UK News
Insights from the UK and beyond
from MacroScope:
Show us the money
It says something about the current world that a new economic indicator is about to be unleashed by the Bank of England and it basically tells you whether banks have been doing what they are supposed to do -- lend.
The first Trends in Lending report is due out on April 21 at 0830 GMT. Always nice to have a new indicator, but this one may get a bit more attention than would have been the case a few years ago. It 
is designed to provide up-to-date information about bank lending to households and businesses.
Consumer groups, regulators trade bodies, the BoE, the UK government and lenders themselves will draw up the report under the rubric of something called The Lending Panel -- which a cruel cycnic might say sounds a bit like a high-interest loan shop.
Clearly, the purpose of the report is to show whether banks have been passing on the ultra-low interest rates that the BoE has been handing out. What do you think it will show?
On the frontline of the G20 summit
Abolish money. Punish the looters. Eat the bankers.
Ageing 1960s hippies and their youthful anti-globalisation descendants joined in an angry anti-capitalist protest at the Bank of England on Wednesday, waving placards and shouting slogans reflecting a common fury at perceived corporate greed.
With worldwide recession destroying jobs by the week, protesters at the G20 protest in the City of London demanded an end to what they see as a global, predatory system that robs the poor to benefit the privileged.
The Bank of England enters the political arena
Gordon Brown has not said openly that he plans to turn on the taps again in the budget with another package of spending and tax cuts, but his appeals to world leaders to do just that have led to a widespread feeling that more stimulus is to come.
So Mervyn King’s warning against more spending when debt levels are already so high has predictably been leapt upon by the Conservatives as a powerful message of support for their own position.Â
Can MV=PT solve credit crisis for BoE?
Britain could begin a telling exercise in classical monetary theory on Thursday as the central bank gets set to test a newly minted policy of “quantitative easing”.
In an effort to pump more money into the financial system and encourage banks to get lending again, the Bank of England has been given the green light to basically create more money.
Rate cut round-up: “policy mistake” or “confidence boost”?
The Bank of England’s decision to cut interest rates to a record low of 1.0 percent may have been widely predicted, but this did little to hold back the avalanche of commentary that began the moment the news came through at noon today.
Interest rates, which have now been cut five months in a row, are at the lowest level in the Bank’s 315-year history, and the list of people calling yet another easing pointless appeared to be getting longer.
Are interest rates at one percent the answer?
The Bank of England has gone into further into uncharted territory with its decision to cut rates by half a point to just one percent. Many economists think they will be down to zero by the Spring.
But like gunfighter running out of bullets, the Bank is, in the view of some observers, just wasting ammunition by using the interest rate weapon.
from MacroScope:
A path strewn with difficulties
An old Chinese proverb states that it is better to take many small steps in the right direction than make a giant leap and fall back. Judging by the number of bank lending initiatives announced over the past three months, British policymakers are taking this to heart.
On Monday, Britain announced no fewer than eight measures to kickstart lending in its credit-starved economy. Despite pouring 37 billion pounds of public money into major banks last October and pledging hundreds of billions more in guarantees, the government had to admit it needed to take more credit risk off banks' books.
What other options does the Bank have?
Interest rates have been cut again – to a record low of 1.5 percent. As they get ever closer to zero, the impact of rate cuts will become more and more limited. So what can central banks do to ease the economic pain?
“Quantitative easing”, or what non-economists call “turning on the printing press” is one of the options.
How far will central banks go in 2009?
The year 2008 has been filled with unprecedented events and all-time lows, a financial system overhaul and global turmoil. Could the New Year herald positive re-evaluation and a positive turnaround? And in what has been a year of sleepless nights for many, will a nation steeped in debt start to curb excess?
Rate cuts figured high on the news agenda as banks undertook radical measures to stabilise the economy. Within the space of one week, Britain saw the lowest base rate since the mid-1950s, the ECB took its rate to a two-and-a-half year low, the U.S. Federal Reserve aggressively slashed rates and a 175 point reduction was made by Sweden’s central bank.
The key question remains – will governments run out of weapons to boost the economy in 2009?
Was one point enough?
The Bank of England has cut interest rates by a whole point to 2 percent in response to increasing worries over discouraging data and a looming recession.
This week, the all-important services sector (which makes up three quarters of economic output) recorded its weakest headline index since 1996 and seventh straight month of contraction. Together with dismal news on unemployment and inflation, these surveys confirm that recession is spiralling as we reach the close of 2008.
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The Wall
