Bank of England’s Sir Jon Cunliffe pours cold water on recession and stagnation fears February 24, 2016 The UK can expect the economy to "grow solidly" and inflation to reach its two per cent target over the next few years, a Bank of England rate setter said today. Sir Jon Cunliffe told an audience at the London South Bank University Centre for International Business Studies: My central projection remains that the UK economy will continue [...]
US service sector contracts for first time in over two years – Markit PMI February 24, 2016 The US service sector contracted this month, according to survey figures released today. Markit's flash services purchasing managers' index (PMI) – compiled from a survey of businesses – dropped to a score of 49.8. Because the score is below 50 it implies the service sector contracted this month. It is the PMI's lowest score for 28 months. [...]
Retailers scaling back investment plans as sales expectations hit lowest since 2013 – CBI February 24, 2016 Retailers are scaling back investment plans after weak sales growth as expectations of sales weaken. The sales balance from the Confederation of British Industry's (CBI) distributive trades survey published this morning dropped to 10 points in February from 16 in January. Expectations of sales for the next month are at their lowest since May 2013. Investment intentions for [...]
House prices to climb further as mortgage lending hits highest level since 2008 in January February 24, 2016 Mortgage lending spiked in January, raising concerns that UK house prices could rise even faster. Borrowing topped £13.6bn, 38 per cent higher than the same month last year and the highest since mid-2008, figures released this morning by the British Bankers' Association (BBA) show. The number of mortgage approvals was up 38 per cent on the year. [...]
What is helicopter money and could it save the global economy from another recession? February 24, 2016 Inflation is below target in most of the world's major developed economies. With interest rates at record lows and economists still split on the effects of quantitative easing, helicopter money has been touted as a possible weapon in central banks' arsenals. The idea The 18th century philosopher David Hume asked what would happen if some good fairy went around [...]
Top European regulator Daniele Nouy warns low interest rates could push banks into riskier investments February 23, 2016 Subdued profitability caused by low interest rates could push banks toward riskier activities, a top European regulator has warned. “Low profitability is obviously a major concern for the stockholders of banks. And it is also a concern for supervisors. Over the long term, low profitability threatens the ability of banks to generate capital and access [...]
Mark Carney tells MPs the Bank of England is not prepared to cut interest rates into negative territory…for now February 23, 2016 Bank of England governor Mark Carney has said the Bank does not yet consider negative interest rates to be an appropriate stimulus measure for the UK. He said the Bank would consider lowering rates below the current record low of 0.5 per cent if necessary, but they would be unlikely to go below zero. "One of the things [...]
Bank of England’s Minouche Shafik and Martin Weale expect interest rates to go up sooner than financial markets are expecting February 23, 2016 Interest rates are likely to go up sooner and faster than is currently implied by a gauge of financial market expectations, two Bank of England rate setters have said today. Monetary policy committee member Minouche Shafik said rates would increase faster than implied by the market yield curve. The market yield curve currently points to the first rate [...]
Fears over German economic growth after sharp drop in business confidence February 23, 2016 German sentiment on the economy has taken a sharp tumble to its lowest value for over a year, data released this morning reveals. The IFO business climate index for German industry and trade dropped to a score of 105.7 in February from January's 107.3. It is the lowest score since December 2013. The index was dragged [...]
Manufacturers’ disappointing start to 2016 continues in February February 22, 2016 Manufacturers' disappointing start to the year continued this month, according to survey figures released this morning. The Confederation of British Industry's (CBI) headline total orders balance drooped to a score of minus 17 in February from minus 15 in January. The long run average of the total orders balance is minus 15. However, the survey of 497 [...]