World share markets stumbled on Thursday as U.S. bonds yields hit nine-month peaks, with the dollar shrugging off a U.S. credit downgrade to hit a four-week high and the British pound dipping after the Bank of England raised interest rates.
Sterling extended losses after the BoE decision, falling as much as 0.7% to its lowest since June 30. It was last down 0.2% at $1.2680.
The BoE decision was closely watched for clues on how central banks globally will balance taming inflation and maintaining growth. The BoE’s monetary policy committee (MPC) was split on the size of the rate hike.
“This split does leave a sense that the MPC itself is uncertain over what to do,” said Stuart Cole, chief macro strategist at Equiti Capital, “and indeed of how much of a danger the UK economy is at risk of being tipped into recession as monetary policy is tightened ever further.”
Wall Street was set to open in negative territory, too.