Inflation in the United Kingdom has reached a 10-year high, prompting the Bank of England to raise interest rates as a means of containing rising inflation. It has become the first big bank to raise interest rates to 0.25 % from 0.1 % since the outbreak has started. The nine-member Monetary Policy Committee has voted 8-1 for hiking the Bank Rate. Inflation is currently above 5% and hike in the interest rate is set to make the mortgage cost higher for homeowner.
In light of the novel coronavirus variation Omicron and the uncertainty that looms large owing to its rapid spread, the World Economic Forum has chosen to postpone its 2022 annual gathering in Davos, Switzerland. The World Economic Forum’s annual conference was scheduled to take place in Davos-Klosters, Switzerland, from January 17 to 21, 2022. It has been postponed and will now take place in early summer. Due to the current pandemic situation, holding a global in-person meeting is incredibly challenging. Expert counsel guided the preparations, which benefited from the Swiss government’s strong engagement at all levels. Despite the meeting’s strict health standards, Omicron’s transmissibility and impact on travel and mobility have necessitated a postponement.
Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases and President Joe Biden’s medical advisor, has told on Sunday, speaking at a morning talk shows that he expects coronavirus rates to hit new highs this winter caused by highly contagious Omicron variety. Omicron is spreading swiftly and 50 million Americans are still unvaccinated. This will lead to challenging times ahead as we are moving deeper into the winter. As per Fauci, new variant is “exceptional” and faster than the Delta variant as it doubles the number of infections in two or three days.
In the Indian markets on Monday, at one point of time Sensex has plunged over 1700 points and Nifty ended below 16700 points. Union health minister Mansukh Mandaviya has told the Rajya Sabha on Monday that more than half of the country’s population has been completely vaccinated against Covid-19. In comparison to other countries with smaller populations, Mandaviya noted that immunisation of 130 crore people in the country was a major problem. Despite this, 88 percent of the first dose and 58 percent of the second dose has been administered in India.
12 cases of death have been reported related to the Omicron variant in the United Kingdom. Officials and ministers in the United Kingdom have warned that the entire impact of the latest round of COVID-19 cases will not be known for some time.
Fed has announced faster wind down of its Bond Purchase program. As the economy approaches full employment and the Federal Reserve is dealing with an increasing inflation, the Federal Reserve announced on Wednesday that it pandemic-era bond purchases will end in March and Fed will subsequently increase the interest rate as the unemployment numbers are under control and inflation is hiking.
Earlier the European Central Bank (ECB) governing council has also announced to end Pandemic Emergency Purchasing Program (PEPP) and manage transition by scaling up Asset Purchase Program (APP) from €20 billion to €40 billion. The actions of Global Central Bankers, worry of Inflation, and massive spread of Omicron are signaling worry for the markets. After deep corrections, Indian markets are getting to the level of reasonable valuations. Recovery in the US markets and strengthening of Dollars will also be a cause of concern. Investors need to look at the trade which are fairly priced and intends to benefit from the domestic growth revival.
Bureau Galactik Views