Barclays PLC share price rises after key speech from Federal Reserve

Shares in Barclays bank (LON:BARC) soared in early trading on Thursday, outperforming the rest of the sector in a boost for investors.

Its share price moved up to 191.40 by 1000GMT, up 2.96 percent to pull the sector upwards. The prospect of higher interest rates sent several UK banking shares up, after the Federal Reserve signalled an end to its historic quantitative easing plan and that it would continue with planned rate rises.

Federal Reserve chair Janet Yellen remained confident on the US’ economic performance, saying that “the labour market has strengthened substantially.”

“The American people should feel the steps we have taken to normalise monetary policy are ones we feel are well justified, given the very substantial progress we have seen in the economy.”

Higher interest rates are typically good for banks, bringing it better earnings. Barclays are due to report their quarterly earnings on the 31st October, and last week Barclays had its stock rating noted as ‘Reiterates’ with the recommendation being set at ‘BUY’ by analysts at HSBC.

Other UK banks on the FTSE index have also risen on the back of Janet Yellen’s speech late last night, with Royal Bank of Scotland (LON:RBS) up 1.52 percent and HSBC Holdings (LON:HSBA) up 0.81 percent.