UK Economics Correspondent, London
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Apr 17, 2014

Fed bond buying twice as effective on growth as BoE’s – research

LONDON, April 17 (Reuters) – Bond purchases by the U.S.
Federal Reserve have been twice as effective at boosting
economic output as those by the Bank of England, research by a
BoE policymaker showed on Thursday.

The findings are likely to be of interest to the European
Central Bank, which is weighing whether to start an asset
purchase programme in the euro zone to ward off the threat of
deflation.

Apr 15, 2014

UK inflation hits new four-year low, house prices continue rise

LONDON (Reuters) – British inflation fell to its lowest in over four years in March, easing pressure on living standards and raising the prospect that prices may now be rising by less than wages for the first time in years.

The sharp decline in Britons’ living standards since the financial crisis – due to a mix of tax rises, high inflation and meager wage growth – has become a key political battle ground, a year before national elections.

Apr 13, 2014

Long-delayed new town an emblem for UK’s housing hole

EBBSFLEET, England (Reuters) – Where Britain’s first new town in over 40 years is due to be built there is little more than a gaping hole – a symbol of the huge housing shortage successive governments have failed to fill.

For almost 10 years the project has languished, first as developers worried about its scale and then as the financial crisis hammered the construction industry.

Apr 10, 2014

Scottish independence would delay UK return to triple-A status: Fitch

LONDON (Reuters) – The United Kingdom would need longer to recover the triple-A debt rating it lost last year if Scotland votes for independence in September, ratings agency Fitch said on Thursday.

Fitch said London’s promise to honor all existing United Kingdom debt in the event of independence and seek recompense from the new Edinburgh government would raise the United Kingdom’s debt burden as a share of gross domestic product by almost 10 percentage points.

Apr 4, 2014

ECB models trillion euro asset purchase program: newspaper

CERNOBBIO, Italy/FRANKFURT (Reuters) – The European Central Bank has modelled the effects of buying a trillion Euros of assets to ward off deflation, a German newspaper reported on Friday, a day after the ECB’s president said radical policy action might be needed.

ECB President Mario Draghi said on Thursday the central bank had achieved unanimity that asset purchases, also known as quantitative easing, might be needed to tackle inflation if it proved persistently low.

Apr 4, 2014

G20 summits have “limited relevance” for markets – ECB research

FRANKFURT, April 4 (Reuters) – Regular meetings of the
world’s leaders and central bankers have little short-term
impact on financial markets, despite extensive media coverage,
according to research published by the European Central Bank on
Friday.

ECB researchers looked at how the price of shares and bonds
changed after meetings of the Group of 20 (G20) between November
2007 and September 2013 – a time when the body was at the heart
of global efforts to lessen the impact of the financial crisis.

Apr 3, 2014

ECB says ready to act if “lowflation” lingers too long

FRANKFURT (Reuters) – The European Central Bank is ready to deploy anything in its monetary policy toolbox if inflation stays too low for too long despite keeping interest rates steady on Thursday, its president said.

The ECB held its main interest rate at a record low of 0.25 percent and the rate for bank deposits at central banks at zero,

Apr 3, 2014

ECB holds course in face of deflation fears

FRANKFURT (Reuters) – The European Central Bank kept interest rates steady on Thursday despite a fall in inflation to its lowest in more than four years, counting on the euro zone recovery to gain strength unaided.

The ECB held its main interest rate at a record low of 0.25 percent and the rate for bank deposits at central banks at zero, refraining from taking more drastic measures in the face of fears that the euro zone could slip into deflation.

Apr 2, 2014

ECB set to hold course in face of deflation fears

FRANKFURT, April 3 (Reuters) – The European Central Bank
looks set to keep interest rates steady and offer no new aid to
the euro zone’s fragile recovery on Thursday despite a fall in
inflation to its lowest in more than four years.

Policymakers have been willing in recent weeks to publicly
broach cutting deposit rates below zero – effectively charging
banks to hold cash with the ECB – or embarking on bond purchases
as the United States, Japan and Britain have.

Mar 27, 2014

Bank of England readies tools to rein in risky mortgage lending

LONDON (Reuters) – The Bank of England urged banks on Thursday to consider the risk of future spikes in interest rates when they approve mortgages, and prepared tools to rein back potentially dangerous lending.

British house prices have risen by around 10 percent over the past year, and the central bank said mortgages were higher as a share of home-buyers’ income than at any point since 2005, although other indicators remained weaker than average.

    • About David

      "David keeps a close watch on the UK economy, the Bank of England and the British government debt market. Previously he worked in Frankfurt, covering the European Central Bank and euro zone economy, and in Brussels where he reported on everything from EU summits to Belgian supermarkets."
      Languages:
      English, French, German
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