Claire Jones BoE makes rulers redundant

May 15, 2013 7:08 pm by Claire Jones

One of the few occasions when I’ve used a ruler since leaving school is during the Bank of England’s inflation report press conferences. I’m not alone — for years a ruler has been an essential tool for those trying to fathom what monetary policy makers thought was going to happen to growth and inflation in the months and years ahead.

The BoE’s practice of waiting a week between releasing its quarterly fan charts for growth and inflation and the data underlying them left bank-watchers with little choice but to dig out the ruler to work out where the MPC thought growth would be in, say, 2014. As Chris Giles commented here, there were several problems with this approach.

Now, thanks to the Stockton Review, reporters need no longer remember their rulers (hat tip to George Buckley at Deutsche Bank for the headline of this post). Read more

Tags: ,
Posted in Bank of England |

Claire Jones Others will follow Australia’s shift into the renminbi

April 24, 2013 8:24 pm by Claire Jones

This from the FT’s Josh Noble:

The Australian central bank plans to invest about 5 per cent of its foreign reserves in Chinese government bonds, in the latest move to build closer economic ties between the two countries.

The lead set by the Reserve Bank of Australia and a few others is likely to be followed by central banks elsewhere. Read more

Tags:
Posted in People's Bank of China, Reserve Bank of Australia |

Claire Jones No excuses for Britain’s dire exports

February 14, 2013 10:55 am by Claire Jones

Brits wanting a holiday in the sun have to stump up a lot more since the pound’s crash during the financial crisis. Even after a partial recovery, the pound remains down almost a fifth in real terms against its trading partners.

On the plus side, exports should be booming. Sadly, they aren’t. There are plenty of excuses explanations, but one stands out: British exporters have too much focus on slow-growing European economies and not enough on the whizzy emerging markets. The killer statistic is that the UK exports more to tiny troubled Ireland than to all the Brics put together. Read more

Posted in Bank of England |

Claire Jones Some forward guidance from the Monetary Policy Committee

February 7, 2013 5:52 pm by Claire Jones

Future BoE governor Mark Carney. Getty Images

Bank of England governor-designate Mark Carney talked a lot today about his fondness for so-called “forward guidance” — where a central bank indicates what is likely to happen to monetary policy way beyond its next policy vote.

The theory is that forward guidance boosts growth by providing more certainty to lenders that they will be able to access cheap cash from the central bank for a long time to come. Convinced of this, banks will reduce borrowing costs and lend more. And, with rates remaining lower for longer, savers will believe there is little point in holding cash and will go splurge. Read more

Tags: ,
Posted in Bank of England |

Claire Jones Will the Bank of England ease policy on Thursday?

February 4, 2013 6:39 pm by Claire Jones

Pretty much everyone is expecting the Monetary Policy Committee to do the same thing it has done for the past six votes and stand pat on Thursday, when governor-designate Mark Carney is also due to appear before MPs at the Treasury Select Committee.

But one former deputy governor, Sir John Gieve, thinks there’s a chance that the MPC could vote in favour of easing policy. Read more

Posted in Bank of England |

Claire Jones An honest argument for a dual mandate

February 4, 2013 1:47 pm by Claire Jones

Asked today whether the Treasury should scrap the Bank of England’s 2 per cent inflation target, former policy maker and current central banking guru Charles Goodhart said no. The target, he said, had done little to stop the Monetary Policy Committee easing rates and printing money to stave off an economic and financial meltdown.

Andrew Sentance, another ex rate-setter, agreed. “Inflation targeting hasn’t been the constriction it has been played up to be,” he said this morning.

A cynic would argue that this is because in recent years the BoE has ignored price pressures and instead focused on growth; inflation has been above 2 per cent since December 2009 — rising as high as 5.2 per cent in the autumn of 2011. Read more

Tags: , , , , ,
Posted in Bank of England |

Claire Jones The return of the BoE governor’s eyebrow

January 15, 2013 6:27 pm by Claire Jones

It seems Sir Mervyn King's eyebrows speak volumes. Image by Getty

The eyebrows of the governor of the Bank of England could become a force to be reckoned with once more.

In the days before the Basel rules, an eyebrow raised by the top man at the Bank — which was then chief financial regulator — supposedly put a stop to any misbehaviour by the banks.

It took slightly more than a raised eyebrow today. But just hours after Sir Mervyn King described Goldman Sachs’ plan to defer bonuses to avoid the 50 per cent top rate of income tax as “disappointing”, the US investment bank backed down. Read more

Tags:
Posted in Bank of England |
From FT.com January 14, 2013

The Bank of England. Getty Images

The Bank of England has reaffirmed its plans to tackle housing bubbles by raising lenders’ capital requirements, rather than banning borrowers from taking out certain types of mortgages.

The BoE’s interim Financial Policy Committee, the body set up to safeguard the stability of the financial system, on Monday said it would aim to reduce “exuberance” in the housing market by raising so-called “sectoral capital requirements” that make lenders hold more capital against certain types of loans.

 Read more

Posted in Uncategorized |

Claire Jones ECB press conference: live blog

January 10, 2013 1:16 pm by Claire Jones
Mario Draghi, president of the European Central Bank. Image by DANIEL ROLAND/AFP/Getty Images.

Mario Draghi, president of the European Central Bank. Image by DANIEL ROLAND/AFP/Getty Images.

Hello and welcome to today’s live blog for European Central Bank president Mario Draghi’s first press conference of 2013.

Mr Draghi will begin speaking at 13.30. All times are UK time.

 

 

14.40 The live blog is now closed.

14.38 The ECB president struck a very upbeat tone at today’s presser.

Mr Draghi is clearly delighted with the recent developments in financial markets (see 13.46), though he warned against complacency on the part of governments and added that we were yet to see any signs of an economic recovery.

Because markets were a lot more positive, the governing council was unanimous in deciding to hold rates and no-one even bothered to discuss the option of a cut, which now looks unlikely to happen in the coming months.

14.30 The questions end. Recap to follow.

14.28 Contagion is now working in the eurozone’s favour. “There is a positive contagion when things go well and that’s what’s in play now,” he says.

Despite the recent progress made, however, Draghi say DON’T relax. Which is all well and good, but it doesn’t make for a decent t-shirt does it?

He urges governments to keep up the good work and continue to implement structural reforms.

 Read more

Tags: ,
Posted in European Central Bank, European Union (EU) |

Claire Jones The debate on scrapping the inflation target

January 2, 2013 7:57 pm by Claire Jones

If Bank of England governor-designate Mark Carney was looking to spark debate, then his call for the UK to scrap its inflation target (should meaningful growth continue to elude the UK) has done the job.

The FT’s economics editor Chris Giles and economics correspondent Sarah O’Connor write in today’s paper that Mr Carney’s call has divided economists in this year’s FT poll.

Those in favour of sticking with the status quo — 45 per cent — outnumber those calling for a shift to a new regime — 35 per cent. (And not all of those in favour of a switch back Mr Carney’s calls for central banks to target nominal GDP instead.) But in previous years, support from more than a handful of economists for the scrapping of the inflation target would have been unthinkable.

Interestingly, support for change is stronger than average among those who have had to work with inflation targeting: of the ten former MPC members that took part in the poll, five want to do away with the current regime, with the rest in favour of keeping it. Read more

Tags: ,
Posted in Bank of England |
BackOlder entries