Surprise weakness in June lending despite growth July 29, 2013 LENDING figures for June dipped below expectations yesterday, with a smaller rise in consumer credit than expected, despite the fledgling recovery indicated by recent growth. The Bank of England recorded a £489m increase in consumer credit, compared to £781m of additional lending in May. The average monthly rise in 2013 has been around £700m, suggesting [...]
We need to break our unsecured banking system out of its Victorian past July 29, 2013 THE UNSECURED nature of the UK banking system has long troubled both me and my company, and we have discussed the situation with the Bank of England on several occassions. Concerns over bank capital positions have also recently been reignited. Barclays, which releases its half-year results today, is one of the banks identified by the [...]
UK lending misses expectations July 29, 2013 The Bank of England released three key pieces of data this morning, and it's not looking good. First, consumer credit was £489m in June, the smallest rise since January, and down from an upwardly revised £781m in May. Economists had expected to see net growth of £700m. Meanwhile, mortgage approvals fell unexpectedly to 57,667, after [...]
Before the open – 29/07 – Asian stocks down, FTSE seen opening higher July 29, 2013 Asian stocks traded lower last night as weak Chinese manufacturing data heightened fears of a hard landing and investors showed caution ahead of the US Federal Open Market Committee (FOMC) policy statement later this week. The Nikkei fell below the 14,000 mark for the first time in nearly a month as the yen strengthened against [...]
Global bond bubble will cripple all investors when it bursts July 28, 2013 THIS column has long highlighted the massive bubble in the global bond markets and the horrific, systemic risk it poses to the global recovery and financial system. A combination of ultra-low central bank short-term interest rates, massive amounts of quantitative easing (QE), regulatory-driven purchases of government bonds by financial institutions and Asian forex accumulation have [...]
London Report: UK’s corporate calendar packed in results season July 28, 2013 THE CORPORATE calendar is packed this week, as businesses including ITV, BP, Lloyds, Barclays and Royal Bank of Scotland update the market amid a swathe of other results. The week begins with figures from Fidessa Group, Hammerson, InterContinental Hotels Group, Intertek Group, JKX Oil & Gas, Keller Group, Senior, Vernalis, Reckitt Benckiser Group, National Grid, [...]
How an ageing Britain can grow old and avoid a looming longevity crisis July 23, 2013 BRITAIN’s future is getting greyer. In its most recent fiscal sustainability report, the Office of Budget Responsibility recognised that we are living longer and need more care. But we haven’t saved enough. The state won’t be able to keep us, and the dependency ratio will only worsen as fewer workers struggle to fund more pensioners. [...]
The retail funding myth – why the investment banks aren’t to blame June 24, 2013 BANKS used retail deposits to gamble on the investment banking casino!” That is the common perception of the cause behind the 2007-2008 financial crisis. The popular belief is that retail deposits, instead of being used to fund “safe” traditional retail lending like mortgages, were used to fund high-risk derivatives trading on the international capital markets. [...]
Funding for Lending isn’t working: Why the Bank is missing the point April 29, 2013 IN THE debate about why Britain’s monetary policy is not working, there has been too much focus on whether the Bank of England should buy more government bonds or move to negative interest rates. Both miss the point. The primary reason monetary policy is not working is that the transmission mechanism is broken. There is [...]
Liberalise planning and housebuilding can revive growth April 27, 2013 THE UK economy has avoided a triple-dip recession, but recovery is proving elusive. GDP is still 2.6 per cent below its pre-crisis peak and only 0.4 per cent greater than in the third quarter of 2011. Some sectors remain very depressed – most obviously construction, where output is 18 per cent down from its peak. [...]