A rate rise in London and a rout in New York

Threadneedle Street moves

The Bank of England raised interest rates to 4 per cent on Thursday. It was the first increase for more than three years, according to the Guardian and the BBC, and City A.M. reported that the vote was unanimous. CNBC described it as the Bank's first rise since the Iran war.

The forecasts attached to the decision carried most of the weight. CNBC reported a warning from the Bank that inflation would near 5 per cent, while City A.M. said simply that inflation was set to spike. By late evening This is Money had gone further, reporting that the Bank had opened the door to a second rise before Christmas, with inflation threatening to top 6 per cent.

Commentary turned at once to the path ahead. City A.M. argued that the united vote itself signalled more to come. Sky News framed the matter as a question of how many more rises would follow. The BBC's Faisal Islam asked how high rates will go, and This is Money gathered economists on whether Thursday's move was the first of many and whether the Bank could keep inflation in check.

Coverage aimed at households was more direct. City A.M. reported mortgage holders bracing for a 'painful rise'. The Guardian and the BBC each set out what the change means for homeowners and savers, the BBC listing three ways it could affect people. A Guardian comment piece said a rate rise in the midst of a cost of living crisis would leave many incredulous.

A $2.5 trillion afternoon on Wall Street

In New York the Nasdaq fell 5.5 per cent on Thursday, according to the Wall Street Journal. The Guardian called it the index's worst day in 18 months.

The explanation offered was political. After the Democrats' success in the midterm elections, investors retreated from the artificial intelligence trade, with the Guardian describing bets on an AI slowdown. The Journal put the cost of what it called a historic rout of technology stocks at $2.5 trillion. City A.M. named SpaceX and Nvidia among the companies rattled, under a headline quoting the phrase 'the blood is in the streets'. This is Money reported that Elon Musk had lost billions, and that the tech wreck had fuelled fears of a stock market crash.

By the early hours of Friday the selling had reached the funds. The Journal reported hedge funds dumping positions and cutting staff as the selloff deepened, and ran a separate piece arguing that the US market would likely struggle to regain its October peak. The same paper described Elizabeth Warren's power in the new Senate as a Wall Street nightmare.

Bonds and bullion were calmer. The South China Morning Post reported that the US borrowing outlook had steadied after the midterms, though analysts said Treasury yields faced new tests. Gold settled higher on Thursday as yields and the US dollar weakened, the Journal reported.

Further afield

In Germany, Rheinmetall shares fell more than 17 per cent on Thursday after a profit warning. Euronews attributed the warning to delays in orders.

Hong Kong's numbers arrived on Friday morning. The South China Morning Post reported that earnings at the Exchange Fund had tumbled 74 per cent, and that the Hong Kong Monetary Authority warned of more market turbulence to come. HKEX, the city's exchange operator, posted its first quarterly profit decline in over two years as the local market cooled. A separate survey found Hong Kong property investors bucking a wider shift in Asia-Pacific buying.

In private markets, the Journal reported that major investors were sceptical an Anthropic flotation could achieve a $1.5 trillion valuation. The doubts arrived a day after the Nasdaq's 5.5 per cent fall.

Property drew a cluster of pieces on both sides of the Atlantic. The Journal asked why investors were searching for hope in housebuilders, and set a house against the stock market as an investment over time. It also profiled a fund trading in the resale market for Hermès Birkin bags. In London, the boss of Foxtons warned that a new first-time buyer scheme risked further house price inflation. On a day of rising rates and falling share prices, bricks and handbags made for an unusual pairing of alternatives under discussion.