Time to recap
Stock markets have shrugged off their anxiety over rising government bond yields, and rallied sharply as optimism over the recovery growth.
Britain’s FTSE 100 closed at a near three-week high, while European markets posted their best day in four months. Germany’s DAX surged to a new record, with banks and carmakers among the big risers.
The rally came as investors focused on the prospects for an economic revival this year, as Covid-19 vaccinations allow businesses to return to more normal conditions.
There was also relief that the US Senate has approved Joe Biden’s $1.9tn stimulus package.
The Treasury secretary, Janet Yellen, boosted sentiment, saying the package would fuel a “very strong recovery”, and dampening concerns that inflation could spiral higher.
This drove stocks higher on Wall Street too, where the Dow Jones industrial average has just hit a new record high.
Oil also jumped, hitting a 14-month high, after an attack on Saudi oil facilities. Brent crude hit $70 per barrel, before dropping back.
Earlier, the Bank of England governor, Andrew Bailey, declared there was “light at the end of the tunnel”.
There is a growing sense of economic optimism, in markets and in consumer and business confidence measures. The rate of new Covid infections is declining, and the vaccine programme is a huge achievement.
Bailey also shrugged off worries about inflationary pressures, and warned that unemployment would probably rise as the UK’s furlough scheme wraps up over the summer.
Consumer confidence is at a one-year high, as vaccinations continue to rattle along, and English schools reopened today.
However, Boris Johnson has cautioned tonight that the reopening of schools will have an impact on infection rates that could affect the roadmap for lifting restrictions.
In other news:
Greensill Capital, the main financial backer of Sanjeev Gupta’s steel empire, has entered administration.
BT has denied that chairman Jan du Plessis was driven out by a boardroom rift with its chief executive.
The meal delivery company Deliveroo has confirmed plans for a stock market debut in London, as it reported a narrower annual loss following a boom in demand during the Covid-19 pandemic.
BP has told 25,000 office-based staff that they will be expected to work from home for two days a week as part of a post-pandemic shift to flexible working patterns.