Today’s UK budget is called ‘the budget for growth’ with the four E’s of enterprise, education, employment, and everywhere. Jeremy Hunt heavily trailed the latter in a speech he made at Bloomberg’s offices in January. Many of the proposals in the Budget were as expected and were known by the media. In other words, there …
The extraordinarily low-interest rate era is ending – what are the implications for financial markets and policymakers?
Following a sharp rise in inflation precipitated initially by the supply-side disruption as the pandemic ended and supply lagged demand, then the Russian invasion of Ukraine, central banks are tightening policy. The US Federal Reserve is at the forefront of this charge, raising interest rates at the fastest pace since the 1980s. There is no …
The impact of negative rates
With negative rates in Europe (the ECB deposit rate is -0.5% though the lending rate is zero), Switzerland and Japan, how low can rates go in the UK? The answer is that they can go lower, which means negative. The Bank of England is currently studying how that would work in practice, with the Governor …