DEBATE: Is the Bank of England out of ammunition for the next recession? Is the Bank of England out of ammunition for the next recession? Jumana Saleheen, chief economist at commodities consultant CRU Group, says YES. Lessons from history: central banks need to cut interest rates by about five percentage points in a recession. So if rates were six per cent, they would need to drop to one [...]
Could this pro-Brexit economist be what Threadneedle Street needs? Gerard Lyons’ candidacy for governor of the Bank of England may look like a pro-Brexit ploy, a way to sneak Boris Johnson’s optimism into a pessimistic institution. But Lyons – who has never worked in a central bank, served as Johnson’s chief economic adviser when the now-Prime Minister was mayor of London, and was previously [...]
Creative industries hiring from abroad as record employment creates skills shortage Britain's record employment rate has led to skills shortages in manufacturing, construction and financial services, but now it is taking its toll on the creative industries. Firms in animation, game design and visual effects – most of which are based in London – are turning to foreign graduates to plug skills gaps in the sector, [...]
Should the UK worry about its record current account deficit? March 31, 2016 The UK's current account deficit has reached its highest level since comparable records began in 1955. It rose to £32.7bn in the final three months of 2015, equal to seven per cent of GDP. A big current account deficit can often be a precursor to an economic crisis, so should the UK worry about it? A sign [...]
The mortgage market is helping to fuel a new credit boom March 31, 2016 Lending in the UK is recovering strongly. The annual growth rate of total lending hit 4.8 per cent in February, according to figures released by the Bank of England this morning. It is the highest growth rate since 2009 when lending was plummeting. Here's what is helping to drive it: Mortgage lending Borrowing is bouncing back in [...]
Brexit uncertainty could be weighing on consumer optimism March 31, 2016 Consumers have become more concerned over the UK’s economic outlook, according to new survey data released this morning. The confidence index produced by market researchers GFK remained at a score of zero in March. It is equal to February’s score of zero which was the lowest since 2014. Yet the index remains high by historical [...]
London is leading a second post-crisis boom in house prices March 30, 2016 House prices across the country continue to surge. Data published by the Land Registry this morning shows the average UK property price was £190,275 in February, a 6.1 per cent climb on the same month last year. London leads London house price growth continued to outpace the rest of England and Wales. The average price [...]
The four key points from Janet Yellen’s speech at the Economic Club of New York March 29, 2016 Federal Reserve chair Janet Yellen delivered a speech on the economy at the Economic Club of New York today. In case you missed it, here are the key points: Proceeding cautiously with interest rates Yellen believes the ability to deal with economic shocks is asymmetric. Because interest rates are near zero, she believes it's easier to respond [...]
Janet Yellen says Federal Reserve will “proceed cautiously” on interest rate rises March 29, 2016 Rate-setters at the US Federal Reserve will "proceed cautiously" when they come to decide their policy actions in the coming months. Federal Reserve chair Janet Yellen reiterated the view that the outlook for economic growth and inflation had weakened since the start of the year. She told an audience at the Economic Club of New York: Given the risks to [...]
Buy to let investors scramble to secure home purchases before April stamp duty rise March 29, 2016 Buy to let investors are storming the housing market to beat higher taxes that will come into force in April. In February, 85 per cent of estate agents reported an increase in the number of buy to let investors looking to purchase properties, according to data released by the National Association of Estate Agents (NAEA) released [...]
