The future of financial services regulation is a hot topic these days and it’s risen up the agenda thanks to a number of reasons. Most obviously, Brexit has necessitated a major debate about the direction of regulation, with competing voices calling for either robust mutual recognition (favoured by many in the City) or a bold programme of divergence in order to capitalise on the benefits of withdrawal. One unlikely advocate of this latter position is the EU’s former commissioner for financial services, Lord Hill, who told the House of Lords recently that if we’re going to leave we may as well do so with gusto. Another reason why regulation occupies a permanent spotlight is the changing nature of financial services and, specifically, the transformative potential of technology. Read more: Transferwise becomes first non-bank to join Faster Payments Around 60,000 City workers are in fintech – an industry that barely existed a decade ago. London is hoovering up … [Read more...] about The Bank of England moves with the fintech times as Transferwise granted settlement account
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Should the weaker inflation figures stop the Bank of England from raising rates next month? Samuel Tombs, chief UK economist at Pantheon Macroeconomics, says YES. Inflation’s rapid fall to 2.5 per cent in March – well below the MPC’s 2.8 per cent forecast – from 3.0 per cent at the start of this year should ring alarm bells on Threadneedle Street. The monetary policy committee (MPC) has misjudged how quickly inflation would rise and then fall back in response to sterling’s 2016 depreciation. Sterling’s newfound strength suggests that the inflation rate for core goods will keep falling, reducing the headline rate to 2.0 per cent by the end of this year. Domestically-generated inflation, meanwhile, remains dormant. Services inflation was just 2.5 per cent in March, and on its current trend it won’t reach its 3.5 per cent pre-recession norm, required for at-target headline inflation, for another three years. In addition, annualised three-month on … [Read more...] about DEBATE: Should the weaker inflation figures stop the Bank of England from raising rates next month?
Inflation fell in March in a further boost to British households who have suffered a year of real wage falls, but the Bank of England's job may have become trickier, according to economists. Consumer price inflation (CPI) fell by 0.2 percentage points in March to hit 2.7 per cent. The Bank targets two per cent CPI. Read more: Headache for Bank of England as inflation falls to lowest in a year Here's how economists reacted. Former Bank of England monetary policy committee hawk Andrew Sentance, now senior economic adviser at PwC, said ratesetters should hold their course. "Sluggish" productivity growth, wage increases and a "buoyant global economy" are likely to keep inflation above target for the rest of the year, he said. "The Bank of England should not therefore treat this latest fallback in inflation as a dovish signal for interest rate policy. The MPC's approach has normally been to look through short-term fluctuations and focus on the longer term influences on the inflation … [Read more...] about Inflation falls to lowest in a year: Here’s what economists think the Bank of England will do
SMALL rises in interest rates over the next three years will be the ‘new normal’ – that’s the message to residents and businesses from the local representative of the Bank of England. Graeme Chaplin, the Bank of England’s West Midlands Agent, met companies at an event organised by the Coventry and Warwickshire Chamber of Commerce last week. He told the group that, based on current economic conditions and the outlook for CPI inflation, ongoing tightening of monetary policy would be appropriate to return inflation to its two per cent target. Mr Chaplin said: “Rates have been historically low for a sustained period and we are likely to see them increase over the next two to three years.” The event was organised to allow companies from across the area to give their views on the state of the economy and to help provide the Bank of England with feedback on their businesses. Similar sessions are held across the UK and help the Bank to build a … [Read more...] about Small interest rises to come – says the Bank of England
caption Bank of England Governor Mark Carney has a lot to think about. source REUTERS/Peter Macdiarmid The Bank of England hinted that it is set to hike interest rates in May, but there are signs it could change its mind. A rate hike in May is, in the words of bond market guru Mohamed El-Erian “far from a done deal.” The wording of the committee’s statement is far less explicit than that in the Bank of England’s statement in September last year, the meeting prior to its November rate hike. This suggests some reticence to hike on the bank’s part. The make up of the vote of bank’s Monetary Policy Committee also raises concerns. LONDON – As expected, the Bank of England left interest rates on hold on Thursday, but signalled – in the eyes of most commentators and many in the markets – that a rate hike at the next … [Read more...] about 2 reasons why the market is fundamentally misjudging the Bank of England’s next step