UK Economics Correspondent, London
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Jul 30, 2015

Edging towards rate hike, BoE sets out money market reform plan

LONDON, July 30 (Reuters) – The Bank of England set out
plans on Thursday to reform a key benchmark for interbank
borrowing costs, a measure of financial conditions that will
come into sharper focus as the central bank comes closer to its
first interest rate increase in nearly a decade.

The BoE said it would broaden the data it collects on
overnight lending between companies, as part of its effort to
make the Sterling Overnight Index Average (SONIA) more
representative of the money market when the central bank becomes
sole administrator next year.

Jul 29, 2015

New Bank of England rate-setter to keep interest in hedge fund

LONDON, July 29 (Reuters) – New Bank of England policymaker
Gertjan Vlieghe will retain a financial interest in one of the
world’s biggest hedge fund firms while he sets interest rates,
an arrangement which Britain’s finance ministry said posed no
conflict of interest.

Some economists privately expressed surprise when the
ministry said on Tuesday that Vlieghe, who joins the Monetary
Policy Committee on Sept. 1, would still receive income from his
current employer, Brevan Howard, whose traders bet on rate
moves.

Jul 28, 2015

Britain’s economy bounces back, despite currency hit to exporters

LONDON (Reuters) – British economic growth got back on track in the second quarter but the strength of the pound hurt manufacturers, putting the Bank of England in a tricky spot as it gets closer to raising interest rates.

The economy grew by 0.7 percent in the three months to June, the Office for National Statistics said on Tuesday, in line with forecasts and above the long-run average. It followed an unexpected slowdown to 0.4 percent in the first three months of 2015.

Jul 23, 2015

Economists say fundamentals strong despite British retail sales dip

LONDON, July 23 (Reuters) – British retail sales suffered an
unexpected dip last month, wrong-footing economists who said
rising wages and lower prices still pointed to strong prospects
for consumer spending, a mainstay of the country’s growth.

Sterling slid half a cent against the dollar after the
Office for National Statistics reported a 0.2 percent fall in
June retail sales on Thursday, prompting traders to reconsider
bets on a Bank of England rate rise before the end of the year.

Jul 22, 2015

Bank of England minutes show some rate-setters edging towards hike

LONDON, July 22 (Reuters) – A number of Bank of England
rate-setters are moving towards voting for the first increase in
borrowing costs in over eight years, adding to expectations of a
split among policymakers in August.

All nine members of the BoE’s Monetary Policy Committee
voted on July 8 to leave rates at a record low of 0.5 percent,
as they have done since January, minutes of the meeting showed
on Wednesday.

Jul 21, 2015

UK’s Osborne tightens screws on government spending plans

LONDON (Reuters) – Britain’s finance minister George Osborne launched a new front in his austerity push on Tuesday as he challenged some government departments to find spending cuts of up to 40 percent by the end of the decade.

Osborne said he would announce on Nov. 25 how he would find an extra 20 billion pounds ($31 billion) of annual departmental savings, on top of deep cuts to welfare spending that he unveiled earlier this month in a post-election budget.

Jul 14, 2015

Bank of England’s Carney says time for rate hike moving closer

LONDON, July 14 (Reuters) – Bank of England Governor Mark
Carney said on Tuesday that the time for a first British
interest rate hike since the financial crisis was getting closer
as economic recovery gathers momentum.

Speaking to British lawmakers for the first time since May’s
national election, Carney said households should start to
prepare for higher borrowing costs, though the central bank
would only raise rates slowly.

Jul 10, 2015

UK’s minimum wage boost will not bring riches for all

LONDON (Reuters) – Conservative politicians cheered and pumped their fists on Wednesday when Chancellor George Osborne announced a bumper increase in the minimum wage, but the economic gains from the change are likely to be much more muted.

The plan to raise the minimum wage by 40 percent by 2020 was the surprise of Osborne’s first budget since the Conservative Party won an unexpected outright victory at May’s election.

Jul 9, 2015

Analysis – UK’s minimum wage boost will not bring riches for all

LONDON (Reuters) – Britain’s Conservative politicians cheered and pumped their fists on Wednesday when finance minister George Osborne announced a bumper increase in the minimum wage, but the economic gains from the change are likely to be much more muted.

The plan to raise the minimum wage by 40 percent by 2020 was the surprise of Osborne’s first budget since the Conservative Party won an unexpected outright victory at May’s election.

Jul 9, 2015

Demand for UK debt could move from ‘feast to famine’ – DMO

LONDON (Reuters) – Strong demand at recent British government bond auctions has not ended the risk of investors temporarily losing their appetite for new debt, the man responsible for financing Britain’s budget deficit said on Wednesday.

The chief executive of the UK Debt Management Office, Robert Stheeman, told Reuters he stood by comments he made last month about the increased risk of a first failed bond auction since 2009, despite a surge in investor appetite at recent sales.

    • 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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