Three central banks, three answers

Hold, with a warning attached

The Bank of England left Bank Rate at 3.75% on Thursday, and paired the decision with a change to the way it sells down its gilt holdings. City A.M. reported the hold alongside what it called an overhaul of the bond sale programme. This is Money framed the same decision as a hold accompanied by a warning that borrowing costs may need to rise in the coming months, with inflation the stated concern.

The BBC's account put the conditionality plainly: rates held, but a rise signalled if energy prices stay high. This is Money's later piece said Andrew Bailey hinted at a November move as inflation pressures build, and described the Bank as going it alone in holding while others tightened. Ahead of the meeting, the same title reported investors betting on four hikes by the end of 2027.

The gilt element drew as much attention as the rate. City A.M. said borrowing costs fell after the Bank surprised markets with the bond sale change, and the Guardian ran an explainer on why the shake-up in gilt sales matters for the Treasury and the public finances. Equities took it well: City A.M.'s live blog, which had opened expecting stocks to fall as markets braced for the call, recorded the FTSE 100 soaring after the hold.

Alex Brummer, writing in This is Money, asked why the Bank would delay if a rise in Bank Rate is going to be necessary this year anyway. In a separate column a day earlier he had argued the Fed was pointing the way and that the UK needed to follow before the cost of living ran out of control.

Washington raised, Tokyo raised

The Federal Reserve raised US interest rates for the first time in three years, as the BBC reported. Kevin Warsh's remark that inflation is still "too high" was followed by a sell-off in US markets on Tuesday, according to the Wall Street Journal. Trump demanded that rates be lowered "fast", Sky News reported, and City A.M. recorded the rebuke the Fed earned from the president. The BBC examined why his hand-picked chair defied him, and ran a separate piece on what higher rates mean for American consumers.

The selling did not last. By Thursday's close the WSJ reported the S&P 500 and Nasdaq posting their biggest gains in six weeks, with stocks shaking off the hike and markets retracing their post-Fed moves. The paper attributed the turn to investors coming back to AI stocks and to hopes that rising inflation and oil prices are now contained.

Asia moved in the other direction first. The South China Morning Post reported Hong Kong stocks declining after the Fed's increase and its signal of more to come.

Overnight, the Bank of Japan raised its benchmark rate to 1.25%, the highest level since 1995 — a 31-year high, in the BBC's description, taken to curb rising prices. The WSJ's angle was on the consequence for capital flows: a higher domestic rate makes the United States less alluring for Tokyo investors.

Shoppers, listings and Thames Water

Next supplied the day's clearest read on how rate talk lands in the shops. The retailer told This is Money that fears of interest rate hikes are putting Britons off spending on the high street. The Guardian, reporting the same set of results, said Next had forecast bigger profits after hot weather lifted sales.

Two companies looked at the London market. Revolut is weighing a dual listing in New York and London, according to This is Money, which noted that the digital bank had previously mocked the UK stock market. Vue is eyeing a London listing valuing it at about £1.5bn, declaring that "cinema is back" after what it called six years of hell.

MPs have urged ministers to break off Thames Water talks with US hedge funds, the Guardian reported, pressing instead for the special administration regime.

Elsewhere: Sky News said a Microsoft fund has backed Mantic, a British AI predictions start-up. The WSJ's bankruptcy briefing carried a takeover bid for A-CAP insurers over risky private credit exposure, and its personal finance desk set out the new rules for selling a home with US mortgage rates near 7%. On this side of the Atlantic, the BBC published its own guide to what is happening to UK rates and what it means for mortgages.