Bank of England staff strike for first time in 50 years

(VOVworld) - Brexit is no longer the biggest risk to the UK financial system, Bank of England (BoE) Governor Mark Carney declared on Wednesday in front of the House of Commons Treasury Select Committee. Carney said the BoE has taken steps to reduce the negative impacts of Brexit on UK markets. He warned policy makers that the EU faces greater financial risks from Brexit than Britain does. His statement contradicted the BoE’s previous opinion back in June that Brexit would be the biggest risk to UK financial stability, which sends the pound sterling to the 3-month low.... [read more]

Sir David Clementi, a former Deputy Governor of the Bank of England David Clementi, has been appointed as the British Broadcasting Corporation - BBC’s new Chairman. In a statement, Karen Bradley, the Secretary of Culture, said Sir David would “provide the strong leadership necessary for the BBC to remain the world’s best broadcaster.” Clementi said: "The BBC is a world class broadcaster and one of the UK’s most beloved and cherished institutions. It would be a great honour to join the BBC at an important time in the organisation’s history." The new position has been created as a result of the BBC’s new unitary board being created to replace the BBC Trust from April 1st, 2016. Clementi played an important role in the last two years, reviewing BBC's policies and making recommendations about possible changes./. Compiled by BTA... [read more]

LONDON: Brexit will spark an economic slowdown and ravage public finances, forcing a multi-billion-pound spike in state borrowing over the next five years, a gloomy mini-budget revealed on Wednesday (Nov 23). Britain is predicted to borrow an extra £122 billion (US$152 billion) in the period to 2021, according to official forecasts from the Office for Budget Responsibility. About half of that budget black hole - or £58.7 billion - is a direct consequence of Britain's decision to leave the European Union, according to the OBR, which blamed factors including lower migration, slower productivity growth and higher inflation. The nation's EU exit vote will "change the course of Britain's history", finance minister Philip Hammond told parliament in the government's first budget statement since the shock referendum that was held exactly five months ago. Brexit "makes more urgent than ever the need to tackle our economy's long-term weaknesses", the chancellor of the exchequer told MPs in his so-called Autumn Statement. Following slightly better-than-expected growth this year, gross domestic product was expected to expand by only 1.4 per cent in 2017. That marked a drastic downgrade from the prior estimate of 2.2 per cent. "That is slower of course than we would wish, but still equivalent to the IMF's forecast for Germany, and higher than the forecast for growth in many of our European neighbours including France and Italy," Hammond told lawmakers. Aside from Brexit, the OBR also highlighted the effects of the government's easing of austerity measures on borrowing levels. ING economist…... [read more]

(VOVworld) - Mark Carney, the Bank of England Governor, said on Monday that he would serve an additional year as head of the central bank until late June, 2019, to secure an orderly transition for the UK’s exit from the European Union. Mark Carney, the Bank of England Governor (Photo: VNA) Prime Minister Theresa May is expected to trigger Article 50 of the EU's Lisbon Treaty by the end of March, starting a two-year exit process that would see Britain leave the European Union by early 2019. The extension of Carney’s term will allow him to lead the central bank through full exit negotiations. Finance Minister Philip Hammond said he was "very pleased" with Carney’s decision to stay until 2019. In his reply to the governor's letter, Hammond wrote that this would enable Carney to continue his highly effective leadership of the bank through a critical period for the British economy as the UK negotiates its exit from the European Union.... [read more]

Asian stocks got off to a shaky start on Monday after a renewed FBI probe of U.S. Democratic presidential candidate Hillary Clinton's use of a personal email server sparked fresh tumult in markets, just days before the Nov. 8 presidential vote. The Japanese yen, seen as a safe-haven in times of uncertainty, rose slightly against the U.S. dollar. MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.2 percent in early trading on Monday. It is set to end the month down 2 percent. Japan's Nikkei slipped 0.6 percent, but remains poised for a monthly gain of 5.4 percent. On Friday, Wall Street and the dollar closed lower, after FBI Director James Comey sent a letter to the U.S. Congress informing it that the agency is again reviewing emails related to the private server Clinton used when she was secretary of state. Markets have tended to see Clinton as the candidate of the status quo, while there is greater uncertainty over what a victory for her Republican rival Donald Trump might mean for U.S. foreign policy, international trade deals or the domestic economy. Comey had decided in July that the Federal Bureau of Investigation was not going to seek prosecution of Clinton for her handling of classified materials. "There seems little doubt that a Trump victory would trigger selling in stock markets from current levels," Rick Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note. "This has traders nervous as they start the week assimilating…... [read more]

Asian shares tumbled in early trade on Wednesday, following in the footsteps of Wall Street, which pulled back on disappointing earnings, while the dollar inched down from a seven-month high and oil prices slid. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3 percent. Japan's Nikkei lost 0.2 percent, while South Korea's KOSPI dropped 0.8 percent and Australia fell 1.4 percent. U.S. stocks ended Tuesday down between 0.3 and 0.5 percent, as results and forecasts from companies in sectors including housing and consumer products missed expectations. Apple too dragged the market lower, as iPhone sales, which were better than expected, nevertheless continued a declining trend. The company also forecast slimmer-than-expected profit margins over the coming holiday season, even as it projected record sales. The U.S. declines followed a mixed performance in Europe, with British shares closing up 0.45 percent, Germany flat after hitting its highest level this year, and France down 0.3 percent. The broader European STOXX 600 fell 0.3 percent. "We had a rally (on Monday) and haven't been able to sustain it, due to weaker-than-expected numbers from some names," said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois. He called the day's earnings report a "mixed bag" for stocks. The dollar index , which tracks the greenback against a basket of six global peers, was steady at 98.726 early on Wednesday. It hit its highest level since Jan. 2 on Tuesday as traders saw a more than 78 percent chance of an interest rise…... [read more]

Gold Prices In 2010: Possible Scenarios By Phan Dung Khanh (*) Stomach-churning volatility in gold prices in 2009 surprised both investors and economists. Unlike in other investment avenues, the shock waves in the gold market swept away practically everything in their paths. It is perhaps necessary, then, for institutions and individuals to try to predict possible trends in this market. After hovering randomly around US$950 an ounce for three months, gold prices suddenly soared from US$945 an ounce on September 2, 2009, to a record high of US$1,227 on December 3, 2009. Several reasons accounted for this price hike: the greenback was on the slide; inflation was feared to surge again after several macroeconomic indicators improved; various countries, the U.S. included, injected huge amounts of funds into the economy; central banks and giant investment funds around the world actively purchased gold to add to their reserves. However, gold prices have suddenly plummeted since December 3. Within three weeks, they dropped by over US$150 an ounce, the most dramatic fall in 2009. Many experts and organizations such as Korea’s central bank, large commercial banks in Japan, HSBC, RBS (the U.K.) and Bank of America contend that gold prices would be on the wane. They argued that the scenario in late 2009 and early 2010 would resemble that in 1979-1980, when gold prices plunged from US$850 in 1980 (which translates into US$3,500 in current prices) to US$235 on September 1, 1999. Those who purchased gold in 1979-1980 have yet to recoup half…... [read more]

A rapid descent in the pound against the dollar Friday, referred to as a "flash crash", set tongues wagging across global trading floors as to what triggered the rare event. What caused the dive? After the pound crashed more than six percent against the dollar in under ten minutes during Asian trading hours, various explanations have been given. A spokesman for the Bank of England said simply that it was "looking into what happened" after sterling crashed also to a 6.5-year low versus the euro. Traders think that in today's tech-dominated world, it probably had a lot to do with complex mathematical equations known as algorithms. Automated trading systems can be set up to keep an eye on news headlines and react to potentially market-moving information. The Financial Times, among the first to report comments by French President Francois Hollande on Brexit, said the computers may have been reading its website. "Many algorithmic traders include tracking news websites in their systems. The FT story was first published the same minute as the move lower began," the paper said. Market analyst David Cheetham at XTB agreed. "It seems... plausible that news-scanning algorithmic trading systems began a move which gathered momentum as stop loss orders were triggered on the way down," he said. What news was potentially analyzed? The pound fell off a cliff at about 2310 GMT on Thursday to strike a 31-year low at $1.1841, before rebounding back above $1.24. The euro also hit a 6.5-year-high at 94.15 pence. Analysts…... [read more]

WASHINGTON: Global finance leaders on Thursday (Oct 6) publicly confronted the rising unpopularity of trade liberalisation, saying world economies needed to strive for more inclusive growth. With Republican presidential candidate Donald Trump leading a surge of anti-free trade sentiment in the United States, and Britain voting to secede from the European Union, top central bankers and finance ministers were pressed to defend long-standing ideology at the World Bank and International Monetary Fund annual meetings. "We shouldn't apologise for what has happened and hundreds of millions of people being lifted out of poverty and opportunity being created," Mark Carney, governor of the Bank of England, told a panel on the global economy. "But there are challenges with distribution," he said. "How do we work with people to share those fruits more effectively and how do we make trade tangible?" German Finance Minister Wolfgang Schaeuble expressed alarm at the rise of anti-trade populism across the developed world. "If you look at what we have achieved in reducing the number of very poor people all over the world," he said. "We must have in mind that we must not increase the gap between elites - political leaders, economic leaders, media leaders - and the people. Otherwise we will risk increasing populism and that's one of the major risks." At the same time, IMF Managing Director Christine Lagarde, whose organisation has long advocated lowering trade and investment barriers around the world, warned that now was not the time to close the door on globalisation,…... [read more]

World finance leaders on Thursday decried a growing populist backlash against globalization and pledged to take steps to ensure trade and economic integration benefited more people currently left behind. Their comments at the start of the International Monetary Fund and World Bank fall meetings signaled frustration with persistently low growth rates and the surge of public anger over free trade and other pillars of the global economic system. The meetings are the first since Britain voted in June to leave the European Union and U.S. billionaire Donald Trump secured the Republican presidential nomination with a campaign that attacked trade deals. "More and more, people don't trust their elites. They don't trust their economic leaders, and they don't trust their political leaders," German Finance Minister Wolfgang Schaeuble said during an IMF panel discussion in Washington. "In the UK, everyone from the elites told the people, 'don't vote for a Brexit.' But they did." Schaeuble said Germany was trying to "hold Europe together" in the face of rising nationalism, and failure to do so would bode poorly for global economic cooperation. Last week, the World Trade Organization slashed its global trade volume growth forecast to the slowest pace since 2007, saying it expected it to rise just 1.7 percent this year, down from the 2.8 percent it forecast in April. FEARS OF PROTECTIONISM On Thursday, Latin American finance ministers also expressed concerns about growing protectionist sentiment in advanced economies that threatens to sink trade agreements such as the 12-country Trans-Pacific Partnership, which…... [read more]

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