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Category Archives: Banking

Net exports from the UK financial sector fell last year

Net exports of the UK financial sector fell by 17% in 2009 to £41.8bn. This was the second highest figure on record but was, not surprisingly, down from £50.6bn in 2008 as a result of the ‘credit crunch’. These figures were published yesterday by TheCityUK, an independent body which promotes the UK financial services industry. Although securities dealers contributed £1.4bn, … Continue reading

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Recovery being hindered by lack of credit

Tight credit conditions and a rise in the cost of borrowing are likely to weaken the UK’s recovery according to Britain’s manufacturers. This is the result of a survey just conducted by the EEF, the manufacturers’ organisation. It is particularly surprising given the historically low level of the Bank of England’s base rate at 0.5% and the efforts the Bank … Continue reading

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Do we need a High Pay Commission?

Today the centre-left political pressure group, Compass, and 100 leading public figures launched a campaign to curb excessive pay. They called on the government to establish a High Pay Commission.   The statement says: “The crisis we find ourselves in is one significantly caused by greed. The salaries of those at the top raced away while the median wage stagnated. … Continue reading

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Major losses at State rescued banks

Northern Rock, the nationalised bank, reported losses yesterday which had risen by 24%. The bank was nationalised in February 2008 because it was unable to fund its business in the money markets and customers were defaulting on their loans. It reported a total loss of £724.2m in the first six months of this year, which compared with a loss of … Continue reading

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Pound rises to its highest value against dollar for 10 months

At one point yesterday sterling rose to $1.6850 against the dollar – its highest level since the middle of October 2008. Although this is still well down on the $2 to the pound level seen last July, it does mean that the pound has risen by a quarter since January 2009. Sterling also rose against the euro to its highest … Continue reading

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Inflation Targeting: Learning the lessons from the financial crisis

On Tuesday of this week, Spencer Dale, Executive Director and Chief Economist at the Bank of England, used the above title as his talk to the Society of Business Economists, and I will try to summarise his main themes.   He noted that the sudden end to a long period of economic stability has led to the inflation targeting framework … Continue reading

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Lending to UK businesses remains weak

A study by the Bank of England entitled “Trends in Lending” has just been published. This shows that net lending to businesses has remained weak. The official data covers lending by all banks and building societies and shows that the monthly flow of net lending in March 2009 was “subdued, though positive.”  When looking at the three month annualised growth … Continue reading

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G20 is a hit, but Brown’s battleship stays afloat

“This is the day that the world came together to fight back against the global recession, not with words, but with a plan for global recovery and for reform and with a clear timetable for delivery,” was the way Gordon Brown summarised the outcome of the G20 summit in London.   According to the communiqué issued in the name of … Continue reading

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Flight of capital from the UK

Money held in UK banks on the behalf of foreign investors fell by just over $1 trillion or £707 billion over the last three quarters of 2008. These figures are classified as the external liabilities of the major banks operating in the UK. There was an outflow of funds amounting to $682.5 billion in the second quarter of 2008, followed … Continue reading

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It’s getting scary out there

So, interest rates are down to 0.5% and the Bank of England is given permission to begin “quantitative easing”. It is now considered nostalgic to look back to the balmy days of last summer and autumn (okay, so it rained most of the time) when interest rates were at 5% and we were all raising our eyebrows at the way … Continue reading

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