Market Information Friday 5 August 2022

The Bank of England (BoE) raised its policy rate again yesterday. The central bank raised the interest rate by 50 basis points from 1.25% to 1.75%. This is the BoE’s 6th interest rate increase since December 2021, but so far it has always raised rates by 0.25%. With the 50 basis point increase, the central bank is taking the biggest step in more than 25 years. The central bank is trying to send the signal that it is trying to fight inflation further.

The inflation rate in the Netherlands in July was 10.3%. This was shown Thursday by figures from Statistics Netherlands. The inflation rate is higher than in previous months. In June and May the annual inflation rate was 8.6% and 8.8% respectively. Due to a sharp rise in energy prices, there was an increase in inflation last month. On an annual basis, energy prices were 108% higher in July, compared to a price increase of 84% in June. As of July 1, 2022, VAT on energy has been temporarily reduced from 21 percent to 9 percent. This reduction will last until December 31, 2022.

The price of oil has fallen again. The closing price of a barrel of West Texas Intermediate (WTI) was 2.0% lower at the end of the day on Thursday than at the beginning of the day. The price of a barrel of WTI is now USD 88.54, the lowest price is 6 months. Analysts attribute the decline to monetary tightening by central banks worldwide. In addition, demand for gasoline has plummeted worldwide. In July 2022, it was lower than every other month of July in the past 25 years (except July 2020).

The 6M Euribor increased with 2 basis points to 0.67% compared to previous business day. The 10Y Swap decreased with 6 basis points to 1.63% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.