Thank competition – not magical central bankers – for years of moderate inflation October 18, 2016 Tempers are fraying at the highest levels of economic policy-making in the UK. Theresa May, at the Conservative Party conference, emphasised the “bad side effects” for savers of the Bank of England’s policy of near-zero interest rates, a position reinforced by former Tory leader William Hague in the Telegraph this week. A few days ago, Mark [...]
Sterling and FTSE 100 jump as inflation hits two-year high October 18, 2016 Sterling recovered some poise today, soaring higher after inflation jumped to a two-year high. The FTSE 100 also jumped back above 7,000 in early morning trading, fading only slightly to end the day up 0.7 per cent at 6,994 as traders and investors digested the news that prices rose by one per cent in the year to [...]
Inflation surges to two-year high as economists warn of huge price hikes October 18, 2016 Prices are rising at their fastest pace in nearly two years as sterling's dramatic post-referendum demise looks set to bite consumers over the coming months. Inflation came in at one per cent in September on the consumer prices index (CPI), the Office for National Statistics (ONS) declared this morning – a big leap from the 0.6 per [...]
Government’s Brexit dance is maiming the pound October 18, 2016 Inflation is coming to eat the pound in your pocket. Today, data for September is expected to show that prices in the UK rose by an annual 0.9 per cent rate, up from 0.6 per cent in August, driven by energy and food prices. However, the full impact of the recent plunge in sterling will [...]
Sterling steady as rift opens between Philip Hammond and hard Brexiters October 17, 2016 The weekend may have brought some welcome respite for currency traders after a frantic few weeks of selling and shorting, but the break still hasn't done sterling any good. It's as-you-were on the money markets today with the pound falling shy of $1.22 against the US dollar and €1.11 against the single currency. At lunchtime one pound [...]
Hard Brexit or soft Brexit, does it matter? October 17, 2016 So is it going to be a “hard” or a “soft” Brexit? Since our new Prime Minister began to lay out her Brexit negotiating stance this question has become a persistent preoccupation, particularly in business circles. To consider the answer we need to separate the politics of hard and soft, from the financial and stock [...]
Ben Broadbent: Pound fall has been a “shock absorber” October 17, 2016 The decline in sterling after the UK voted to leave the European Union has acted as a shock absorber for the economy, according to Bank of England deputy governor Ben Broadbent. "Having a flexible currency is an extremely important thing, especially in an environment when your economy faces shocks that are different from your trading [...]
Downing Street plays down talk of Mark Carney tension October 17, 2016 Downing Street appears keen to play down perceived tension between the Prime Minister and governor of the Bank of England, with allies saying he is "highly regarded". The Bank’s Mark Carney said in a speech on Friday that he would not be told what to do by politicians, adding: Read more: May you leave us [...]
Let Nicola Sturgeon have her referendum – and find out that a Hard Brexit is better than a Hard Independence October 17, 2016 It could not have been staged better. Like a general on the battlefield making a final appeal to her troops, Nicola Sturgeon’s use of the SNP’s annual conference to announce the publication of a draft bill to pave the way for Indy Ref Two could not be matched. The legions cheered, ready to go over the top [...]
As Mark Carney warns of troubles ahead, should the Bank of England tolerate rising inflation? October 17, 2016 Scott Corfe, associate director at the Centre for Economics and Business Research, says Yes. Inflation will rise next year, and it is likely to rise sharply as sterling’s remarkable decline feeds through into higher import costs. CPI inflation of 3 per cent is well within the realms of possibility and inflation of 4 per cent – [...]