We’ve moved
Please find us at our new address:
4 Queen Street,
Bath,
BA1 1HE
Please find us at our new address:
4 Queen Street,
Bath,
BA1 1HE
We’ve moved
Bath’s premiere investment managers
Based in Bath, we are large enough to offer the highest standard of investment management, but small enough to treat all our clients as individuals.
Based in Bath, we are large enough to offer the highest standard of investment management, but small enough to treat all our clients as individuals.
Questions for Investors
When you are looking for someone to manage your money, you want to work with someone you can trust and who understands how the financial markets work. You want someone that understands how to balance risk with return. Accrue Investment management build trust from the start. We look at what assets you have and where your money should be invested, based fully on our understanding of your appetite for risk. We consider every option, balancing potential risks with potential returns.
• Are your investments achieving a good level of income?
• How have your investments performed over the last year?
• Would you like a free portfolio review?
We would like to know the answers to these questions so please get in touch:
When you are looking for someone to manage your money, you want to work with someone you can trust and who understands how the financial markets work. You want someone that understands how to balance risk with return. Accrue Investment management build trust from the start. We look at what assets you have and where your money should be invested, based fully on our understanding of your appetite for risk. We consider every option, balancing potential risks with potential returns.
• Are your investments achieving a good level of income?
• How have your investments performed over the last year?
• Would you like a free portfolio review?
We would like to know the answers to these questions so please get in touch:
CF Woodford Equity Income Fund Update
August was a brutal month in equity markets, as the plunge in Chinese stock markets continued, spreading panic worldwide.
Early in the month, the Chinese authorities allowed the renminbi to devalue over three consecutive days. This caused concerns about currency wars and the prospect of deflation being exported around the world, and prompted fears that China’s economic situation could be much worse than previously suspected. Then, on 24 August, the domestic Chinese stock market suffered its biggest one-day fall for eight years, compounding its earlier losses and causing an immediate sell-off in global markets. Although most developed indices recovered some of their poise thereafter, all major markets fell in dollar terms over the month.
Although there were some powerful technical factors at play which may have contributed to the extreme volatility, the move lower was initially triggered by a sudden realisation by the equity market that the fundamental health of the Chinese economy and indeed the wider global environment were not as robust as valuations had been implying. That the Chinese economy is slowing has been no secret, however – recent quarterly growth figures have lacked credibility when compared with other real economic data. The problems in China are significant and further vindicate the cautious view of the global economy that we have held for some time.
Given our concerns about productivity, deflation, debt and the overall global growth outlook, we have built the portfolio on the expectation that it will receive little help from macroeconomic trends. In general, this strategy and our overall investment approach served the fund relatively well through the volatile conditions, although the portfolio was unable to avoid a decline in absolute terms.
Among the largest detractors this month were our large-cap tobacco and pharmaceutical holdings: British American Tobacco, Imperial Tobacco, AstraZeneca and GlaxoSmithKline. In a panic-driven sell-off such as that which we saw in August, it’s often the largest and most liquid stocks that get hit hardest first. We have seen no fundamental justification for the share price declines and we added to each of these holdings, and several others, during the market turmoil.
Our US biotech holdings were also hit hard. The month’s largest detractor was Northwest Biotherapeutics, after rumours that the clinical trial of its DCVax-L oncology treatment had been suspended. The company has confirmed that the suspension related simply to the recruitment of new patients and was a temporary measure while regulatory information was submitted, in line with clinical protocols. The trial is continuing and we see nothing untoward in this development. Alkermes and Prothena sold off heavily too – again, we have no fundamental grounds for concern and were able to take advantage of the share price weakness.
The most important positive contribution came from one of our unquoted holdings, Stratified Medical, which was subject to an independent revaluation. Stratified Medical is a technology company serving the global healthcare industry which combines human intuition with powerful algorithms to intelligently search and contextualise existing scientific research. When we first invested in the company in October 2014, the company had already identified and out-licensed two new potential targets for Alzheimer’s disease and had also successfully demonstrated the platform’s ability to identify other new prospective therapies. The funding round was intended to allow further development work on its technology platform to progress it towards ‘self-learning’.
Since then, the Alzheimer’s programmes have progressed extremely well, with the targets being successfully validated and initial milestones met. Furthermore, confidence in the platform’s broader capabilities is increasing, as is interest from the wider health care industry in this extraordinary technology. Consequently, the company has recently announced a further funding round which we participated in and the value of the existing stake has been independently uplifted to the new valuation. We continue to see considerable long-term growth potential in the business as it continues to develop and commercialise its very impressive intellectual property based around a unique partnership of artificial intelligence and healthcare innovation.
Elsewhere, Circassia performed well despite little in the way of news. The company’s share price strength may have resulted from its likely inclusion in the FTSE 250 later this month but investors may also be warming to the potential of its recent acquisitions of Aerocrine and Prosonix, which position Circassia as a world-class allergy and asthma specialist.
Several of our intellectual property commercialising businesses, such as Allied Minds, IP and Imperial Innovations, were also all among the top contributors for the month, with all of them bucking the general downturn in the market to produce modestly positive returns.
Our main portfolio activity in August focused on taking advantage of the indiscriminate share price falls that accompanied the market panic towards the end of the month. This allowed us to add to a number of existing holdings at incredibly attractive valuation levels.
We also introduced two new US health care positions to the portfolio in the form of AbbVie and Theravance Biopharma. AbbVie trades on one of the most attractive valuations in its sector despite also offering one of the fastest anticipated growth rates. This is in part explained by fears about the future of Humira, AbbVie’s treatment for auto-immune conditions such as rheumatoid arthritis, Crohn’s disease and ulcerative colitis. Humira is the biggest selling drug in the world and continues to grow quickly but is due to come off patent soon. The valuation discounts an immediate threat to the franchise once the patent estate starts to expire, but we believe that this significantly underestimates the extent to which AbbVie can protect the Humira franchise through further innovation and overestimates the probability that generic ‘biosimilars’ can be launched. Theravance Biopharma, meanwhile, is an earlier stage biotech business with one on-market drug (a new antibiotic for difficult-to-treat infections) and a very exciting clinical pipeline.
Cequr also joined the portfolio as an unquoted position. This Swiss early-stage business has developed a simple 3-day patch-like insulin delivery device for people with type 2 diabetes. The recently completed funding round provides Cequr with the capital to complete its clinical and regulatory requirements and commence commercialisation of the device.
We also continued to add to the holding in Essentra, the plastics and packaging firm, throughout the month. We know the business (it was spun out of Bunzl in 2005 and we were initially shareholders in both) and its management team well (we knew Colin Day, chief executive, for a long time as finance director of Reckitt Benckiser). Day and his team have achieved a lot in recent years, improving margins, increasing investment and reshaping the business through merger & acquisition activity. The shares have tended to perform well to reflect this transformation but recent under-performance has provided an opportunity to build a position at an attractive valuation level.
In terms of disposals, we reduced the position in Centrica which had held up relatively well in the early part of the market declines. We also reduced the position in Zegona and trimmed Royal Mail following its robust performance in recent months.
________________________________________
The views expressed in this article are those of the author at the date of publication and not necessarily those of Woodford Investment Management LLP. The contents of this article are not intended as investment advice and will not be updated after publication unless otherwise stated.
TER
August was a brutal month in equity markets, as the plunge in Chinese stock markets continued, spreading panic worldwide.
Early in the month, the Chinese authorities allowed the renminbi to devalue over three consecutive days. This caused concerns about currency wars and the prospect of deflation being exported around the world, and prompted fears that China’s economic situation could be much worse than previously suspected. Then, on 24 August, the domestic Chinese stock market suffered its biggest one-day fall for eight years, compounding its earlier losses and causing an immediate sell-off in global markets. Although most developed indices recovered some of their poise thereafter, all major markets fell in dollar terms over the month.
Although there were some powerful technical factors at play which may have contributed to the extreme volatility, the move lower was initially triggered by a sudden realisation by the equity market that the fundamental health of the Chinese economy and indeed the wider global environment were not as robust as valuations had been implying. That the Chinese economy is slowing has been no secret, however – recent quarterly growth figures have lacked credibility when compared with other real economic data. The problems in China are significant and further vindicate the cautious view of the global economy that we have held for some time.
Given our concerns about productivity, deflation, debt and the overall global growth outlook, we have built the portfolio on the expectation that it will receive little help from macroeconomic trends. In general, this strategy and our overall investment approach served the fund relatively well through the volatile conditions, although the portfolio was unable to avoid a decline in absolute terms.
Among the largest detractors this month were our large-cap tobacco and pharmaceutical holdings: British American Tobacco, Imperial Tobacco, AstraZeneca and GlaxoSmithKline. In a panic-driven sell-off such as that which we saw in August, it’s often the largest and most liquid stocks that get hit hardest first. We have seen no fundamental justification for the share price declines and we added to each of these holdings, and several others, during the market turmoil.
Our US biotech holdings were also hit hard. The month’s largest detractor was Northwest Biotherapeutics, after rumours that the clinical trial of its DCVax-L oncology treatment had been suspended. The company has confirmed that the suspension related simply to the recruitment of new patients and was a temporary measure while regulatory information was submitted, in line with clinical protocols. The trial is continuing and we see nothing untoward in this development. Alkermes and Prothena sold off heavily too – again, we have no fundamental grounds for concern and were able to take advantage of the share price weakness.
The most important positive contribution came from one of our unquoted holdings, Stratified Medical, which was subject to an independent revaluation. Stratified Medical is a technology company serving the global healthcare industry which combines human intuition with powerful algorithms to intelligently search and contextualise existing scientific research. When we first invested in the company in October 2014, the company had already identified and out-licensed two new potential targets for Alzheimer’s disease and had also successfully demonstrated the platform’s ability to identify other new prospective therapies. The funding round was intended to allow further development work on its technology platform to progress it towards ‘self-learning’.
Since then, the Alzheimer’s programmes have progressed extremely well, with the targets being successfully validated and initial milestones met. Furthermore, confidence in the platform’s broader capabilities is increasing, as is interest from the wider health care industry in this extraordinary technology. Consequently, the company has recently announced a further funding round which we participated in and the value of the existing stake has been independently uplifted to the new valuation. We continue to see considerable long-term growth potential in the business as it continues to develop and commercialise its very impressive intellectual property based around a unique partnership of artificial intelligence and healthcare innovation.
Elsewhere, Circassia performed well despite little in the way of news. The company’s share price strength may have resulted from its likely inclusion in the FTSE 250 later this month but investors may also be warming to the potential of its recent acquisitions of Aerocrine and Prosonix, which position Circassia as a world-class allergy and asthma specialist.
Several of our intellectual property commercialising businesses, such as Allied Minds, IP and Imperial Innovations, were also all among the top contributors for the month, with all of them bucking the general downturn in the market to produce modestly positive returns.
Our main portfolio activity in August focused on taking advantage of the indiscriminate share price falls that accompanied the market panic towards the end of the month. This allowed us to add to a number of existing holdings at incredibly attractive valuation levels.
We also introduced two new US health care positions to the portfolio in the form of AbbVie and Theravance Biopharma. AbbVie trades on one of the most attractive valuations in its sector despite also offering one of the fastest anticipated growth rates. This is in part explained by fears about the future of Humira, AbbVie’s treatment for auto-immune conditions such as rheumatoid arthritis, Crohn’s disease and ulcerative colitis. Humira is the biggest selling drug in the world and continues to grow quickly but is due to come off patent soon. The valuation discounts an immediate threat to the franchise once the patent estate starts to expire, but we believe that this significantly underestimates the extent to which AbbVie can protect the Humira franchise through further innovation and overestimates the probability that generic ‘biosimilars’ can be launched. Theravance Biopharma, meanwhile, is an earlier stage biotech business with one on-market drug (a new antibiotic for difficult-to-treat infections) and a very exciting clinical pipeline.
Cequr also joined the portfolio as an unquoted position. This Swiss early-stage business has developed a simple 3-day patch-like insulin delivery device for people with type 2 diabetes. The recently completed funding round provides Cequr with the capital to complete its clinical and regulatory requirements and commence commercialisation of the device.
We also continued to add to the holding in Essentra, the plastics and packaging firm, throughout the month. We know the business (it was spun out of Bunzl in 2005 and we were initially shareholders in both) and its management team well (we knew Colin Day, chief executive, for a long time as finance director of Reckitt Benckiser). Day and his team have achieved a lot in recent years, improving margins, increasing investment and reshaping the business through merger & acquisition activity. The shares have tended to perform well to reflect this transformation but recent under-performance has provided an opportunity to build a position at an attractive valuation level.
In terms of disposals, we reduced the position in Centrica which had held up relatively well in the early part of the market declines. We also reduced the position in Zegona and trimmed Royal Mail following its robust performance in recent months.
________________________________________
The views expressed in this article are those of the author at the date of publication and not necessarily those of Woodford Investment Management LLP. The contents of this article are not intended as investment advice and will not be updated after publication unless otherwise stated.
TER
Economic News
Last week the Bank of England surprised observers by striking an unexpectedly dovish stance, apparently delaying a keenly anticipated interest rate rise until next year despite a strengthening economy. With the Bank downgrading its short-term forecasts for inflation, only one member of its nine-strong Monetary Policy Committee voted in favour of a rate increase, leaving an overwhelming 8-1 majority in favour of keeping borrowing costs at their current level of 0.5%. The rebound in second-quarter GDP “confirms weakness at the start of the year was merely temporary,” the National Institute of Economic and Social Research said in its quarterly review. June’s UK industrial production figures highlighted that the strong pound and weak overseas demand held back the manufacturing sector’s recovery in the second quarter.
Last week the Bank of England surprised observers by striking an unexpectedly dovish stance, apparently delaying a keenly anticipated interest rate rise until next year despite a strengthening economy. With the Bank downgrading its short-term forecasts for inflation, only one member of its nine-strong Monetary Policy Committee voted in favour of a rate increase, leaving an overwhelming 8-1 majority in favour of keeping borrowing costs at their current level of 0.5%. The rebound in second-quarter GDP “confirms weakness at the start of the year was merely temporary,” the National Institute of Economic and Social Research said in its quarterly review. June’s UK industrial production figures highlighted that the strong pound and weak overseas demand held back the manufacturing sector’s recovery in the second quarter.
Questions for Investors
When you are looking for someone to manage your money, you want to work with someone you can trust and who understands how the financial markets work. You want someone that understands how to balance risk with return. Accrue Investment management build trust from the start. We look at what assets you have and where your money should be invested, based fully on our understanding of your appetite for risk. We consider every option, balancing potential risks with potential returns.
• Are your investments achieving a good level of income?
• How have your investments performed over the last year?
• Would you like a free portfolio review?
We would like to know the answers to these questions so please get in touch:
When you are looking for someone to manage your money, you want to work with someone you can trust and who understands how the financial markets work. You want someone that understands how to balance risk with return. Accrue Investment management build trust from the start. We look at what assets you have and where your money should be invested, based fully on our understanding of your appetite for risk. We consider every option, balancing potential risks with potential returns.
• Are your investments achieving a good level of income?
• How have your investments performed over the last year?
• Would you like a free portfolio review?
We would like to know the answers to these questions so please get in touch:
The Price of Gold – 23rd July 2015
The price of gold closed below $1,100 for the first time in 5 years this week. Analysts once predicted that gold prices would surge to $5,000 an ounce, but now many are saying that the precious metal could fall back through the $1,000 mark before the end of 2015.
Here are a few reasons for the decline in price:
The strength of the US dollar
The US dollar has been gaining in value on the back of positive data on the economy. The value of the dollar typically has an inverse relationship with commodities. The reason for this is like other commodities, gold is priced in dollars on international markets. This means that when the dollar rises investors have less buying power and commodities become more expensive.
Interest rate rise
Another factor emanating from the US is the recent talk of an interest rate rise. The Federal Reserve has been dropping strong hints that it may increase the base rate sooner rather than later, and possibly in 2015. That will diminish the attraction of non-yielding assets such as gold. Since gold provides neither a dividend nor an income, there is an opportunity cost of holding the asset that may be worth paying in bad times, when interest rates are low and the gold price is likely to be rising. But, when markets are improving, interest rates are rising and returns are increasing, that opportunity cost starts to become less attractive.
Less negative news
Greece has stepped back from the abyss – at least for now. The global economy seems to be trundling along and Western countries are seeing a return to growth. An apocalypse predicted by many, which would have scared investors into assets such as gold, has not happened.
Technical trades
This last point is one often missed in analyses of any sharp market fall. Many trades are now executed on an automated basis, with software which is designed to buy or sell when a price hits a given high or low level to manage risk in big portfolios. Gold has reached the sort of low where the ‘stop-loss’ trades kick in, further fuelling a sell-off. The irony is that these programs are designed to limit risk exposure and losses when in reality they often exaggerate market swings and increase nominal losses.
Martin Badder ACSI
Investment Manager
The price of gold closed below $1,100 for the first time in 5 years this week. Analysts once predicted that gold prices would surge to $5,000 an ounce, but now many are saying that the precious metal could fall back through the $1,000 mark before the end of 2015.
Here are a few reasons for the decline in price:
The strength of the US dollar
The US dollar has been gaining in value on the back of positive data on the economy. The value of the dollar typically has an inverse relationship with commodities. The reason for this is like other commodities, gold is priced in dollars on international markets. This means that when the dollar rises investors have less buying power and commodities become more expensive.
Interest rate rise
Another factor emanating from the US is the recent talk of an interest rate rise. The Federal Reserve has been dropping strong hints that it may increase the base rate sooner rather than later, and possibly in 2015. That will diminish the attraction of non-yielding assets such as gold. Since gold provides neither a dividend nor an income, there is an opportunity cost of holding the asset that may be worth paying in bad times, when interest rates are low and the gold price is likely to be rising. But, when markets are improving, interest rates are rising and returns are increasing, that opportunity cost starts to become less attractive.
Less negative news
Greece has stepped back from the abyss – at least for now. The global economy seems to be trundling along and Western countries are seeing a return to growth. An apocalypse predicted by many, which would have scared investors into assets such as gold, has not happened.
Technical trades
This last point is one often missed in analyses of any sharp market fall. Many trades are now executed on an automated basis, with software which is designed to buy or sell when a price hits a given high or low level to manage risk in big portfolios. Gold has reached the sort of low where the ‘stop-loss’ trades kick in, further fuelling a sell-off. The irony is that these programs are designed to limit risk exposure and losses when in reality they often exaggerate market swings and increase nominal losses.
Martin Badder ACSI
Investment Manager
Macro Update – 17th July 2015
Greece’s parliament backed a slew of fresh austerity measures demanded by the country’s creditors, clearing the way for talks to begin on a fresh €86bn bailout package to prevent the country crashing out of the Eurozone. Mario Draghi, head of the European Central Bank, affirmed his faith in Greece remaining in the euro as the central bank raised its limit on emergency loans to Greek banks by €900m. “The ECB continues to act on the assumption that Greece is and will remain a member of the euro area,” Mr Draghi said. The ECB move prompted Athens to signal that its banks, which have been shut for two weeks, would reopen on Monday but Capital controls will remain in place. Athens received further relief when EU officials finalised a plan to provide €7bn in bridge financing to save it from defaulting on an ECB loan due on 20th July.
Markets were focused on the timing of interest rate rises. Bank of England Governor Mark Carney and policy maker David Miles flagged the prospect of earlier-than- anticipated UK rate increases as the economy improves. Federal Reserve chair Janet Yellen on Thursday said the US jobs market had moved demonstrably closer to a more normal state, a reason why the central bank is likely to raise short-term interest rates later this year.
UK retail sales saw some of their strongest annual growth in the past two years last month, boosted by warm weather at the end of the month and an early start to summer sales, an industry body said on Tuesday.
China’s economy grew 7% year-on-year in the second quarter, slightly better than analysts’ forecasts.
The Bank of Japan refrained from increasing its monetary stimulus even as it trimmed its inflation outlook, as officials count on the economy pulling out of a soft patch and consumer price gains accelerating toward its target.
Martin Badder ACSI
Investment Manager
Greece’s parliament backed a slew of fresh austerity measures demanded by the country’s creditors, clearing the way for talks to begin on a fresh €86bn bailout package to prevent the country crashing out of the Eurozone. Mario Draghi, head of the European Central Bank, affirmed his faith in Greece remaining in the euro as the central bank raised its limit on emergency loans to Greek banks by €900m. “The ECB continues to act on the assumption that Greece is and will remain a member of the euro area,” Mr Draghi said. The ECB move prompted Athens to signal that its banks, which have been shut for two weeks, would reopen on Monday but Capital controls will remain in place. Athens received further relief when EU officials finalised a plan to provide €7bn in bridge financing to save it from defaulting on an ECB loan due on 20th July.
Markets were focused on the timing of interest rate rises. Bank of England Governor Mark Carney and policy maker David Miles flagged the prospect of earlier-than- anticipated UK rate increases as the economy improves. Federal Reserve chair Janet Yellen on Thursday said the US jobs market had moved demonstrably closer to a more normal state, a reason why the central bank is likely to raise short-term interest rates later this year.
UK retail sales saw some of their strongest annual growth in the past two years last month, boosted by warm weather at the end of the month and an early start to summer sales, an industry body said on Tuesday.
China’s economy grew 7% year-on-year in the second quarter, slightly better than analysts’ forecasts.
The Bank of Japan refrained from increasing its monetary stimulus even as it trimmed its inflation outlook, as officials count on the economy pulling out of a soft patch and consumer price gains accelerating toward its target.
Martin Badder ACSI
Investment Manager
Monthly Roundup
In May, global equity markets provided positive returns, in sterling terms. In the UK, equities outperformed, thanks largely to the boost in sentiment following the surprise general-election result, which brought a Conservative majority to power. This smoother than expected political transition was well received by investors. Meanwhile, European equities were down in sterling terms amid intensifying concerns that Greece would miss the June deadlines for repayment to its creditors. Equity markets in the US made gains, helped along by the stronger dollar. Despite a downwards revision to the official first quarter GDP figure, from 0.2% expansion to 0.7% contraction, investors seemed to side with the US Federal Reserve, which attributed the weaker data to extraordinary factors like the harsh winter weather and lower oil prices. Elsewhere, emerging market and Asian equities were down for the month. Chinese equities were affected by bouts of profit taking, but there was strong evidence in the form of an interest-rate cut by China’s central bank – that the authorities would maintain their accommodative policy stance.
In May, global equity markets provided positive returns, in sterling terms. In the UK, equities outperformed, thanks largely to the boost in sentiment following the surprise general-election result, which brought a Conservative majority to power. This smoother than expected political transition was well received by investors. Meanwhile, European equities were down in sterling terms amid intensifying concerns that Greece would miss the June deadlines for repayment to its creditors. Equity markets in the US made gains, helped along by the stronger dollar. Despite a downwards revision to the official first quarter GDP figure, from 0.2% expansion to 0.7% contraction, investors seemed to side with the US Federal Reserve, which attributed the weaker data to extraordinary factors like the harsh winter weather and lower oil prices. Elsewhere, emerging market and Asian equities were down for the month. Chinese equities were affected by bouts of profit taking, but there was strong evidence in the form of an interest-rate cut by China’s central bank – that the authorities would maintain their accommodative policy stance.
FTSE100 Closes at a Fresh Record High
The US Federal Reserve’s cautious signal gave a boost to safe haven assets like gold
The FTSE 100 index of top stocks nudged above its record high yesterday, as a rush for precious metals propped up shares in London-listed mining companies.
Gold and silver, seen as safe haven assets, began to surge on Wednesday night after the US Federal Reserve struck a cautious note about economic growth.
Traders pointed to the Fed’s so-called dot plot, which showed that members of the central bank’s rate-setting panel expect a gentler pace of rate rises in the coming years. This can be read as a sign the world’s biggest economy will recover more slowly than expected, despite the Fed hinting that it will start to increase rates later this year.
“[T]he Federal Reserve suggested a less aggressive timeline for raising interest rates even as it opened the door for the first hike in almost a decade,” said David Papier, market analyst at ETX Capital.
This caution was echoed by Bank of England official Andy Haldane, who said a cut to interest rates was just as likely as an increase.
Gold spot prices were up 0.4pc to $1,172 an ounce by yesterday evening, building on gains made after the Fed statement. Silver prices rose 1.3pc to $16.16 an ounce.
The FTSE 100 index of blue-chip shares briefly touched a fresh intra-day high of 6,982.79 during morning trading, breaking a record set on March 2. The index then closed the day 17.12 points higher at 6,962.32, which beat the March 5 close. Until a month ago, the record level had been untouched since December 1999.
The US Federal Reserve’s cautious signal gave a boost to safe haven assets like gold
The FTSE 100 index of top stocks nudged above its record high yesterday, as a rush for precious metals propped up shares in London-listed mining companies.
Gold and silver, seen as safe haven assets, began to surge on Wednesday night after the US Federal Reserve struck a cautious note about economic growth.
Traders pointed to the Fed’s so-called dot plot, which showed that members of the central bank’s rate-setting panel expect a gentler pace of rate rises in the coming years. This can be read as a sign the world’s biggest economy will recover more slowly than expected, despite the Fed hinting that it will start to increase rates later this year.
“[T]he Federal Reserve suggested a less aggressive timeline for raising interest rates even as it opened the door for the first hike in almost a decade,” said David Papier, market analyst at ETX Capital.
This caution was echoed by Bank of England official Andy Haldane, who said a cut to interest rates was just as likely as an increase.
Gold spot prices were up 0.4pc to $1,172 an ounce by yesterday evening, building on gains made after the Fed statement. Silver prices rose 1.3pc to $16.16 an ounce.
The FTSE 100 index of blue-chip shares briefly touched a fresh intra-day high of 6,982.79 during morning trading, breaking a record set on March 2. The index then closed the day 17.12 points higher at 6,962.32, which beat the March 5 close. Until a month ago, the record level had been untouched since December 1999.