UK Economics Correspondent, London
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Jul 22, 2014

UK June public finances show government slipping off target

LONDON (Reuters) – Britain’s public finances showed a bigger than expected deficit in June, continuing a weak start to the tax year and leaving Chancellor George Osborne with a lot of catching up to do to meet his fiscal goals.

The government failed to reduce public borrowing during the first three months of the 2014/15 fiscal year, possibly limiting its ability to offer any tax cuts or other voter-friendly surprises ahead of a national election in May next year.

Jul 21, 2014

UK ultra-long gilts sag after government pension reform

LONDON (Reuters) – Prices of ultra-long British government bonds fell slightly on Monday after the government said more workers than originally planned would be able to cash in pension savings early, potentially reducing demand for long-dated debt.

Britain’s finance ministry said members of some ‘defined-benefit’ pension schemes – who receive a percentage of salary on retirement – would be able to withdraw money from the age of 55, subject to getting independent financial advice.

Jul 21, 2014

Osborne overhauls employee pension schemes, offers more flexibility

LONDON (Reuters) – Chancellor George Osborne published new rules for private pensions on Monday which give retirees greater freedom to spend their savings as they like, fleshing out reforms announced earlier this year that shook the share value of British insurers.

Osborne caught Britain’s pensions industry by surprise in March when he scrapped a rule forcing people to buy an annuity, a financial product which converts a retiree’s pension pot into a guaranteed retirement income.

Jul 21, 2014

UK overhauls employee pension schemes, offers more flexibility

LONDON, July 21 (Reuters) – Britain published new rules for
private pensions on Monday which give retirees greater freedom
to spend their savings as they like, fleshing out reforms
announced earlier this year that shook the share value of
British insurers.

Finance minister George Osborne caught Britain’s pensions
industry by surprise in March when he scrapped a rule forcing
people to buy an annuity, a financial product which converts a
retiree’s pension pot into a guaranteed retirement income.

Jul 17, 2014

Bank of England says some investment funds less liquid than they look

LONDON, July 17 (Reuters) – Investment funds focused on
emerging economies or high-yield debt may be unable to return
investors’ money promptly if turmoil hits markets, the Bank of
England’s financial stability chief warned on Thursday.

Many investment funds promise to redeem investors’ shares
within a day or two. But BoE Deputy Governor Jon Cunliffe said
this may not be realistic when trouble strikes less liquid
markets and droves of investors want to cut their losses.

Jul 15, 2014

Unexpected jump in inflation hammers UK government bonds

LONDON (Reuters) – British government bonds fell sharply on Tuesday after an unexpected jump in inflation, suffering their heaviest losses relative to German debt in more than six months as investors brought forward rate hike bets.

Official figures showed inflation rose to 1.9 percent in June from a four-and-a-half year low of 1.5 percent the month before, far outstripping economists’ forecasts of a modest rise to 1.6 percent.

Jul 15, 2014

Bank of England condemns UK banks’ mis-selling of rate swaps

LONDON, July 15 (Reuters) – The Bank of England said on
Tuesday that British banks had a “dreadful record” on
mis-selling complex interest rate hedging products to small
businesses and warned that it would keep a close eye on them.

Before the financial crisis, many businesses bought the
products to protect against interest rate rises, but ended up
facing crippling costs after the BoE cut rates to a record-low
0.5 percent in March 2009.

Jul 9, 2014

Bank of England likely to lower estimate of unused capacity – Shafik

LONDON, July 9 (Reuters) – The Bank of England is likely to
lower its estimate of the spare capacity in Britain’s economy
next month, incoming BoE Deputy Governor Minouche Shafik said on
Wednesday – a sign that an interest rate rise is approaching.

The Bank has said it is watching spare capacity closely as
it weighs up when to start raising rates from their record low
of 0.5 percent, and that it plans to raise rates before the
unused capacity reaches zero.

Jul 8, 2014

UK sees surprise slump in May factory output

LONDON, July 8 (Reuters) – British factory output suffered
an unexpected slump in May, echoing a similar decline in German
industrial production, according to official data on Tuesday
that raises questions about the pace of the country’s recovery.

Factory output dropped by 1.3 percent in May, its biggest
fall since January 2013 and in sharp contrast to economists’
forecasts for a solid 0.4 percent increase, the Office for
National Statistics (ONS) said.

Jul 3, 2014

BoE’s Cunliffe says rate hike last line of defence as stability tool

LONDON (Reuters) – Raising British interest rates would be an effective but “very blunt” way of tackling risks to financial stability from booming asset prices, deputy Bank of England governor Jon Cunliffe said on Thursday.

British house prices are rising at their fastest rate in nine years – led by a 26 percent increase in London – prompting some speculation that the central bank may need to raise rates to keep them in check.

    • 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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