Posts Tagged ‘Bank of England’

Bank of England must be wary of interest rate rise, says chief economist

Saturday, January 21st, 2017

The Bank of England

Andy Haldane says UK at risk of sharp slowdown as BoE weighs up conflicting forces of inflation from weak pound and the Brexit vote denting confidence. The Bank of England should be wary of rushing into interest rate rises to curb inflation, according to its chief economist, in a warning that the UK economy is vulnerable to a sharper slowdown next year than forecasts would suggest.

Andy Haldane said he was comfortable with the Bank’s current wait-and-see stance on borrowing costs as it weighs up the conflicting forces of a lower pound stoking inflation and the Brexit vote denting business confidence. In a bid to shore up confidence after the referendum, the Bank cut interest rates to a record low of 0.25% in August and expanded its programme of electronic money-printing, known as quantitative easing (QE). It had hinted at another interest rate cut before the end of the year but a flurry of brighter than expected economic news forced the Bank to row back on that guidance. Haldane said on Friday that economic output had outperformed the expectations of the Bank’s monetary policy committee (MPC) back in August while inflation had picked up, largely as a result of the pound’s sharp fall since the referendum, which makes imports to the UK more expensive. “That configuration now leaves me comfortable with the current stance of monetary policy, with no bias on the direction of the next move in interest rates,” he said.

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UK economy is braced for interesting times as Brexit phoney war end

Saturday, November 26th, 2016

Theresa May and Philip Hammond

The four months since the Brexit vote have been something of a phoney war. Life for most has trundled on just as before. The shops have been full. Employment has continued to rise. Britain is still the low pay, low productivity country it always was. If someone had left in early June and returned today without access to the news, they would never know there had been a referendum.

The release of the growth figures for the third quarter of 2016 on Thursday will reinforce the sense that not much has changed.

In August, the Bank of England expected the economy to almost stall but it has had second thoughts in the light of more upbeat data. The consensus in the City is for growth of 0.3-0.4%, down on the second quarter but hardly a disaster.

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UK economy grows 0.5% in three months after Brexit vote

Saturday, November 5th, 2016

GDP graph

The UK’s service sector helped the economy to grow faster than expected in the three months after the Brexit vote, official figures have indicated.

The economy expanded by 0.5% in the July-to-September period, according to the Office for National Statistics.

That was slower than the 0.7% rate in the previous quarter, but stronger than analysts’ estimates of about 0.3%.

“There is little evidence of a pronounced effect in the immediate aftermath of the vote,” the ONS said.

The stronger than expected growth will further dampen expectations that the Bank of England’s Monetary Policy Committee will cut interest rates next week.

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Brexit vote ‘will not dent economy this year’ as UK growth forecasts back to pre-referendum levels

Friday, October 7th, 2016

The UK’s decision to leave the EU will not dent growth at all this year, according to economic forecasts compiled by the Treasury, in a complete reversal of the gloomy short term forecasts made after the EU referendum. Panic has faded rapidly among the dozens of independent economists consulted by the Treasury as strong data in the three months since the vote reassured the analysts that any shock from the vote was far less severe than first feared. Forecasts for 2016’s GDP growth had been chopped to 1.5pc immediately after the 23 June ballot, but economists have reversed those downgrades and now expect growth of 1.8pc – exactly the same as they predicted before the vote. The study of dozens of analysts’ work also shows that forecasters still expect the economy to slow down next year, but they are increasingly revising those forecasts upward. In July the average prediction was for growth of 0.5pc in 2017, but now it almost doubled to 0.9pc – though it remains below the 2.1pc average forecast before the vote.

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Hard Brexit could cost the UK £10bn in lost taxes

Tuesday, October 4th, 2016

philip-hammond-8-2016.jpg

UK banks fear they may lose passporting, or the ability to do business with the whole of the EU in the event of a ‘hard Brexit’ Chancellor Philip Hammond is to present his first budget statement in November, setting out how the government will use tax and spending plans to shore up the UK economy after the vote to leave the EU Getty. A so called “hard Brexit” deal, which would see the UK drifting away from cooperation with the rest of the EU, could cost the UK billions in lost taxes, treasury officials have privately warned. The hardline approach to UK’s vote to leave the EU – favoured by some leading Conservative Eurosceptic ministers – includes leaving the European single market and ending free movement.

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Bank suffers losses over false invoices

Monday, September 26th, 2016

Bank suffers losses over false invoices

A father and daughter duo have been disqualified for a total of 16 years for raising false invoices.

Raj Kumar Thaneja, 57, acted as a company director of electrical goods firm Kingsway Lansdown Limited to raise false invoices to a bank that provided invoice discounting facilities, which resulted in the firm receiving at least £190,630 to which it was not entitled. Company director Ellena Jane Kehoe, 35, was found to have failed to prevent the firm from raising the false invoices. Susan MacLeod, chief investigator at the Insolvency Service, said: “The directors did not run their business in accordance with the terms set out in its agreement with the invoice discount facility provider.“The company obtained money to which it was not entitled by submitting details of sales invoices which did not exist, which caused the provider to incur financial losses. “The directors failed to live up to the expectations of the business community.” Bradford-on-Avon-based Kingsway Lansdown raised at least 26 false invoices between 17th December 2013 and 1stMay 2014, with a total value of £238,287.

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