quarter, so 33% is a slowdown. [15] Its finance chief called this a trade of short-term sales for long-term gain. [15]

The shares had already fallen about 41% this year, on fears AI could compete with it. [15]