Government Policy

  • 2019-03-13 09:35

    -Hammond: Brexit Uncertainty Damaging UK Economy; Can't Go On

    LONDON (MNI) - UK growth forecasts for the current year were cut to 1.2% by the Office for Budget Responsibility from the 1.6% forecast in October, Chancellor of the Exchequer Philip Hammond told Parliament Wednesday.

    Unveiling his Spring Statement, comprising an updated set of forecasts from the OBR, Hammond said that uncertainty was still hanging over the UK and "We cannot allow that to continue: It is damaging our economy."

    The OBR, like the BOE, bases its forecasts on the assumption that there will be a smooth Brexit. On this basis, the OBR's growth forecasts were little changed from October while it predicted a slight improvement in the public finances.

  • 2019-03-05 13:00

    -Carney Says CPIH Is Tracking Well; Favours Transition Period

    LONDON (MNI) - Bank of England Governor Mark Carney gave evidence at the House of Lords Economic Affairs committee Tuesday.

    The following are key points from his testimony:

    -Carney endorsed the idea of ditching the retail prices index (RPI) and stopping issuing RPI linked gilts and backed creating a new inflation linked gilt market.

    He said that moving to a single inflation measure was "highly desirable."

    There is an open debate over which measure should be used, such as CPI, or CPIH or another "democratic" measure.

    Carney praised the way CPIH deals with housing costs, through imputed rents, saying it was "tracking well" and added that it was "the most promising" according

  • 2019-01-28 16:00

    WASHINGTON (MNI) - The U.S. Treasury Monday estimated it will borrow $365 billion of net marketable debt in the first quarter of 2019, assuming a $320 billion cash balance on March 31.

    Previously, the Treasury estimated it would borrow $356 billion in the quarter, with a $320 billion cash balance at the end of March.

    The larger borrowing estimate was "driven primarily by a lower than previously assumed opening cash balance," the Treasury said.

    In the fourth quarter of 2018, Treasury borrowed $426 billion, while the end-of-quarter cash balance was $402 billion.

  • 2019-01-16 20:01

    -Lords Economic Affairs Member Tells MNI DMO Case Against CPI Issuance Unconvincing

    LONDON (MNI) - The UK should issue inflation-linked treasury bonds using consumer price index inflation and not the outdated retail price index measure, the House of Lords Economic Affairs committee said in a report published Thursday.

    Committee member John Sharkey told MNI he was unpersuaded by the concern raised by Debt Management Office head Robert Stheeman that issuing CPI-linked gilts would cause the UK linker market to fragment.

    With the UK in political turmoil at present, however, Sharkey said that it was hard to predict when any switch to CPI issuance would actually take place.

    The UK has three main estimates of consumer price inflation, the Consumer Prices

  • 2019-01-16 15:00

    WASHINGTON (MNI) - The following is the text of the summary section of the Federal Reserve's summary of economic conditions report, or Beige Book, released Wednesday:

    Overall Economic Activity

    Economic activity increased in most of the U.S., with eight of twelve Federal Reserve Districts reporting modest to moderate growth. Nonauto retail sales grew modestly, as several Districts reported more holiday traffic compared with last year. Auto sales were flat on balance. The majority of Districts indicated that manufacturing expanded, but that growth had slowed, particularly in the auto and energy sectors. New home construction and existing home sales were little changed, with several Districts reporting that sales were limited by rising prices and low inventory.

  • 2018-12-12 03:52

    BEIJING (MNI) - China had no information to share yet on the detainment of former Canadian diplomat Michael Kovrig in China this week, foreign ministry spokesman Lu Kang said when pressed by reporters Wednesday

    "I have nothing to provide on the media reports," Lu said when asked.

    Several media reports cited the International Crisis Group saying that its North East Asia Senior Adviser Kovrig has been detained in China.

    The unconfirmed reports of Kovrig's detention on Monday came out as a Canadian court weighed whether to grant bail -- subsequently granted on Tuesday

    -- to Meng Wanzhou,a senior executive at Chinese tech giant Huawei, who was held

    in Vancouver under a U.S.

  • 2018-12-07 07:49

    By Luke Heighton

    FRANKFURT (MNI) - Brexit will likely lead to a de-liberalization of trade in services and a drop in real consumption for both the UK and Europe -- regardless of any bilateral agreements reached, a study published by Germany's Bundesbank claimed Friday.

    Here are the key points from the paper (which do not necessarily reflect the opinion of the Deutsche Bundesbank or the Eurosystem).

    -- In the event of a hard Brexit with no preferential market access for services between Britain and the EU, the UK would experience a 0.33% drop in real consumption, simulations based on 2014 data showed.

    -- Real wages and real dividends in service sectors would see falls of a similar order, averaging 0.38% and 0.32% respectively.

  • 2018-12-05 11:30

    --Hard For BOE To Provide Monetary Stimulus On No Deal Scenario: Hammond

    LONDON (MNI) - In the event of a 'no deal' Brexit for the UK, fiscal, not monetary, policy would be the primary vehicle to try and offset the economic hit, Chancellor of the Exchequer Philip Hammond told the Treasury Committee Wednesday.

    Hammond was giving evidence on the government economic service's Brexit scenarios, which were released Wednesday, along with the Bank of England's work on Brexit.

    The following are key points from Hammond's evidence:

    --All the Treasury Brexit scenarios showed a higher debt-to-GDP compared to remaining in the EU. Hammond was asked if it was, therefore, misleading to talk about a "Brexit dividend" for the public finances.

  • 2018-11-28 14:18

    By David Robinson

    LONDON (MNI) - Brexit will be primarily a supply shock to the UK economy and departing the EU without a deal could force Bank Rate sharply higher, the Bank of England assumed in its scenario analysis published on Wednesday.

    Its assumptions come with a host of caveats, including that there is no offsetting fiscal stimulus. Nevertheless, the Bank's analysis hammers home how it cannot be assumed monetary policy will be eased if the government cannot get its proposed withdrawal deal through parliament.

    In its worst case disorderly Brexit scenario, with lots of border friction, no transition and no deal, the BOE showed Bank Rate rising from its current 0.75% to 5.5% and averaging 4.0% over the three subsequent years.

  • 2018-11-23 09:27

    By Luke Heighton

    FRANKFURT (MNI) - Talks over the eurozone's Capital Markets Union and the completion of the Banking Union are being held up by "technical nit-picking, with self-satisfaction from some, disparagement from others, and distrust on all sides", the head of the Central Bank of France said Friday.

    However Paris stands ready to inherit London's role at the centre of the global derivatives market as Europe restructures its financial system post-Brexit, Francois Villeroy de Galhau added.

    Here are the key points from the speech in Paris:

    -- Banque de France analysis supports research by the ECB and the Bank of England which did not identify any major risks to eurozone financial stability from an orderly Brexit.

    -- In the event of a No-Deal Brexit, the c