Rates rise will help the banks8 Jul 2021 12:06
“The FTSE 100 fell ... with miners and banks the principal sectors weighing on the index, suggesting that investors have started to worry again about the strength of the economic recovery. Miners’ fortunes are heavily tied to commodity prices and the cost of metals and minerals is typically determined by supply and demand for industrial projects around the world,” said AJ Bell’s mouthpiece, Russ Mould.
“Banks are also heavily influenced by economic activity. A strong period of growth means there could be greater opportunities to lend money to businesses and such a backdrop might also point to rising interest rates which increases the chance for the banking sector to make higher profit margins. If the economic outlook is not as strong, then investors start to go off banks for fear that it will be harder for them to push up earnings,”