Threadneedle Street prepares to move, as Wall Street digests the midterms

All eyes on Threadneedle Street

The Bank of England announces its interest rate decision today, and the morning's coverage expects an increase. The BBC described it as the first rise in more than three years. City A.M. framed the morning as a search for signals. The vote itself appears settled in the City's mind. Attention has moved to what the Bank says about what follows.

The case for a move was laid out over the preceding day. The Guardian reported that activity in the services sector had accelerated, and tied the expected increase to that data. City A.M. reported that businesses were adding jobs, and carried a forecast of "further interest rate hikes" beyond this one. The phrase sat in quotation marks in its headline.

For borrowers the coverage was less abstract. This is Money wrote that households face a fresh squeeze. The BBC ran an explainer on what is happening to rates and what it means for mortgages. Other cost pressures filled the same pages. The BBC reported that swim and gym prices are set to rise above inflation. This is Money reported that the cost of employing young people has risen at three times the rate of inflation under Labour, a trend the paper linked to a slump in jobs. City A.M., in a lighter vein, argued that Britain's appetite for Halloween and The Traitors amounts to a recession indicator.

Money has been leaving British shares. City A.M. reported investors turning away from equity funds, with the UK continuing to suffer outflows.

The market itself was expected to open firmly. City A.M.'s live blog had London stocks set to jump ahead of the decision, with oil at a two-month low.

Washington's verdict, Wall Street's response

The American midterm elections went to the Democrats. Sky News described a sweep; the Guardian wrote of victories. Markets took the result calmly at first, with Sky reporting Wall Street edging higher after the results.

The tone then firmed. The Wall Street Journal's live coverage for 4 November was headlined with the Dow's best day in 18 months, alongside a slide in oil. The Guardian reported US stocks rising while the dollar slid as investors digested the outcome. In the bond market Treasury yields fell. Gold rose on the back of that, according to the Journal, which later described the metal as flat after its midterm-linked rebound.

Not every voice joined in. Maggie Pagano, writing in This is Money, argued that bear market alarm bells are ringing on Wall Street and that it is time to listen. The Journal had reported the previous evening that Apple shares slipped and that Meta's debt costs rose. From Hong Kong, the chief executive of Julius Baer told the South China Morning Post that Asia would drive the bank's growth, as investors diversify amid risks attached to American artificial intelligence.

The Journal also ran a column on passive investing, under the headline that index funds are better when they are lucky and smart.

Europe and Asia: inflation, property and friction

The Bank of England is not alone in facing higher prices. CNBC reported euro zone inflation at 4% for the first time in three years, with an interest rate increase looming. Higher borrowing costs were anticipated in Hong Kong too. The South China Morning Post reported that private home sales dropped as buyers adopted a wait-and-see stance, with rates tipped to rise.

Mainland shares moved the other way. Chinese stocks extended a rebound on state support and on the American election results, the SCMP reported. The same paper had noted a day earlier that ordinary investors were staying on the sidelines even as state intervention gathered pace. It also reported that Chinese firms' third-quarter dividend growth lagged the global average amid a market slump. Oversight tightened at the listing stage, with the China Securities Regulatory Commission requesting further tax records from Hong Kong IPO applicants. Hong Kong wealth managers, meanwhile, want broader access to mainland China's Nasdaq-style markets.

Corporate news carried friction. BMW reported lower third-quarter earnings, which DW attributed to mounting woes in China. Euronews added that the carmaker warned of a possible 2026 loss in its car division. Wingtech rejected a restructuring of Nexperia, citing "discrimination" towards Chinese investors.

At home, the culture secretary, Lisa Nandy, has intervened in Sky's £1.6bn takeover of ITV. This is Money reported that the move could see the deal blocked.