Brexit hit to operations expected by institutional investors but they will continue to hold UK assets, according to “Brexometer” January 19, 2017 Big institutional investors think Brexit will change their operating models but are determined to hold on to UK assets despite fears of a slowdown, according to a new survey. Of the institutional investors surveyed by State Street for its new “Brexometer” poll, 80 per cent expect Brexit to impact their operations, as the UK faces [...]
Hold: The ECB keeps interest rates and QE purchases steady as Mario Draghi defends loose policy from hawkish critics January 19, 2017 The European Central Bank (ECB) has kept interest rates constant and made no changes to its quantitative easing programme, despite growing pressure to remove its historically high rates of monetary stimulus. The ECB’s rate-setting governing council kept its three main interest rates at the same levels since March 2016, when they were cut further in [...]
What to watch when the European Central Bank reveals its latest monetary policy decision January 19, 2017 After Janet Yellen gave a surprisingly hawkish speech to San Francisco’s Commonwealth Club last night, today’s turn in the monetary policy spotlight belongs to Mario Draghi. The Governing Council of the European Central Bank (ECB) meets today at its Frankfurt headquarters to discuss its three interest rates (currently near zero) and its controversial asset purchase [...]
The Brexit I love versus the Brexit I fear: A British renaissance or a missed opportunity January 19, 2017 What will the UK economy look like outside the EU, 10 years from now? Nobody knows the precise answer to this question but we can generate likely potential scenarios. What follows are two scenarios, the Brexit I love and the Brexit I fear. The Brexit I love is where the UK is open to the [...]
President Trump should be positive for the UK economy – in the short term at least January 19, 2017 When the US electorate chose Donald Trump as their next President, they voted for a big break from the liberal consensus which Hillary Clinton epitomised. Globalisation had not served Trump supporters well, and they wanted something radically different. We are now beginning to get more of a taste of what this might be. Some of [...]
After wages grew faster than expected in the three months to November, is the UK economy overheating? January 19, 2017 Charles Dumas, chairman and chief economist at Lombard Street Research, says Yes. The 2016 British economy was at or above its potential, with no slack. Official estimates of a little slack ignore domestically generated inflation picking up fast. If you impose a 15 per cent devaluation on an economy already fully employed, you do not [...]
UK wages grow at fastest rate since September 2015, while unemployment rate retains 11-year low January 18, 2017 Wages grew faster than expected at the end of 2016, while unemployment stayed steady at 4.8 per cent, as the UK labour market showed little sign of any short-term Brexit effect. Weekly pay grew by an annual rate of 2.8 per cent including bonuses from September to November, according to the Office for National Statistics. [...]
US inflation breaks above two per cent for first time since 2014 January 18, 2017 Inflation in the US broke through the Federal Reserve's two per cent target in December for the first time since 2014, strengthening the case for a rise in interest rates over the coming year. Consumer prices rose by an annual rate of 2.1 per cent in December, after inflation of 1.7 per cent the month before, [...]
Higher inflation boosts ECB hawks’ case for tightening ahead of monetary policy meeting January 18, 2017 Inflation in the Eurozone rose sharply in December, the European Commission has confirmed, adding further to pressure on the European Central Bank (ECB) to begin withdrawing its historically expansive monetary policy support on Thursday. Consumer prices across the bloc increased by 1.1 per cent, a steep rise from the 0.6 per cent growth recorded the [...]
The nightmarish state of the public finances makes NHS reform even more urgent January 18, 2017 While Westminster was awaiting the first lines of Theresa May’s Brexit speech yesterday morning, the government’s fiscal watchdog issued a devastating judgement on the long-term health of the country’s finances. According to the Office for Budget Responsibility (OBR), the accelerating cost of the NHS will double the national debt relative to GDP by the middle [...]
