Stocks are tanking after the US Federal Reserve raised US interest rates last night, and predicted two more hikes in 2019
- Latest: FTSE 100 hits lowest since September 2016
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- As it happened: Fed hikes, Dow tanks
Back in the markets, the FTSE 100 is struggling back from its early-morning slide.
After two hours of trading, the blue-chip index is down 50 points at 6715, a drop of 0.7%.
We’ve seen plenty of evidence that the global economy is slowing and financial conditions are tightening, while bond markets have been starting to warn that winter is coming for some time now, in the form of a possible recession, so last nights Fed rate decision would have been the perfect opportunity for US central bankers to reassure investors that they recognised these risks, with a nod to the darkening skies.
The decision to raise rates was not a surprise, however the guidance was, in that it wasn’t dovish enough. Fed chairman Jay Powell did recognise some of these concerns by saying that growth and inflation were likely to be weaker, yet his overall tone came across as steady as she goes, as the US central bank continued to act as if the sun was shining, slapping on the sun screen, instead of investing in some form of storm insurance, as dark rain clouds start to loom larger.
Newsflash: Online shopping has hit a new peak in the UK.
The latest retail sales figures just released, show that online sales made up 21.5% of all retail spending in November. This is the first time that web shopping has exceeded 20%.
Retailers reported strong growth on the month due to Black Friday promotions in November, which continues the shifting pattern in consumer spending to sales occurring earlier in the year; the non-seasonally adjusted growth rate in November 2018 was 13.2% in comparison with 8.7% in November 2013.
UK retail sales +1.4% in November, well above forecasts and the highest increase since May.
But retail sales in 3 months to November, which smooths out some monthly volatility, rose just 0.4%, the smallest increase since April.