The Market Close- UK raises interest rate for the second time in a decade to 0.75%

Today's Closing Update

U.S. Stocks fell in early trading as heightened trade tensions between the U.S. and China returned to the spotlight, overshadowing a batch of corporate results that largely beat expectations.

European Stocks skidded south as trade tensions between the U.S. and China appeared to be experiencing fresh escalation, with Germany’s main benchmark dragged lower by concerns about the impact of tariff action. Disappointing earnings updates from Siemens AG and BMW AG added to the downbeat mood, and the Bank of England lifted U.K. borrowing costs, as expected.

The Bank of England has raised the interest rate for only the second time in a decade. The rate has risen by a quarter of a percentage point, from 0.5% to 0.75% – the highest level since March 2009. The move will increase the interest costs of more than three-and-a-half million residential mortgages that have variable or tracker rates. But it will be welcomed by savers, who could see a lift in their interest rates over the coming months.

BMW reported a smaller-than-expected 6% decline in second-quarter operating profit while brushing off concerns about new anti-pollution rules and global trade tensions which caused rival Daimler to warn on profits. The German carmaker said higher spending to develop electric and autonomous cars and currency headwinds weighed on earnings before interest and taxes (EBIT), which fell to €2.74bn (£2.5bn) but topped the 2.69 billion expected by analysts.

Cisco Systems Inc said it would buy Duo Security, a venture capital-backed cybersecurity company, for $2.35bn (£1.79bn) in cash, as it seeks to expand its offerings in cloud computing. The deal is the biggest acquisition for Cisco since its $3.7bn purchase of business performance monitoring software company AppDynamics last year, and its largest in the cybersecurity sector since its $2.7bn takeover of Sourcefire in 2013.

Barclays will increase its standard variable UK mortgage rate by 0.25% from September after the Bank of England raised interest rates by the same amount, a spokeswoman said on today. That will take interest rates on the bank’s standard variable rate mortgages to 5.24%. Rates on Barclays’ buy-to-let standard variable rate mortgages will also increase by 0.25%, to 5.74%, the spokeswoman said.

Siemens launched its biggest strategy overhaul in four years, aimed at making it more nimble and profitable in the digital industrial age beyond the reign of current Chief Executive Joe Kaeser. Siemens reported industrial profit slightly ahead of expectations in the three months to the end of June, helped by another strong performance by its Digital Factory industrial automation unit that compensated for a slump in power and gas.

Oil Prices fell for a third day, nearing their lowest in two weeks following a surprise increase in U.S. crude inventories that added to existing concern about the rapid rise in global crude supply.

Gold Prices continued to hover just above their recent 12-month lows as the labor market maintains its momentum.

Market Close

UK 100	7,575.9	-77.0	-1.0%
UK 250	20,565.6	-235.9	-1.1%
GER 30	12,546.3	-190.7	-1.5%
FRA 40	5,461.0	-37.4	-0.7%
US 30	25,248.44	-85.38	-0.3%
US 500	2,816.01	+2.65	+0.1%
OIL (BRENT)	73.38	+0.99	+1.4%
GOLD	1,213.61	-2.35	-0.2%

UK Risers & Fallers

Rolls Royce	1058	+70.2	+7.1%
Sage Group	646.8	+21.4	+3.4%
Nostrum Oil & Gas	208.25	+8	+4.0%
Prudential	1730.5	-54.5	-3.1%
Antofagasta	950.8	-29.6	-3.0%
Kaz Minerals	589.1	-232	-28.3%

Reported Economic Data

9.30am: UK Construction PMI	53.1	52.8	55.8
12.00pm: U.K. BOE Inflation Report	–	–	–
12.00pm: U.K. MPC Official Bank Vote	3-0-6	7-0-2	9-0-0
12.00pm: U.K. Monetary Policy Summary	–	–	–
12.00pm: U.K. Official Bank Rate	0.50%	0.75%	0.75%
12.30pm: U.K. BOE Governor Carney Speaks	–	–	–