UK Economics Correspondent, London
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Jul 3, 2015

Ten-year gilt yields dip below two percent before Greek referendum

LONDON (Reuters) – Ten-year British government bond prices GB10YT=RR rose to a two-week high on Friday as investors piled into safer assets before a referendum which threatens to put Greece on a collision path with its creditors.

Prime Minister Alexis Tsipras said on Friday that the vote would not determine whether Greece stayed in the euro zone, but other European Union politicians said a vote against austerity would leave few options.

Jul 3, 2015

EU rules force Britain to curb protection for savers: lawmaker

LONDON, July 3 (Reuters) – British savers will have less of
their money protected if a bank fails next year, the government
said on Friday, blaming European Union rules which one senior
lawmaker called “absurd”.

Relations between Britain and the EU are already tense.
Prime Minister David Cameron, who is trying to reshape relations
with the 27-member bloc before calling a referendum by the end
of 2017 on whether to stay in, wants to ensure that Britain is
not disadvantaged by not using the euro.

Jul 2, 2015

Conservatives see best chance in 18 years to cut welfare bill

LONDON (Reuters) – Prime Minister David Cameron’s Conservatives have their best chance in almost two decades to remould Britain’s economy next week, in their first budget statement after an unexpectedly decisive election victory.

Freed from needing the support of their former coalition partners, the Liberal Democrats, Conservatives want to reduce borrowing faster this year and set out plans to cut the annual welfare bill by 12 billion pounds ($18.7 billion).

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.

    • 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."
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