Old-style notes must either be spent or deposited in a bank before end of September
People have just 100 days left to use the paper £20 and £50 banknotes remaining in circulation, the Bank of England has said.
The last day the notes will have legal tender status is 30 September.
Continue reading...Labour accuse chancellor of wastefulness for failing to insure against interest rate rises
Rishi Sunak has been accused of wasting £11bn of taxpayers’ money by paying too much in interest servicing the government’s debt.
The National Institute of Economic and Social Research (NIESR) said the losses were the result of the chancellor’s failure to insure against interest rate rises on £900bn of reserves created through the quantitative easing (QE) programme.
Continue reading...Latest updates: UK prime minister meets Sinn Féin and DUP as Mary Lou McDonald suggests forming Stormont assembly is not UK government priority
This is from my colleague Jennifer Rankin in Brussels on the UK government’s mixed messaging over the Northern Ireland protocol.
Taoiseach Micheál Martin and Sinn Féin’s leader in Northern Ireland, Michelle O’Neill, have said they recognise there are “serious issues” in relation to the implementation of the Brexit protocol that Boris Johnson is planning to override in part.
They expressed serious concern about possible unilateral moves on the protocol by the British government, which would have a destabilising impact on Northern Ireland.
They recognised that there are genuine issues regarding aspects of the implementation of the protocol but these can be taken forward in the context of EU-UK discussions.
Continue reading...Bank of England’s Andrew Bailey blames UK’s highest inflation rate for three decades on Russia-Ukraine war
The Bank of England governor has blamed the war in Ukraine for the highest inflation in the UK for three decades and warned that “apocalyptic” food prices caused by Russia’s invasion could have a disastrous impact on the world’s poor.
Giving evidence to MPs, Andrew Bailey said while he was unhappy about the level of price rises, 80% of the inflation overshoot was caused by factors outside the Bank’s control.
Continue reading...Ex-official says policymakers must shrink the UK economy to limit upward pressure on prices made worse by Brexit
Britain’s central bank policymakers are “duty bound” when they meet this week to push the UK into recession to cap rising inflation, a former Bank of England (BoE) official has said.
Adam Posen, who runs Washington-based thinktank the Peterson Institute, said that while the Bank of England would not want workers to lose their jobs, it should hike interest rates now to squeeze out inflationary pressures made worse by Brexit trade and immigration restrictions.
Continue reading...Andy Haldane says city’s crucible-like atmosphere created ‘combustion’ for economic prosperity
The government’s new levelling-up strategy should help Britain’s left-behind towns and cities emulate Renaissance Florence in cooking up the “secret sauce” of economic success, according to its co-author Andy Haldane.
The hefty report, published on Wednesday, was mocked by some for its frequent historical references – including to 15th-century Florence under the Medici – but Haldane, a former Bank of England chief economist, is deadly serious.
Continue reading...After the pandemic more women are choosing to work from home but that choice could damage career prospects
Employees want it, employers know they have to offer it; flexible working has transformed almost every office during the pandemic and it’s here to stay.
It is a change that has been demanded for decades by groups including women, those with caring responsibilities and disabled people. But economists and employment experts are warning it could lead to more inequality at the office, particularly for working mothers.
Continue reading...After Tesco’s website and app were down for most of the weekend, leaving many frustrated customers unable to shop online, HSBC’s business banking portal (called HSBCnet) had some issues this morning.
Large corporate customers only had intermittent access via the website or app for about an hour, from 9.10am, but the problem has been fixed, according to HSBC.
This is truly a dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012. This will hurt many household budgets and no doubt have knock-on implications for the wider economy.
Continue reading...After the success of the chancellors’s £70bn programme, there is uncertainty about the future direction of the economy
The biggest state intervention in the UK’s labour market in peacetime comes to an end this week when the government finally winds up its furlough support.
Barring an unlikely last-minute change of heart, a wage subsidy that has been in place for 18 months and has cost £70bn will no longer be open to struggling firms.
Continue reading...Experts warn of danger of untraceable funds if companies accepting payments in cryptos go bust
The government could face “limitless” losses as a result of businesses that accept payments in untaxed and untraceable cryptocurrencies going bust, an insolvency expert has warned.
A growing number of companies, including the ethical cosmetics firm Lush and office-sharing firm WeWork, have begun taking payments for goods and services in cryptocurrencies such as bitcoin, alongside debt, credit or cash.
Continue reading...Wise Bank of England heads are pondering the case for a state-run digital currency this week. But do we really need one?
When Google announced that bitcoin traders would be allowed to buy advertising space on its pages from August, central banks were alerted to the next likely surge in publicity for cryptocurrencies.
The increasing activity around digital currencies has not gone unnoticed at the Bank of England, and on 7 June Threadneedle Street’s brightest will publish a consultation document, setting out how a publicly operated electronic coinage system – one that would rival bitcoin – might work.
Continue reading...Former prime minister sent string of emails to Bank officials and argued firm should be a priority for Treasury funding
David Cameron repeatedly pushed the Bank of England and the Treasury to risk up to £20bn in taxpayer cash to help Greensill Capital, just as the lender started to face “significant” financial pressure at the start of the pandemic.
The UK’s central bank was urged to provide support to Greensill, including by setting up a fund that would buy loans made by the financial services company and its competitors, in a string of emails to senior officials.
Continue reading...Twelve months after the pandemic struck the Guardian’s economic tracker reveals real risk of lasting damage
When Boris Johnson announced the first stay-at-home order, effectively shutting down whole sections of the economy, it was hoped the tide could be turned within 12 weeks. As many months later, lockdown measures are being relaxed for a third time and Britain still faces a lengthy road to recovery from the worst recession for 300 years.
As restrictions ease, the chief economist at the Bank of England, Andy Haldane, warned that despite the reopening of the economy, the risk of a “jobs equivalent of long Covid” remains for workers across the country.
Continue reading...Despite Covid, global stocks started 2021 on a high. But some analysts warn of an ‘epic’ bubble, amid fears that the flow of stimulus has created a monster
Insurrections are not usually seen by investors as buy signals. Yet even as rioters stormed the seat of US legislative government last week, stock market indices hit new highs in New York, adding another chapter to 12 months of apparent defiance of economic gravity.
Wall Street, measured by the benchmark S&P 500, was not alone in starting 2021 with a bang. London’s FTSE 100 jumped by more than 6% in the first week of the year as investors took in a heady cocktail of a President Joe Biden ready and able to spend money, cheap borrowing costs, and the hopes that vaccines will end the coronavirus lockdowns. Yet amid the exuberance a serious concern looms: are we on the cusp of another colossal crash?
Continue reading...Andrew Bailey said failure to agree to deal would cause long-term damage to UK economy
The governor of the Bank of England, Andrew Bailey, has warned that the economic cost of a no-deal Brexit would be bigger in the long term than the damage caused by Covid-19.
Bailey said failure to agree to a deal before the Brexit transition expires at the end of December would cause disruption to cross-border trade and damage the goodwill between London and Brussels needed to build a future economic partnership.
Continue reading...Appeal court sets aside ruling that gold could not be released to Nicolás Maduro-backing bank
A battle for the control of more than $1.8bn worth of Venezuelan gold stored at the Bank of England has swung in favour of the government of Nicolás Maduro after an appeals court in London overturned an earlier high court ruling concerning whom the UK recognised as Venezuela’s president.
The court of appeal granted an appeal by the Banco Central de Venezuela (BCV) and set aside July’s high court judgment, which had found that Britain’s recognition of the opposition leader Juan Guaidó as the “constitutional interim president of Venezuela” meant the gold could not be released for the Maduro-backing bank.
Continue reading...Rolling live coverage of business, economics and financial markets as investors anticipate new approach to inflation
Something to sink your teeth into before lunch: more discounts on dining out.
Related: Eat out to help out scheme to be extended by some restaurants
Mark Haefele, chief investment officer, UBS Global Wealth Management, said:
While we expect the Fed to shy away from more radical easing measures, such as explicit controls on government bond yields, we believe Powell will likely outline other dovish measures. These could include a move toward average inflation targeting, giving the central bank more leeway to allow inflation to overshoot the 2% target while keeping rates pegged close to zero.
Maybe the age of the independent, activist central bank head is also coming to an end. Fiscal policy is more powerful and monetary policy needs to work in harmony with it. Monetary policy is being asked to do things (like tackle economic inequality) that it really isn’t suited to. But, here we are, waiting for Jay Powell to turn up at Grafton’s Saloon. He’s already done everything he can, he’s almost out of bullets and he may even have already won the fight, but we have placed our faith in him and desperately want fresh encouragement.
Continue reading...UK has ‘unequivocally recognised’ rival Juan Guaidó as Venezuela’s president, ruling says
A British court has refused to give Nicolás Maduro control of $1bn (£799m) of gold bullion held by Venezuela in the vaults of the Bank of England, ruling the UK government has “unequivocally recognised” his rival Juan Guaidó as president.
The Venezuelan central bank (BCV) – whose board is appointed by Maduro, the successor to Hugo Chávez – took the legal action after its request to release the gold to pass the proceeds to the UN to help combat coronavirus in the country was rejected by the Bank of England on the basis the UK had recognised Guaidó.
Continue reading...$1bn gold hoard subject of dispute between Nicolás Maduro and rival Juan Guaidó
Claims that the Bank of England is unlawfully blocking the release of 31 tonnes of gold valued at nearly $1bn(£805m) and intended to combat the coronavirus in Venezuela have been heard in the high court this week.
The bars are among the 400,000 bars of gold held in the Bank’s vaults, but there is a political dispute about their rightful owner.
Continue reading...UK recognises Juan Guaidó as country’s interim president, arguing president Nicolas Maduro rigged 2018 election
A court in London has said that it will need to decide which of Venezuela’s duelling political factions to recognise before ruling on president Nicolas Maduro’s request for the Bank of England to hand over gold the country has in its vaults.
For decades, Venezuela has stored gold that makes up part of its central bank reserves in the vaults of foreign financial institutions including the Bank of England, which provides gold custodian services to developing countries. But since 2018, the bank has refused to transfer the funds to Maduro’s government, which Britain does not recognise.
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