Brexit Has Hit UK’s Economic Openness, Says Bank of England Governor

GUARDIAN EUROPE: Andrew Bailey says free trade demands greater international cooperation on financial rule-making

The governor of the Bank of England has called for greater cooperation on financial rule-making, warning that Brexit has affected the “openness of the UK economy”.

In an apparent swipe at those calling for the UK to develop a separate rulebook for banking and insurance activities, Andrew Bailey said free trade needed strong regulation based on agreements with foreign watchdogs.

Speaking in Dublin at a financial services conference organised by the Irish central bank, he argued against trade protectionism and regulatory fragmentation.

“As a public official, I take no position on Brexit per se,” Bailey said. “That was a decision for the people of the UK.” » | Phillip Inman | Wednesday, November 8, 2023

Brexit has helped the City, not harmed it despite 'pretty dire' warnings from economists and experts, says Bank of England governor Andrew Bailey: • Bank of England governor says Brexit opportunities have 'protected' Britain • Mr Bailey said Britain had defied 'dire' warnings from economists and experts • Comments are a marked shift from his immediate predecessor Mark Carney »

If my memory serves me well, Andrew Bailey, the Governor of the Bank of England, at the time of the Brexit Referendum advocated for the UK to leave the EU. I am almost certain that he was an ardent Brexiteer. – © Mark Alexander

Bank of England Says Interest Rates Will Remain High for At Least Two Years

THE GUARDIAN: Policymakers vote for quarter-point rise to 5.25%, the 14th increase in a row, as Bank rules out prospect of recession

The Bank of England has warned businesses and households that the cost of borrowing will remain high for at least the next two years as it raised interest rates for the 14th consecutive time to 5.25%.

Ruling out the likelihood of a recession over the next two years, policymakers blamed strong wages growth in recent months for the need to increase interest rates by 0.25 percentage points to the highest level for 15 years.

Officials on the Bank’s monetary policy committee (MPC) said the economy had proven more resilient during a period of high interest rates than they expected when they last made an assessment of the UK economy in May. (+ video) » | Phillip Inman | Thursday, August 3, 2023

Bank of England Raises UK Interest Rates to 4.5%

THE GUARDIAN: Latest 0.25 point hike marks 12th rise in a row as Bank battles stubbornly high inflation

The Bank of England has raised interest rates by a quarter of a percentage point to 4.5% amid growing concerns about persistently high inflation in the UK.

The Bank’s monetary policy committee voted by a majority for a 12th successive increase in borrowing costs, continuing its most aggressive rate-hiking cycle since the 1980s in an attempt to dampen UK inflation which remains in double digits.

UK rates are at the highest level since October 2008, when the global economy was in the grips of the financial crisis. » | Richard Partington | Thursday, May 11, 2023

Bank of England Raises Interest Rates to 3.5% in Ninth Increase in a Year

THE GUARDIAN: Majority of MPC rate-setters back hike of 0.5 percentage points despite fears UK is entering a long recession

The Bank of England has raised interest rates by 0.5 percentage points to 3.5% in an effort to combat double-digit inflation that has caused a widespread cost of living crisis.

Members of the central bank’s monetary policy committee (MPC) voted to increase the cost of borrowing after the consumer prices index in November showed annual inflation of 10.7%.

A majority of the Bank’s rate-setting committee said the ninth increase in the base rate over the past year was necessary to bring down inflation by 2025 to its 2% target. » | Phillip Inman | Thursday, December 15, 2022

Bank of England Poised to Raise Borrowing Costs to Combat Inflation

THE GUARDIAN: Financial markets expect 0.5 percentage point increase as fears mount that UK is about to enter long recession

The Bank of England is poised to increase the cost of borrowing for households and businesses at its interest meeting today, as fears mount that the UK economy is about to enter a long recession.

Financial markets expect a 0.5 percentage point increase in the central bank’s base rate to 3.5% as the monetary policy committee seeks to combat inflation.

The consumer prices index (CPI) fell back from 11.1% in October to 10.7% last month, according to data released Wednesday, mainly from weaker increases in petrol, clothing and food, but remains well above the BoE’s 2% target.

Jeremy Hunt has indicated he will welcome a tough stance on rates by officials at Threadneedle Street after he said bringing down inflation was his main mission. » | Phillip Inman | Wednesday, December 14, 2022

Economy Latest: Interest Rates Up as Bank of England Warns of Long Recession

Nov 3, 2022 | People are already struggling with soaring costs and a tax burden, the highest since World War Two.

Bank of England Hikes Interest Rates to 3% in Biggest Rise since 1989

THE GUARDIAN: Bank fears 0.75 percentage point rise may push UK economy into longer and deeper recession than the 1930s

The Bank of England has increased the cost of borrowing by 0.75 percentage points to 3%, despite predicting that higher interest rates would push the economy into the longest recession since the 1930s.

In a split vote, the central bank’s monetary policy committee (MPC) voted by a 7-2 majority for the biggest increase in rates since 1989 to combat an inflation rate that hit 10.1% in September.

The Bank blamed higher energy prices and a tight labour market for the decision to increase interest rates, matching rises in the last week by the US Federal Reserve and the European Central Bank. » | Phillip Inman | Thursday, November 3, 2022

Bank of England warns of longest recession since the 1930s: Interest rate rise to 3% is biggest since 1989 and fears UK economy may go into longer, deeper recession »

Mini-budget Will Likely Mean Higher Interest Rates, Warns Bank of England Governor

THE GUARDIAN: Andrew Bailey says UK borrowers can expect to feel impact of Truss government’s tax and spending decisions

Governor of the Bank of England, Andrew Bailey, says extra stimulus in last month’s mini-budget would force the Bank into tougher-than-expected action. Photograph: Drew Angerer/Getty Images
UK borrowers can expect to face higher interest rates as a result of the Truss government’s tax and spending decisions during its six weeks in power, the governor of the Bank of England has warned.

Despite the U-turn on corporation tax on Friday that saw the sacking of Kwasi Kwarteng as chancellor, Andrew Bailey said the extra stimulus provided in last month’s mini-budget would add to inflation and force the Bank into tougher-than-expected action.

Bailey said he had impressed on the new chancellor, Jeremy Hunt, the need for the public finances to be sustainable and that there had been a “clear and immediate meeting of minds”. Hunt used his first interview to stress mistakes made by Truss would require “difficult decisions” to be made. » | Larry Elliott | Saturday, October 15, 2022

Professor Tim Wilson: Kwarteng and Truss Have Cheated the Nation

If thee are plans we can see them now- we don’t need to wait till the end of the month! Personally I do not think these plans exist.

Emergency Action by Bank of England amid UK Economic Turmoil

As the economic storm clouds over the UK darkened further still, the Bank of England today staged a dramatic intervention - saying it will start buying up government debt in an effort to stabilise markets and protect pension funds.

The surging cost of borrowing, sparked last week by the Chancellor's tax-cutting plans, had earlier drawn a stinging rebuke from the IMF - but the government says it's sticking to its guns, although departments will be asked to identify 'spending efficiencies'.

Labour says parliament should be recalled so the prime minister is held to account over the crisis.


Truss and Kwarteng are not fit for purpose. They need to go. Go before the UK economy is totally ruined. Both of them are greenhorns. No to tax cuts for the super-rich! No to Kwarteng’s voodoo economics! – © Mark Alexander

Kwarteng’s Tax Cuts Will Force ‘Significant’ Interest Rate Rises by Bank of England

THE GUARDIAN: Chief economist says mini-budget will increase inflationary pressure in remarks likely to further spook mortgage borrowers

The Bank of England’s chief economist, Huw Pill, says: ‘It is hard not to draw the conclusion that this [tax cuts] will require a significant monetary policy response.’ Photograph: Bloomberg/Getty Images
A senior Bank of England official has warned “significant” increases in interest rates will have to be imposed by the central bank in response to tax cuts put forward by Kwasi Kwarteng in his mini-budget.

The Bank’s chief economist, Huw Pill, said the chancellor’s planned tax cuts would act as a stimulus and increase inflationary pressures, with the result that interest rates would need to go higher than previously forecast.

“In my view, a combination of the fiscal announcements we have seen will act a stimulus to demand in the economy,” he said. “It is hard not to draw the conclusion that this will require a significant monetary policy response.”

Pill’s remarks are likely to further spook homebuyers and mortgage borrowers near the end of a fixed-rate mortgage about the cost of financing their loans. » | Phillip Inman | Tuesday, September 27, 2022

UK’s cost of borrowing on international markets overtakes Greece and Italy: Five-year British government bonds fall dramatically as traders price in higher risk of default on debt »

Pound Crashes to All-time Low as UK Chancellor Hints at More Tax Cuts

Chancellor Kwasi Kwarteng was today forced to quell growing market unease over his low-tax, high borrowing strategy with a promise to set out more details in November, along with independent costings.

The Bank of England put out a statement too, saying they wouldn't hesitate to hike interest rates at their next meeting, but neither intervention seemed to reassure city markets.

The pound slid once again this evening, having hit a historic low against the dollar earlier in a rollercoaster day.
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And amidst the turmoil - the cost of government borrowing shot up too.

Pound Comes under New Pressure after Bank of England Fails to Raise Rates

THE GUARDIAN: Central bank stops short of emergency rate hike and instead says it will make full assessment in November

The Bank of England issued a statement in response the pound’s sharp fall on currency markets.Photograph: James Veysey/Rex/Shutterstock
The government was struggling to prevent a full-scale loss of financial market confidence in its economic strategy on Monday evening after the Bank of England’s decision to rule out an emergency rise in interest rates prompted fresh selling of the pound.

Attempts by Threadneedle Street and the Treasury failed to repair the damage caused by Kwasi Kwarteng’s mini-budget last Friday, with sterling falling to a record low against the US dollar.

Within minutes of the Bank saying that it intended to wait until November before responding to the recent turbulence, the pound had dropped two cents against the dollar and was within three cents of the record low of $1.03 hit in Far East trading overnight. » | Larry Elliott, Economics editor and Rowena Mason, Deputy political editor | Monday, September 26, 2022

Markets warn sterling slump could lead UK interest rates to triple by next year: Analysts expect Bank of England to convene meeting to raise rates with further increase in November »

Isn’t this Governor being rather lily-livered? – © Mark Alexander

UK in Recession and Further Interest Rate Hikes on Their Way, Bank Warns Kwarteng

THE GUARDIAN: Threadneedle Street makes clear on eve of tax-cutting mini-budget that plans risk triggering more rate rises

One Whitehall source described the chancellor’s mini-budget as having ‘more rabbits than Watership Down’. Photograph: Toby Melville/Reuters
The Bank of England has warned Kwasi Kwarteng the economy is in recession and it will most probably need to push interest rates higher following Friday’s tax-cutting mini budget from the chancellor.

On the eve of a major package of support from the chancellor designed to break what he called the economy’s “cycle of stagnation”, Threadneedle Street said the UK economy was heading for a second consecutive quarter of falling output, with gross domestic product set to shrink 0.1% in the three months to September.

However, with energy and food bills still soaring, and inflation not expected to peak until October, the Bank of England raised the cost of borrowing for a seventh successive meeting of its monetary policy committee (MPC) and made clear the new government’s plans risked triggering more interest rate hikes. » | Larry Elliott, Jessica Elgot and Richard Partington | Thursday, September 22, 2022

In Full: Former BoE Governor Warns of a "Very Unpleasant Period" Ahead

Former Bank of England Governor Mervyn King blames central banks for fuelling the cost-of-living crisis by printing too much money during the pandemic.

King headed Britain's central bank from 2003 to 2013, and oversaw the start of its QE programme in March 2009 during the global financial crisis.

But in more recent years he has criticised the scale of central bank asset purchases, which were funded by newly-created money.

Bank of England under Fire over £23m Bonus Payouts

THE OBSERVER: Anger as thousands of Bank staff enjoy ‘performance awards’ after governor urged other British workers not to demand big rises

The Bank of England, which has been criticised for underestimating the threat of rising inflation, last year paid out bonuses to its staff amounting to more than £23m, the Observer can reveal.

This bonus pot was at its highest level for at least two years, with more than 4,260 employees receiving performance awards. Andrew Bailey, the bank’s governor, was widely criticised earlier this year after telling Britain’s workers that they should not be asking for big pay rises because inflation had to be kept under control.

The bank is tasked by the government with hitting an inflation target of 2%, but the current rate stands at 9.4%. Lord Sikka, emeritus professor of accounting at Sheffield University, said: “Bonuses should only be paid for extraordinary performance, but there is no evidence the bank has delivered even an ordinary performance. They are unjustified.” » Jon Ungoed-Thomas | Sarurday, August 13, 2022

Bank of England Raises Interest Rates to 1.75% in Biggest Hike in 27 Years

THE GUARDIAN: Policymakers increase base rate by 0.5 percentage points, the sixth rise in a row as the cost of living soars

The Bank of England has raised interest rates by 0.5 percentage points to tackle the soaring cost of living, despite concerns that the economy is heading for a recession. » | Phillip Inman | Thursday, August 4, 2022

WARNING FROM THE BANK OF ENGLAND:

Bank of England warns the UK will fall into recession this year: The Bank of England has warned that the UK will fall into recession this year as it raised interest rates from 1.25% 1.75% in a bid to curb soaring prices. »


Bank of England hikes interest rates and says inflation will hit 13%: Base rate raised by 0.5 percentage points to 1.75%, as Bank predicts prolonged recession starting later this year »

UK Interest Rates Raised to 1.25% by Bank of England

BBC: UK interest rates have risen further as the Bank of England attempts to stem the pace of soaring prices.

Rates have increased from 1% to 1.25%, the fifth consecutive rise, pushing them to the highest level in 13 years.

It comes as finances are being squeezed by the rising cost of living, driven by record fuel and energy prices.

Inflation - the rate at which prices rise - is currently at a 40-year high of 9%, and the Bank warned it could surpass 11% later this year.

The Bank said rising energy prices were expected to drive living costs even higher in October, but added it would "act forcefully" if necessary should inflation pressures persist. » | Dearbail Jordan, Business reporter, BBC News | Thursday, June 16, 2022

Recession: The Price Britain Will Pay to Control Inflation

THE GUARDIAN: Analysis: As the Bank of England raises interest rates the message is clear – the 1970s are back

Unemployment rising. Inflation above 10%. Energy prices soaring. Living standards squeezed. The message from the Bank of England was crystal clear: the 1970s are back.

The word stagflation was not to be found in the 100-plus pages of Threadneedle Street’s monetary policy report. Yet a period of weak growth and rapidly rising prices is precisely what the Bank says is in store for the UK. The current post-lockdown bounce will be short-lived and, in a real blast from the past, the economy will be driven into recession to bring inflation under control.

Nor is the pain likely to be over quickly. The economy is expected to contract by 0.25% in 2023 and remain weak in the next two years. Unless things take a marked turn for the better, the next general election will take place against a backdrop of weak growth and lengthening dole queues. » | Larry Elliot, Economics editor | Thursday, May 5, 2022

Bank of England raises interest rates as it warns of recession and 10% inflation: Rise to 1% is fourth successive increase and highest level since February 2009 »

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Interest Rate Rise: Now UK Faces Prospect of a Recession

May 5, 2022 • Sky's Economic Editor Ed Conway says the Bank of England is warning a recession could be ahead, and this, combined with double-digit inflation and stalling growth, means a toxic cocktail for the economy.

Warning of economic downturn as interest rates rise: The Bank of England has warned the UK faces a "sharp economic slowdown" this year as it raises interest rates to try to stem the pace of rising prices. »