UK News

Insights from the UK and beyond

from Breakingviews:

BoE’s small-firm stimulus is blueprint for Draghi

By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The euro zone is no longer collapsing, but credit is. The European Central Bank is reportedly considering giving banks cheap loans to stimulate lending. The Bank of England’s so-called Funding for Lending scheme shows that’s tricky, but the euro zone shouldn’t hold back.

The case for looser euro zone monetary policy is growing. Year-on-year, loans to the private sector in October suffered their sharpest decline on record. The region’s capital markets remain fragmented, with companies in stressed countries facing elevated borrowing costs.

One solution could be a so-called “long-term refinancing operation” targeted at small firms, according to Sueddeutsche Zeitung. The precedent is the UK’s FLS, where BoE Governor Mark Carney gives banks four-year, cheap funds if they increase lending.

from MacroScope:

Broadbent’s BoE appointment keeps hawks in health

BRITAIN-BOE/Ben Broadbent’s appointment to the Monetary Policy Committee ought to dispel any notions that the Bank of England would be left short of hawks after the departure of Andrew Sentance.

A brief look at the history of Reuters polls shows that Goldman Sachs' UK economists – led by Broadbent – were uber-hawkish in their outlook for British interest rates early last year.

from MacroScope:

The perils of predicting BoE policy

BRITAIN/As we’ve noted extensively, economists often get it wrong. Leaving aside their collective failure to recognise an impending global recession, you might recall a shock interest rate hike from the Bank of England in January 2007.

This was another event that almost every economist polled by Reuters failed to spot, and there are signs that four years on, economists might be setting themselves up for a similar shock.

from MacroScope:

Slowing growth, MPC splits? That’s so 2008

Sixties nostalgia was all the rage in the late 90s, and towards the end of the last decade we looked back only 20 years or so for a massive 80s revival in electronic pop and fashion.

INDONESIA/With the 2010s in full flow, the current vogue of choice derives from just two years ago – at least among those noted trendsetters, economists.

  •