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Hi Reader, here's what you need to know for December 17th in 3:10 minutes.

🥛 Finimized over a milkshake at Paramount Coffee Project in Sydney, Australia (🌥 22°C/72°F)

Today's big stories

The Bank of England announced it would finally be raising interest rates
If you’re prepping your portfolio for 2022, you need to be aware of the five major risks to your investments – Read Now
Chinese AI company SenseTime might be listing this year after all

FOMOmicron

What’s Going On Here?

The Bank of England (BoE) announced on Thursday that it’s raising interest rates for the first time in three years, before it misses out on end-of-inflation celebrations altogether.

What Does This Mean?

Covid infections surged to a record high in the UK this week, which means investors were expecting the BoE to delay raising rates till next year to protect the fragile recovery. Not quite: the central bank admitted that while Omicron would take its toll on the UK economy, the strength of the jobs market had given it the confidence – and last month’s decade-high inflation the urgency – to step in. The decision to raise interest rates from 0.1% to 0.25% could be a sign of things to come too: the BoE said more increases will be needed in the next few months to bring inflation – which hit 5.1% in November – down to its 2% target (tweet this).

Why Should I Care?

The bigger picture: Europe commits to flip-flopping.
Europe’s in the same boat, with inflation in the region hitting a record high of 4.9% last month. The European Central Bank (ECB) announced plans on Thursday to halve the amount of bonds it’s buying next year, which should help bring that figure down. But the central bank also made itself perfectly clear: it’s more than happy to buy more again if Omicron causes more issues.

Zooming out: Turkey has… a plan?
Turkey’s gone the other way: the country’s central bank cut interest rates for a fourth-straight month on Thursday, even though prices were 21% higher in November than the same time a year ago. That could do even more damage to the Turkish lira, which has already lost about half its value relative to the dollar this year. And since it becomes less and less valuable to international savers and investors the longer rates are low, the currency fell another 5% versus the dollar to a record low after the announcement.

You might also like: Bill Ackman is betting big on inflation. Here’s how you can too.

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Analyst Take

The Five Biggest Risks To Your Portfolio In 2022

Carl Hazeley, Analyst

What’s Going On Here?

Analysts and economists are feeling good about the global economy in 2022 on the whole.

But that doesn’t mean they’re blind to the five big risks that could undo their high hopes in one fell swoop.

Omicron is the obvious one: the new variant could end up sparking a new wave of stay-at-home orders if it ends up being deadlier than Delta.

And according to a new modeling tool from Bloomberg, any Omicron-driven crash could single-handedly wipe 0.5% off global economic growth.

So that’s today’s Insight: the four other major risks to your portfolio in 2022, and the damage they could do if they come to pass.

Read or listen to the Insight here

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