2025-08-07 11:44
Aug 7 (Reuters) - The pound rallied and UK stocks and bond prices tumbled on Thursday after the Bank of England cut interest rates as expected, although concern over inflation among its policymakers stirred up unprecedented division. Four of the BoE's nine policymakers voted to keep rates on hold, after the Monetary Policy Committee had to have two rate votes for the first time in its history. Sign up here. The BoE is being pulled in different directions as Britain's job market has weakened in recent months, but inflation is rising. The vote split suggests that more policymakers are prioritising the inflation side of that equation than investors had thought prior to the meeting, something that could cause them to pare back bets on further easing. The pound rose as much as 0.6% to a session high of $1.343, before retreating to $1.3407, up 0.4% on the day. Yields on UK government bonds, or gilts, rose, as traders reassessed how much more the BoE will cut rates this year. The benchmark 10-year yield at one point rose over 6 basis points at 4.597%, and was last at 4.58%. Rate-sensitive two-year yields were up to 3.89%. , "Essentially the committee collectively is more concerned with the pace of disinflation, and that resulted in less willingness to cut rates across members than we had believed," said Philip Shaw, chief economist at Investec. "We are still for now forecasting a 25 bps cut to rates in November, but clearly we could be looking at another very finely balanced decision and the outturn will of course depend on the data between then and now. " London's blue chip FTSE 100 index (.FTSE) , opens new tab extended an earlier loss, and was last down 0.8%, with the mid cap FTSE250 index giving back earlier gains to trade just below flat. (.FTMC) , opens new tab The broad European benchmark was up nearly 1%. (.STOXX) , opens new tab "Going forward, further disagreements should be anticipated as members' positions become increasingly entrenched, reflecting the increasing divergence of key data points," Jeremy Batstone-Carr, a strategist at Raymond James Investment Services, said, calling the rate decision "razor-edged". https://www.reuters.com/world/uk/pound-jumps-uk-bond-prices-fall-after-razor-edge-boe-vote-rates-2025-08-07/
2025-08-07 11:39
LONDON, Aug 7 (Reuters) - The Bank of England (BoE) on Thursday lowered UK interest rates by a quarter point, marking its fifth cut in 12 months, although nearly half of its policymakers voted to keep borrowing costs unchanged, giving the pound a boost. Difficulty reaching an agreement meant the Monetary Policy Committee had to hold two rate votes for the first time in its history. Sign up here. With the MPC split over how to respond to an inflation rate that the BoE forecasts will soon be double its 2% target and a recent worsening of job losses, Governor Andrew Bailey and four colleagues backed lowering the bank rate to 4% from 4.25%. MARKET REACTION: FOREX: The pound was last up 0.4% on the day at $1.3405, having traded around $1.3785 before the decision. The euro fell against sterling to 87.075 pence, down 0.1%. STOCKS: The FTSE 100 (.FTSE) , opens new tab extended losses to trade down 0.7% on the day. FIXED INCOME: Two-year gilt yields were at 3.887%from 3.844% earlier, up 6 basis points from Wednesday's close. COMMENTS: DOMINIC BUNNING, HEAD OF G10 FX STRATEGY, NOMURA, LONDON: "The language in the statement hints at a few hawkish changes. They talk about policy restrictiveness having already been reduced to some extent. We've been long euro-sterling for the last couple of months. It's been a good trade and part of that has been the risk of a dovish BoE relative to a more hawkish ECB. Today's developments probably do put that position into question. It will certainly make us think about our conviction on that one." PHILIP SHAW, CHIEF ECONOMIST, INVESTEC, LONDON: "It's not so much the decision to cut rates by 25 basis points that is the main talking point, it's the extent to which the Committee is divided, that resulted in the first re-vote in the MPC's history." "Essentially the committee collectively is more concerned with the pace of disinflation, and that resulted in less willingness to cut rates across members than we had believed. We are still for now forecasting a 25-bp cut to rates in November, but clearly we could be looking at a another very finely balanced decision and the outturn will of course depend on the data between then and now." GEORGE BROWN, SENIOR ECONOMIST, SCHRODERS, LONDON "Today's rate cut is no surprise, but the path forward is anything but clear." "Jobs, growth and inflation figures all call for different policy prescriptions, as reflected in the unprecedented two rounds of voting needed to reach a majority. Given the uncertainty presented by the conflicting data, the committee is right to stick to its 'gradual and careful' mantra." "Nervousness about the labour market might prompt another cut in November. But this will be difficult to justify unless disinflation is clearly underway. As such, we think there is a decent chance rates will not fall below the current rate of 4% this year." JULIUS BENDIKAS, EUROPEAN HEAD OF ECONOMICS AND DYNAMIC ASSET ALLOCATION, MERCER, LONDON: "The economy remains weak on the back of growing pressure on the government to meet its fiscal rules through a combination of higher taxes and reduced spending, and tariff-related headwinds. The labour market is weak, but inflation and wage growth are elevated. So the Bank faces a dilemma as the former argues for lower interest rates, while the latter doesn’t. Our view is that the Bank will follow today’s cut with further gradual interest rate reductions over the next few quarters." JEREMY BATSTONE-CARR, STRATEGIST, RAYMOND JAMES INVESTMENT SERVICES, FRANCE: "The decision to cut rates again was far from unanimous, passing with a razor-edge 5-4 majority. In couching its accompanying commentary, the Bank sent a strong signal on its perception of the trajectories for economic activity and inflation in coming months - and by extension the interest rate pathway. The key takeaway was the Bank maintaining its long-standing 'gradual' and 'careful' wording ... Going forward, further disagreements should be anticipated as member's positions become increasingly entrenched, reflecting the increasing divergence of key data points." https://www.reuters.com/world/uk/divided-bank-england-cuts-rates-pound-jumps-2025-08-07/
2025-08-07 11:33
Aug 7 (Reuters) - ConocoPhillips (COP.N) , opens new tab will sell its Anadarko Basin assets for $1.3 billion, the energy producer said on Thursday, after beating Wall Street estimates for second-quarter profit. Shares of the company rose nearly 2% in premarket trade. Sign up here. The asset sale, expected to close at the beginning of the fourth quarter, pushes ConocoPhillips past its $2 billion non-core asset disposition target ahead of schedule. In April, Reuters reported ConocoPhillips was exploring the sale of its Oklahoma oil-and-gas assets that were secured under its $22.5 billion takeover of Marathon Oil in 2024 - a deal that had expanded the company's footprint in the Permian, Eagle Ford, and Bakken basins, while also adding operations in the Anadarko shale formation and Equatorial Guinea. The Marathon deal helped lift the company's second-quarter production to 2.39 million barrels of oil equivalent per day (boepd), up 446,000 boepd from a year earlier. Third-quarter production is expected to be 2.33 to 2.37 million boepd, the company said in a statement. The production growth helped ConocoPhillips cushion the impact of lower crude prices. Brent crude averaged nearly 20% lower in the second quarter from a year earlier, as U.S. import tariffs, weak global economic signals and higher output from OPEC+ weighed on prices. Geopolitical tensions also pressured sentiment. Prices briefly rose above $80 per barrel in June after Israel struck Iranian nuclear sites, but eased to around $67 by the end of the quarter amid demand concerns and fading risk premiums. The company's total average realized prices stood at $45.77 per barrel oil equivalent, 19% lower than a year earlier. On an adjusted basis, ConocoPhillips reported a profit of $1.42 per share for the three months ended June 30, compared with analysts' average estimate of $1.38, according to data compiled by LSEG. https://www.reuters.com/business/energy/conocophillips-sell-anadarko-assets-13-bln-profit-beats-estimates-2025-08-07/
2025-08-07 11:25
MEXICO CITY Aug 7 (Reuters) - Nestled in a quiet corner in Mexico City’s trendy Condesa neighborhood sits the vine-strewn restaurant Baldio, or barren in English. It has become a draw for its zero-waste kitchen, which means that every scrap of food and leftovers is reused for other purposes. The restaurant, which opened in 2024 and seats 52 people, is routinely packed since it was honored in June with a Michelin Green Star for its innovative sustainability model. Baldio’s owners say it is the first zero-waste restaurant in Mexico City. Sign up here. Baldio offers Mexican food with a gourmet take, such as yellow corn tamal with fermented salsa and pickles, a Mexican sweet corn salad with smoked butter sauce and cured buffalo meat, and grilled sweet onions with grasshoppers and hibiscus dressing. Pablo Usobiaga, one of Baldio’s three co-founders, said the restaurant’s name is a rejection of the idea that “control, efficiency and profitability” are the most important aspects of our lives. “It is a way of challenging the status quo of profitability and absolute control.” Fish remains are crafted into a fermented fish sauce, fruit peels are fermented into a traditional Mexican fermented beverage, and onion scraps are fermented until they turn into a powder-like seasoning. All of Baldio’s ingredients are sourced within 125 miles (200 km) of the restaurant in an effort to reduce its carbon footprint. The majority come from an assortment of floating farms that sit atop an interweaving network of canals in southern Mexico City. The floating farms, known as chinampas, were created a thousand years ago when Aztec farmers built fields on lakes so they could grow food year-round. Usobiaga’s brother, Lucio, started working with farmers in the area 15 years ago to help them preserve centuries-old agricultural practices, such as using special fermentation techniques and organic fertilizers. As part of their weekly routine, Baldío’s chefs travel to Xochimilco to meet with local farmers and explore the crops. Flowers are used in negronis, warm infusions and honey-based fermented drinks. The restaurant’s menu changes every week, guided by the season and harvest. Lucio said the restaurant requires a creative spirit to constantly adapt to the changing harvest. "What drives us in the end is this excitement about doing things this way," he said. https://www.reuters.com/lifestyle/mexico-city-restaurant-blends-zero-waste-ancient-agriculture-2025-08-07/
2025-08-07 11:21
KUWAIT, Aug 7 (Reuters) - Kuwait's oil minister Tariq Al-Roumi said on Thursday that OPEC is closely monitoring global oil supply, demand trends, and U.S. President Donald Trump's recent remarks on Russian oil. "Through OPEC, we are monitoring the market in terms of supply and demand, and we are monitoring the U.S. President’s statements," Al-Roumi told reporters, adding that he expects oil prices to be below $72 per barrel. Sign up here. The minister described the market as healthy, with demand growing at a moderate pace. Oil prices slid about 1% to an eight-week low on Wednesday after U.S. President Donald Trump's remarks about progress in talks with Moscow created uncertainty over whether the U.S. would impose further sanctions on Russia. Trump has threatened additional sanctions on Moscow if no moves are made to end the war in Ukraine. Washington imposed on Wednesday an additional 25% tariff on Indian goods, citing New Delhi's continued imports of Russian oil. The CEO of Kuwait Petroleum Corporation said that the country's quota production according to OPEC's latest agreement is 2.548 million barrels per day (bpd) and it has capacity to produce more. "We are producing this quota, and we have a production capacity that far exceeds that, and we use this capacity when necessary," Sheikh Nawaf S. Al-Sabah said to reporters. OPEC and its allies, together known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September. The latest in a series of accelerated output increases aimed at capturing market share was in line with market expectations and marked a full and early reversal of the group's largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4% of global demand. https://www.reuters.com/business/energy/kuwait-oil-minister-says-opec-monitoring-market-trump-remarks-russian-oil-2025-08-07/
2025-08-07 11:20
By William Schomberg, David Milliken and Suban Abdulla LONDON, Aug 7 (Reuters) - The Bank of England cut interest rates on Thursday but four of its nine policymakers - worried about high inflation - sought to keep borrowing costs on hold. Sign up here. Difficulty reaching an agreement meant the Monetary Policy Committee had to hold two rate votes for the first time in its history. With the MPC split over how to respond to an inflation rate that the BoE forecasts will soon be double its 2% target and a recent worsening of job losses, Governor Andrew Bailey and four colleagues backed lowering Bank Rate to 4% from 4.25%. But that was only after a first round of voting ended in a 4-4-1 split with external MPC member Alan Taylor initially backing a half-point cut. The four members of the MPC who backed keeping rates on hold included Clare Lombardelli, the deputy governor for monetary policy, who broke from the majority for the first time. Chief Economist Huw Pill also voted to keep Bank Rate at 4.25%. The BoE repeated its guidance about "a gradual and careful approach" to further cuts in borrowing costs but added a new line to its message on the outlook, hinting that its run of rate cuts might be nearing an end. "The restrictiveness of monetary policy had fallen as Bank Rate had been reduced," it said, no longer directly saying that policy was still restrictive. It repeated that there was no pre-set path for borrowing costs. A halt to the process of cutting rates would be a blow for finance minister Rachel Reeves and Prime Minister Keir Starmer, who have struggled to meet their promise to voters to speed up Britain's slow economic growth. Bailey said the decision to cut rates for the fifth time since August last year was "finely balanced" although he thought they were still on a downward path. "But any future rate cuts will need to be made gradually and carefully," Bailey said in a statement. CONFLICTING RISKS The BoE is being pulled in different directions, leaving analysts, as well as its own policymakers, divided on its most likely moves in the coming months. Britain's jobs market has weakened in recent months in part due to a tax hike by Reeves on employers and U.S. President Donald Trump's trade war. But inflation is rising. The BoE revised up its forecast for a peak in inflation to 4% in September from 3.7% and said it would remain alert to the risk that the increase in prices - especially those of food - pushes up wage deals and longer-term price pressures. "Overall, the MPC judges that the upside risks around medium-term inflationary pressures have moved slightly higher since May," the summary of the meeting said. The BoE said it expected inflation to return to its 2% target only in the second quarter of 2027, three months later than its previous forecast. By contrast, the European Central Bank expects inflation in the euro zone to hold below 2%. It has cut borrowing costs eight times since June of last year, three more reductions than those of the BoE. Inflation has been above the BoE's 2% target almost constantly since May 2021. The British central bank said it expected economic growth of 0.3% in the July-to-September period, up from 0.1% in the second quarter. Its longer-term growth forecasts were little changed from its report in May with annual growth of just over 1% in the coming years. Before Thursday's expected rate cut, investors were mostly pricing in another rate cut in November but only one or two more in 2026. Bailey and other top BoE officials were due to hold a press conference at 1130 GMT. (([email protected] , opens new tab)) Keywords: BRITAIN BOE/ https://www.reuters.com/world/uk/bank-england-cuts-rates-4-after-narrow-5-4-vote-2025-08-07/
