Q: As Mark Carney expresses concern over lending to landlords, should we be worried about the buy-to-let boom? December 16, 2015 Simon French is chief economist at Panmure Gordon, says Yes The growth of the buy-to-let sector has increased the amount of flighty investment capital in the UK property market, posing a direct risk to financial stability. Any downturn in sentiment towards property as an asset has the potential to be amplified by buy-to-let investors withdrawing [...]
Here’s how the Federal Reserve’s interest rate hike could impact the world economy December 16, 2015 As the Federal Reserve raised interest rates today, here's how economists think the US policy tightening will impact the world economy: Latin America Central Banks in Latin America are likely to begin hiking rates in response, according to Ian Shepherdson at Pantheon Macroeconomics. The Brazilian real has fallen 32 per cent against the US dollar this year, [...]
Fed rate hike: What you need to know about ahead of Janet Yellen’s big decision on US interest rates, from why it’s important to when it’s announced December 16, 2015 The world is waiting on tenterhooks for the outcome of the Federal Reserve’s monetary policy meeting, with the US central bank widely expected to announce its first interest rate hike in nearly a decade tonight. Barring “unanticipated shocks”, Fed members are expected to vote to lift rates by quarter to half a percentage point from their current historic low. After [...]
The Bank of England will look for an all clear from the US Federal Reserve’s interest rate decision December 16, 2015 When the United States Federal Reserve finally raises its benchmark interest rate after seven long years at zero, no central bank will be watching what happens more carefully than the Bank of England (BoE). After all, the cyclical similarities between the UK and US mean markets will be looking to BoE as the next central bank [...]
The City is a litmus test for PM’s European Union renegotiation December 16, 2015 David Cameron heads for Brussels tomorrow with a significant weight on his shoulders. The Prime Minister knows that it’s a crucial point in his efforts to renegotiate Britain’s relationship with the EU – and then, subsequently, to convince the British public that he’s done enough for them to vote “Remain”. You may see a lot [...]
Fed rate hike decision: What’s expected to change, what it means, and how it will impact your investments December 16, 2015 The world is watching the US central bank, the Federal Reserve, as experts think it will finally raise interest rates from their record lows today.. The Federal Reserve’s main interest rate was cut to 0.25 per cent in December 2008, the depths of the financial crisis. It has stayed there since. It was an [...]
Bank of England warns EU bonus cap has increased risk of instability in the financial sector December 16, 2015 The EU bonus cap has increased the risk of instability in the financial sector, Bank of England researchers said yesterday. Chancellor George Osborne is being urged to press the EU on removing rules capping bankers’ bonuses after the Bank called the policy “counterproductive”. The Bank said that the cap, which restricts bonuses to 100 per cent of [...]
With consumer price index inflation inching up to 0.1 per cent, could the period of persistently low inflation be about to end? December 15, 2015 Kallum Pickering, senior UK economist at Berenberg, says Yes Falling oil prices and sterling appreciation have exerted strong but temporary effects on headline inflation, bringing it to zero for most of 2015. But even if there is more disinflationary pressure to come from oil in the near term, prices cannot fall forever. Eventually, the oil [...]
MPs pile pressure on the accounting watchdog and KPMG over HBOS failures December 15, 2015 An influential group of MPs have renewed calls for the accounting industry watchdog to investigate KPMG’s role in the collapse of HBOS. Steve Baker MP, a member of the Treasury select committee, called the auditing of banks by accountancy firms around 2008 “the great uncovered scandal of the financial crisis”. In last month’s report into [...]
Top regulator Andrew Bailey writes to challenger banks over Basel Committee buy-to-let capital requirement proposals December 15, 2015 A top City regulator has taken new steps to reassure Britain’s challenger banks about capital requirements ahead of a meeting today between bank bosses and Treasury officials. In a letter sent to challenger bank bosses today, Prudential Regulation Authority (PRA) chief executive Andrew Bailey said that smaller lenders should not be overly worried about the [...]