Bank of England to launch gentler but still record rate rise after mini budget U-turns October 16, 2022 The Bank of England can marginally take its foot off the accelerator after prime minister Liz Truss U-turned on key aspects of her tax cutting mini budget, but will still launch the biggest move in its 25 years of independence, City economists are betting. The monetary policy committee (MPC) is set to lift borrowing costs [...]
Analysis: Truss can’t buck the markets October 14, 2022 Around eight minutes is how long prime minister Liz Truss today allocated to explain why she sacked her chancellor for implementing her tax cuts and signed off her second mini budget U-turn. She clarified neither. She answered four questions and committed to her “mission” to boost growth in the UK at a Downing Street press [...]
UK borrowing costs tank as mini budget U-turn rumours gather pace October 14, 2022 UK borrowing costs fell sharply today driven by chancellor Kwasi Kwarteng and prime minister Liz Truss reportedly set to U-turn on more parts of their mini budget. The chancellor has today cut short his trip to the International Monetary Fund’s Washington meetings to hold emergency talks with Truss in London. Rumours of a second U-turn [...]
UK borrowing costs drop as Kwarteng hints at mini budget U-turn October 13, 2022 UK borrowing costs collapsed today driven by chancellor Kwasi Kwarteng sending the strongest signal yet he will roll back elements of last month’s mini budget. Rates on UK gilts dropped across the curve after they yesterday climbed to their highest level since the day the Bank was forced to step in. Yields on the 30-year [...]
City braced for end of £65bn Bank of England bond market package October 13, 2022 The City is bracing for the Bank of England to pull its £65bn emergency support package for the bond market tomorrow, but experts said volatility could be tamed by existing backstops supporting the pensions industry. Britain’s debt market has been rocked by concerns over the government’s financial credibility after it launched £43bn of tax cuts [...]
US inflation tops expectations in sign Federal Reserve has more work to do October 13, 2022 US inflation climbed higher than expected on a monthly basis in September in a sign the Federal Reserve’s series of steep rate hikes are failing to tame the toughest price pressures. Inflation hit 0.4 per cent last month, above Wall Street’s expectations of a 0.2 per cent increase and higher than August’s print, figures from [...]
The Inflation Game: War, Peace and the Perils of Central Banking October 13, 2022 | City Talk The descent is always more sudden than the increase; a balloon that has been punctured does not deflate in an orderly way. — John Kenneth Galbraith I travelled with my family to London and Normandy in July 2022. Our primary purpose was to meet up in France with my father-in-law, who had dreamed of visiting the [...]
Another Andrew Bailey misstep was the last thing markets needed October 12, 2022 Andrew Bailey’s tenure as Bank of England governor has not been a happy one. Marked first by the pandemic, it has been defined by rising prices, an economic slowdown and now a crisis of sorts in financial markets. Amidst all of this, the one thing the City would look for would be reliable and consistent [...]
Bank of England warns of ‘severe risks’ to market stability and financial crisis debt levels October 12, 2022 The Bank of England’s emergency £65bn bond buying scheme – that its chief Andrew Bailey last night confirmed will end on Friday – has been fighting “severe risks” to UK financial stability, the central bank said today. Turmoil in UK gilt markets since the government’s mini budget threatened to trigger “an excessive and sudden tightening [...]
UK economy on recession cliff edge as GDP unexpectedly shrinks October 12, 2022 The UK is staring over a recession cliff edge, caused by soaring inflation and rising interest rates, that will be lengthened by turmoil in financial markets, official figures published today revealed. The economy unexpectedly shrank 0.3 per cent over the month to August, according to the Office for National Statistics (ONS). Economists had expected gross [...]