uly 29 (Reuters) – British finance minister George Osborne on Thursday said there was no tacit agreement with the Bank of England’s governor Mervyn King on keeping interest rates low. (Reporting by Sumeet Desai)
June 11 (Reuters) – The Bank of England bought 107 million pounds of corporate bonds in the week to June 10 and sold 11 million pounds worth, taking total holdings under its secondary market scheme to 1.521 billion pounds.
The BoE said in a regular update on Friday that no purchases of commercial paper took place, leaving total holdings at 1 million pounds.
Gilt holdings remained constant at 198.275 billion pounds, purchased between March 2009 and January 2010.
The BoE completed a planned 200 billion pounds of quantitative easing asset purchases at the end of January and has given no indication it wants to change these holdings in the short term.
Sales and purchases of commercial paper and corporate bonds are aimed at ensuring market liquidity and do not have a monetary policy objective.
(editing by John Stonestreet)
LONDON, April 8 (Reuters) – European shares are set to open lower on
Thursday, tracking falls on Wall Street and Asia, with direction likely to be
dictated by interest rate decisions from the Bank of England (BoE) and the
European Central Bank (ECB) later in the session.
Britain’s FTSE 100 .FTSE is expected to open 25 to 28 points lower, or
down as much as 0.5 percent; Germany’s DAX .GDAXI is seen opening down 17 to
21 points, or as much as 0.3 percent; and France’s CAC 40 .FCHI is expected to
open 20 to 26 points lower or as much as 0.7 percent.
Some worries over Greece’s fiscal problems are also likely to weigh on
equities. Concerns over Greece put pressure on the euro, which ground closer to
this year’s low against the dollar on Thursday as investors grew increasingly
sceptical of the country’s ability to end its debt crisis.
The ECB is expected to do its bit to ease the financial squeeze on Greece on
Thursday by fleshing out new lending rules and keeping euro zone interest rates
at a record low of 1.0 percent.
The ECB’s rate decision is expected at 1145 GMT, followed by a news
conference at 1230 GMT.
Meanwhile, economists expect the BoE to keep interest rates at 0.5 percent
and not to add to the 200 billion pounds of asset purchases made under its
quantitative easing programme as inflation eased in line with central bank
forecasts this month and growth remains uncertain. A rate announcement is
expected at 1100 GMT.
———————-MARKET SNAPSHOT AT 514 GMT———————-
LAST PCT CHG NET CHG
S&P 500 .SPX 1,182.45 -0.59 % -6.99
NIKKEI .N225 11,171.06 -1.08 % -121.77
MSCI ASIA EX-JP .MIASJ0000PUS 503.97 -0.75 % -3.83
EUR/USD EUR= 1.3332 -0.01 % -0.0002
USD/JPY JPY= 93.20 -0.06 % -0.0600
10-YR US TSY YLD US10YT=RR 3.876 — 0.01
10-YR BUND YLD EU10YT=RR 3.101 — -0.02
SPOT GOLD XAU= $1,146.00 -0.09 % -$1.00
US CRUDE CLc1 $85.83 -0.06 % -0.05
US STOCKS-Wall St slides on rate angst; airlines up late [ID:nN07136898]
GLOBAL MARKETS-Asia stocks down after strong gains, euro off [ID:nSGE637040]
Nikkei dips, exporters slip on stronger yen [ID:nTOE63701O]
Oil falls 2nd day as dollar, U.S. crude inventories up [ID:nSGE63706J]
TREASURIES-Bonds rally on record 10Y sale, Greece worries [ID:nN07107282]
METALS-LME copper falls 0.7 pct, drags Shanghai lower [ID:nSGE63705F]
PRECIOUS-Gold falls from 3-month high on firm dlr [ID:nSGE63705A]
(Reporting by Harpreet Bhal; Editing by Mike Nesbit)
LONDON, April 20 (Reuters) – It was “crass nonsense” to believe the economic crisis was impossible to predict, Bank of England policymaker David Blanchflower said in an interview to be broadcast on Monday.
The arch dove considered resigning over what he viewed as an overly optimistic report on the economy released by the British central bank last August, according to extracts of a Channel 4 television interview published in two newspapers.
Blanchflower, who steps down from the bank’s rate-setting Monetary Policy Committee at the end of next month, said the bank’s inflation report was based on “wishful thinking”.
“I decided that a severe recession was coming and that the report was just completely wrong,” Blanchflower told the “Dispatches” programme, according to the Guardian and Daily Mail newspapers. “I kept thinking: ‘Am I wrong? If I am so wrong then I ought to just quit’.”
Asked whether it would have made a material difference if the central bank had cut rates sooner, he told the programme: “Yes”.
Blanchflower’s comments come before British finance minister Alistair Darling makes what is widely expected to be one of the bleakest annual budget announcements in years on Wednesday.
Britain’s economy entered recession at the end of 2008, shrinking at the fastest pace since 1980 in the three months to December. Business groups and unions last year accused the bank of being too slow to respond to the crisis with rate cuts.
Although the bank went on to cut rates to an historic low of 0.5 percent, Blanchflower has previously described its policy of failing to be sufficiently forward looking. (Reporting by Peter Griffiths; Editing by Jan Dahinten)
The Cable continues to show relative strength on the back of surprisingly positive data surfacing from Britain over the past couple weeks. The GBP/USD kept its cool yesterday despite the broad selloff in U. S. equities and the Cable is running with the EUR/USD and U. S. equities Wednesday morning.
We expect to see the Cable’s strength continue as long as Britain’s data outperforms and its major financial institutions stay out of the headlines. If U. S. equities and the EUR/USD head north today, the GBP/USD should follow. On the other hand, if U. S. equities selloff again, we may see the Cable hold up once more.
However, we can’t forget the importance of the financial industry to Britain’s economy. Therefore, if U. S. banks hit another roadblock, the GBP/USD may have no choice but to head lower. Speculation set aside, the Cable is in great shape for the time being. It sits comfortably above our 1st tie uptrend line with no downtrend line in sight.
On the other hand, the failure of the GBP/USD to eclipse February highs and 1.50 is a cause for concern, and we’ll keep this in mind. If the Cable can climb back above March highs today we could see a nice short-term pop.
Even though Britain is quite on the news front today, the Pound could come alive tomorrow with a PPI release coupled with a BOE rate decision. Analysts are expecting the BOE to hold the benchmark rate at .50%. Fundamentally, we maintain resistance of 1.4730 with additional resistances hanging at 1.4770, 1.4834, 1.4883 and 1.4946.
The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we hold our supports of 1.4676, 1.4612, 1.4571, 1.4538 and 1.4484. The GBP/USD is currently exchanging at 1.4702.
GBP/USD Daily Commentary for 4.8.09
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The decision to cut rates by half a percentage point by the bank’s Monetary Policy Committee (MPC) brings borrowing costs below 2 per cent for the first time since the BoE was founded in 1694.
The move came hard on the heels of a drastic rate cut in December. (dpa)
London – The Bank of England (BoE) said in a report published Tuesday that losses suffered by global financial institutions since the credit crunch are estimated at 1.8 trillion pounds (2.8 trillion dollars).
Governments around the world have spent more than 750 billion pounds so far in coming to the aid of banks, the bank’s biannual Financial Stability Report (FSR) said.
It warned that while pressure in money markets had eased slightly since the major government bail-outs, risks remained from highly borrowed hedge funds, which might have to sell assets quickly to meet rising costs, and insurers whose capital base could be eroded by falling share prices.
According to the report, up to 1.2 million homeowners in Britain could fall into negative equity if house prices fall by another 15 per cent over the coming months.
British banks faced a “fundamental rethink” as a result of the current crisis and would have to accept a tightening of regulation, the BoE said.
The industry expanded too far in the good times without strong enough funding to cope when things turned sour, the report said.
To avoid a repeat of the banking crisis, banks could be reined in through a series of measures to ensure they had enough funds to survive without help during a downturn, it added.(dpa)