Connect with us

Banking

Bank of England expected to keep rates steady

Britain’s central bank looks set to keep interest rates steady. This is because, it approaches the end-point of its 895-billion-pound asset purchase program. They are casting a wary eye over surging inflation pressures. Investors will be keen to see if more Monetary Policy Committee (MPC) members join external member Michael Saunders. The BoE is ahead of other banks in planning to stop quantitative easing. Half its policymakers judged in August that some preconditions for an interest rate rise had already been met.

The U.S. Federal Reserve cleared the way to reduce its monthly bond purchases. The increase in interest rate may follow more sooner than expected, according to them. In August, the BoE revised up its forecast for inflation to 4%. This reflects the higher energy prices and post-COVID-19 bottlenecks. Natural gas prices have surged across Europe in recent time. If rising inflation pushes up longer-term inflation expectations among the general public, leading to firms and workers factoring above-target inflation into future pricing decisions and wage demands.

A monthly survey from Citi showed that the sharpest monthly rise in year-ahead inflation expectations hit a nine-year high of 3.2%. the economists in Citi said that this print could tilt the balance of risks to the hawkish side for the MPC meeting. More may join Michael Saunders in voting for an early end to asset purchases, and even dissent on Bank Rate cannot be ruled out. Two new policymakers join the MPC. They are the former European Central Bank and Goldman Sachs economist Huw Pill and Catherine Mann.

The BoE is expecting that the Britain’s economy will regain its pre-COVID-19 size at the end of this year. But a surge in the coronavirus cases caused growth to slow. Hence, the business surveys suggest momentum has been hard to regain. Furlough support payments for over a million workers end this month. This is because of a temporary increase in other welfare payments, squeezing households at a time when inflation is pushing up the cost of essentials.

Continue Reading
NOMINATE NOW
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Banking

Goldman banker hired by the Citi bank

Citigroup has hired Luisa Leyenaar-Huntingford from Goldman Sachs. This new hire is to co-head its global infrastructure franchise. Because, it seeks to win more business from cash-rich investment firms focusing on infrastructure deals. Leyenaar-Huntingford will be based in London. Responsibility will be shared with Todd Guenther in New York.

The pair will work closely with industry teams covering healthcare, industrials, natural resources and clean energy transition (NRCET), technology and communications. Leyenaar-Huntingford helped in the establishment of the Goldman’s infrastructure franchise in her time at the Wall Street bank. They will team up with Citi’s Iberia co-head of banking, capital markets and advisory (BCMA) Jorge Ramos will continue to be a senior member of the global infrastructure franchise.

The infrastructure sector is poised for further growth, according to the memo. The memo was released by Citi’s global co-heads of the alternative assets group Anthony Diamandakis and John Eydenberg, and its EMEA head of BCMA Nacho Gutierrez-Orrantia. There was significant private investment demand across the globe to deal with environmental, energy, transportation, waste, communication, digital and other social needs.

Continue Reading

Banking

Banks make slow progress on UK gender pay

Major banks in Britain made a slight dent in their gender pay gaps. Several insurers went backwards. Companies in Britain with more than 250 employees have been required to publish the difference between the pay and bonuses of their male and female employees. They got a reprieve due to the pandemic, last year. The financial services sector has shown one of the largest genders pay gaps in Britain. The lack of women in senior jobs is the main reason.

Pay gap data from 21 major financial institutions showed a narrowing in their average mean gender pay gap. This is just 0.4 percentage points. Banks alone had a pay gap which narrowed by one percentage point. Ann Francke, chief executive of the Chartered Management Institute said that the UK’s financial services industry has often been singled out. It really does have to get its house in order. Goldman Sachs had the widest gender pay gap in the year to April 2020. Goldman posted a gender pay gap of 51.8%. The bank told the staffs that narrowing the gap further was a critical priority. A spokesperson for banking lobby group UK Finance said, that there is clearly more still to be done.

FTSE 100 insurers Prudential, Legal & General and M&G reported a widening in their pay gaps. Prudential’s UK gender pay gap widened to 45.2%. M&G also reported a widening in its pay gap in the most recent year to 30.5%. The M&G spokesperson said that they are determined to narrow their gender pay gap and will do this by achieving better representation of women in all roles at all levels of our organization. Legal & General’s mean gender pay gap widened to 30.8%.

The insurer said that the legal & general is tackling the underlying causes of its pay gap. This is by creating a more diverse workforce and a more inclusive culture through sustained, long-term action. Admiral had a gender pay gap last year of 12.8%. The 21 firms surveyed were Barclays, HSBC, Lloyds, NatWest, Standard Chartered, Bank of America Merrill Lynch, Goldman Sachs International, JPMorgan, Morgan Stanley, UBS, Credit Suisse, Deutsche Bank, PGMS (a Phoenix unit), abrdn, Schroder Investment Management, St James’s Place, Legal & General, Prudential, Admiral Group, Aviva and M&G.

Continue Reading

Banking

BOJ to lower inflation target-Japan’s finance minister

Japan’s outgoing finance minister, Taro Aso, said that he had proposed lowering the central bank’s 2% inflation target. This is when the prices took a hit from plunging oil prices. He was the finance minister for nearly nine years. The slump in oil price was among the main reasons the government could not officially declare an end to deflation. In his final news conference as finance minister, Aso said that he proposed to Governor Kuroda that, with oil prices falling this much, it would be hard to achieve 2% inflation. Hence, the target must be lowered at some point. He stated this by referring to Bank of Japan (BOJ) chief Haruhiko Kuroda.

Aso also said that the governor said he would do his best to achieve the target. This is stated by adding that policymakers must scrutinise at some point, why the BOJ’s inflation target of 2% has not been met. The remarks highlight how the government and lawmakers distanced themselves from the BOJ’s target years ago, despite central bank reassurances that achieving the target was possible by maintaining or increasing stimulus.

Aso was deeply involved in negotiations with the BOJ. After Kuroda took over as governor, he deployed a massive asset-buying program. This is for pulling Japan out of deflation. Aso supported the BOJ’s stimulus efforts. He is a member of the cabinet. And also, had raised many doubts that monetary policy alone can reflate the economy out of the doldrums. New Prime Minister Fumio Kishida is set to form a cabinet.

Continue Reading

Trending