Australian rate cut sends FTSE soaring

Fri, 10th May 2013

The leading share index in the UK rocketed higher in the first session following the Bank Holiday as an unexpected interest rate cut by the Bank of Australia caught everyone by surprise. By the close of trade, the FTSE 100 was higher by 0.55 per cent, reaching 6557.

The slash in interest rates by the Reserve Bank of Australia had been on the cards but no-one had expected it to take effect quite yet. The interest rate now stands at a record 2.75 per cent. The move from the Bank also saw an impact ripple through to Japanese market who boosted by the decision plus a weaker yen saw the markets climb to a five year high.

Back in the UK, the number of new cars being sold reached a five year peak according to the Society of Motor Manufacturers and Traders. The number of new licence plate registrations is higher by 14.8 per cent compared to 12 months ago, rising to 163,357 although the organisation did acknowledge that there had been a greater number of sale days this year. 2013 sales are now also expected to smash previous expected volumes.

In other domestic news, Lloyds TSB reported that more people will be spending than saving this year as pressure on personal finances continues unabated. In a survey carried out for the bank, three out of ten people admitted their savings would suffer as they were forced to spend more to survive in the year ahead.

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