UK Economics Correspondent, London
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Jul 1, 2015

Bank of England delves deeper into market illiquidity conundrum

LONDON, July 1 (Reuters) – The Bank of England’s risk
watchdog will extend its focus beyond making banks more stable
to look at the lack of liquidity in fixed-income markets, which
are now braced for more volatility as bonds price in eventual
interest rate rises.

The Bank’s Financial Policy Committee (FPC) said in its
twice-yearly report on Wednesday that some markets had become
less liquid to cope with heavy sell-offs, but the reasons for
this were “not yet well understood”.

Jul 1, 2015

Bank of England says primed for action over Greek crisis

LONDON, July 1 (Reuters) – The Bank of England said on
Wednesday it stood ready to take any action required in response
to Greece’s worsening debt crisis, which could trigger wider
problems on financial markets.

Greece on Tuesday became the first advanced economy to
default on an International Monetary Fund loan after the
government in Athens broke off talks with its creditors and shut
down banks.

Jun 30, 2015

UK economic growth revised up, buoyed by consumer spending

LONDON (Reuters) – Britain’s economy enjoyed a stronger start to the year than previously thought, buoyed by big-spending consumers and an upturn in business investment, but weak exports continued to act as a drag on growth.

New official data on Tuesday showed that over the past year, British households have seen a bigger boost to disposable income than at any time since 2001, as wages started to pick up and inflation fell toward its lowest in more than 50 years.

Jun 29, 2015

Deepening Greek crisis gives UK bonds biggest boost in months

LONDON (Reuters) – British government bonds enjoyed their biggest one-day gains in months on Monday, bouncing off the previous week’s lows after investors were caught out by an unexpected deepening in Greece’s debt crisis over the weekend.

Two-year gilt prices recorded their biggest rise in eight months, while benchmark 10-year British government bonds rebounded from a seven-month low, pushing yields 12 basis points lower on the day to 2.07 percent.

Jun 29, 2015

Bank of England chief economist urges against ‘early lift off’ for rates

LONDON (Reuters) – The Bank of England should steer clear of an early interest rate hike, and is as likely to cut rates as to raise them in future, its chief economist has said.

Andy Haldane said recent strong wage data had not changed his view from earlier in the year about the dangers of tightening policy too soon, adding that a drag on growth from sterling strength could outweigh the gains from higher wages.

Jun 25, 2015

EU treaty change would be slow, German minister warns UK’s Cameron

LONDON (Reuters) – Prime Minister David Cameron’s plan to change the European Union’s treaties would take a long time but he could achieve “substantial” reforms to Britain’s relationship without it, Germany’s Europe minister said on Thursday.

Cameron has promised to renegotiate Britain’s relationship with the bloc ahead of a membership referendum by the end of 2017 and has said he believes treaty change will be needed to achieve some of his planned reforms.

Jun 24, 2015

UK debt agency head sees higher chance of failed bond auction

LONDON (Reuters) – Britain is at increased risk of failing to find enough buyers at a government bond auction due to big day-to-day swings in market prices, the man responsible for selling the country’s debt said on Wednesday.

Robert Stheeman, chief executive of the UK Debt Management Office, told Reuters’ online Global Markets Forum that underlying demand for gilts remained strong. But the chances of a significant mismatch between buyers and sellers on a given day had risen as low liquidity was now a genuine problem.

Jun 22, 2015

U.S. and EU face ‘heavy lift’ to get trade deal: EU ambassador

LONDON (Reuters) – The United States and the European Union face a major challenge to achieve a free trade deal before President Barack Obama’s term of office ends in January 2017, the EU’s ambassador to the United States said on Monday.

Doubts have been growing among EU officials about whether a trade deal can be achieved given the United States’ current focus on a trade deal with Pacific nations and deep splits within the European Parliament in Brussels.

Jun 20, 2015

Osborne vows hefty welfare cuts in July budget plan

LONDON (Reuters) – Chancellor George Osborne has said he will press ahead with hefty cuts to welfare in a budget statement next month, a day after tens of thousands of people marched against austerity in central London.

Writing in the Sunday Times, Osborne and welfare minister Iain Duncan Smith said the newly re-elected Conservative government would go ahead with plans to cut welfare spending by 12 billion pounds, out of an annual budget of 220 billion pounds, including old-age pensions.

Jun 20, 2015

UK finance minister vows hefty welfare cuts in July budget plan

LONDON, June 21 (Reuters) – British finance minister George
Osborne has said he will press ahead with hefty cuts to welfare
in a budget statement next month, a day after tens of thousands
of people marched against austerity in central London.

Writing in the Sunday Times, Osborne and welfare minister
Iain Duncan Smith said the newly re-elected Conservative
government would go ahead with plans to cut welfare spending by
12 billion pounds ($19 billion), out of an annual budget of 220
billion pounds, including old-age pensions.

    • 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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