Coronavirus to spark “severe” global recession March 20, 2020 | City Talk The coronavirus is having a severe effect on global economic activity and amidst considerable uncertainty we have attempted to gauge the impact and updated our forecasts. We now expect to see the world economy contract this year by 3.1%, before rebounding by 7.2% in 2021. The forecast incorporates a severe recession in the first half [...]
Keith Wade: Is the world now heading for recession? March 13, 2020 | City Talk As I returned to the UK last weekend, my taxi driver talked of panic-buying and impending food shortages. Having wondered if I had stepped off at the wrong airport, it subsequently became clear that his thinking was very close to that of the markets. On Monday (9 March), equities sold off and credit spreads widened [...]
Coronavirus: the economic impact March 5, 2020 | City Talk The coronavirus threatens to derail the revival in global economic growth which began in the latter part of 2019. Economic indicators up to January continued to show an improvement in activity with business surveys signalling rising orders and output. However, confidence in the sustainability of the upswing has been undermined by the virus, officially known [...]
DEBATE: Should the Bank of England cut interest rates this week? January 29, 2020 Should the Bank of England cut interest rates this week? Simon Ward, economic adviser at Janus Henderson Investors, says YES. The Monetary Policy Committee (MPC) keeps making mistakes because it ignores monetary trends. It hiked rates in August 2018 even though 12-month broad money growth (as measured by non-financial M4) had slumped from 6.5 per [...]
Bank of England holds interest rate at 0.75 per cent December 19, 2019 The Bank of England has decided to hold interest rates at 0.75 per cent in its last meeting of 2019 as it warned there was little chance of significant economic growth this quarter. The Bank’s Monetary Policy Committee (MPC) voted 7-2 in favour of maintaining the rate, as it did at its previous meeting in [...]
Bank of England set to hold interest rate ahead of next governor announcement December 15, 2019 The Bank of England is this week expected to hold interest rates at 0.75 per cent, despite pressure from some quarters for a further quarter-point cut. On Thursday the Bank’s nine-member monetary policy committee, which is responsible for setting the interest rate, will announce its decision. Read more: Mark Carney appointed UN climate envoy ahead [...]
Pound sinks as Bank of England comes closer to interest rate cut November 7, 2019 The pound fell sharply this afternoon as the Bank of England came closer to signalling an interest rate cut. The Bank’s Monetary Policy Committee voted in favour of holding rates for the 15th month in a row, but traders were surprised as two members voted for an immediate rate cut. Read more: Bank of England: [...]
Over the last decade, central banks have gained huge influence over our lives November 4, 2019 Monetary policy, central bank independence, quantitative easing. These and many other subjects tend to make people’s eyes glaze over, and are best left to finance nerds to battle over in quiet corners. Yet central banks have, over the last decade, emerged from the shadows of arcane macroeconomic policy discussions to become fundamental to all our [...]
Bank of England could cut interest rates if Brexit uncertainty persists, says MPC member September 27, 2019 The Bank of England may need to cut interest rates even if a no-deal Brexit is avoided, according to a member of the monetary policy committee (MPC), which sets the rates. Michael Saunders has said that the Bank may have to cut rates if the “slow puncture” effect on the economy from Brexit uncertainty persists. [...]
Economy on red alert with yield curve close to inversion August 16, 2019 | City Talk Both the US and UK yield curves are on the verge of inverting. The yield curve has been a reliable predictor of US recessions over the last four decades, less so in the UK. With only one exception, each time the yield curve has inverted, the US economy has entered a downturn within 18 months. [...]