City braced for end of £65bn Bank of England bond market package October 13, 2022 The City is bracing for the Bank of England to pull its £65bn emergency support package for the bond market tomorrow, but experts said volatility could be tamed by existing backstops supporting the pensions industry. Britain’s debt market has been rocked by concerns over the government’s financial credibility after it launched £43bn of tax cuts [...]
US inflation tops expectations in sign Federal Reserve has more work to do October 13, 2022 US inflation climbed higher than expected on a monthly basis in September in a sign the Federal Reserve’s series of steep rate hikes are failing to tame the toughest price pressures. Inflation hit 0.4 per cent last month, above Wall Street’s expectations of a 0.2 per cent increase and higher than August’s print, figures from [...]
The Inflation Game: War, Peace and the Perils of Central Banking October 13, 2022 | City Talk The descent is always more sudden than the increase; a balloon that has been punctured does not deflate in an orderly way. — John Kenneth Galbraith I travelled with my family to London and Normandy in July 2022. Our primary purpose was to meet up in France with my father-in-law, who had dreamed of visiting the [...]
Another Andrew Bailey misstep was the last thing markets needed October 12, 2022 Andrew Bailey’s tenure as Bank of England governor has not been a happy one. Marked first by the pandemic, it has been defined by rising prices, an economic slowdown and now a crisis of sorts in financial markets. Amidst all of this, the one thing the City would look for would be reliable and consistent [...]
Bank of England warns of ‘severe risks’ to market stability and financial crisis debt levels October 12, 2022 The Bank of England’s emergency £65bn bond buying scheme – that its chief Andrew Bailey last night confirmed will end on Friday – has been fighting “severe risks” to UK financial stability, the central bank said today. Turmoil in UK gilt markets since the government’s mini budget threatened to trigger “an excessive and sudden tightening [...]
UK economy on recession cliff edge as GDP unexpectedly shrinks October 12, 2022 The UK is staring over a recession cliff edge, caused by soaring inflation and rising interest rates, that will be lengthened by turmoil in financial markets, official figures published today revealed. The economy unexpectedly shrank 0.3 per cent over the month to August, according to the Office for National Statistics (ONS). Economists had expected gross [...]
London’s FTSE 100 pulled down by pension managers after more BoE bond support October 11, 2022 London’s FTSE 100 today was pulled down by the UK’s largest money managers dropping after the Bank of England stepped up its support for the bond market again. The capital’s premier index dropped 1.06 per cent to 6,885.23 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the [...]
Bank of England steps up bond market support again to tame ‘risk to financial stability’ October 11, 2022 The Bank of England today stepped up its emergency bond buying scheme to tackle “a material risk to UK financial stability”. It is the second time in as many days the Bank has ramped up support for the UK bond market, underscoring the scale of volatility it is grappling with. The monetary authority led by [...]
UK headed for stagnation on worst inflation crisis in G7, IMF warns October 11, 2022 A historic hit to Brits’ living standards from roaring inflation and rising interest rates has thrown the UK economy on course to stagnation, the world’s lender of last resort warned today. The UK economy will grow a better than expected 3.6 per cent this year, according to the International Monetary Fund’s (IMF) latest World Economic [...]
Bank of England urged to extend emergency action to manage market volatility October 11, 2022 A pensions industry body is urging the Bank of England to extend its emergency action to calm the markets and to manage volatility. After the Bank made fresh moves, widening the scope of its bond-buying programme, the Pensions and Lifetime Savings Association (PLSA) said a “key concern” of pension funds had been that the period [...]