UK News ALEX BRUMMER: Bank Governor Bailey worried by inflation bogey

03:20  24 september  2021
03:20  24 september  2021 Source:   dailymail.co.uk

How investors can combat rising inflation

  How investors can combat rising inflation The UK's inflation rate jumped to 3.2 per cent in August, the biggest monthly increase since records began. The Bank of England believes the spike will pass, but many are questioning if central banks are taking the rising cost of living seriously enough - and it seems the wealthy may be too complacent too, with more than half saying they were unconcerned about inflation. © Provided by This Is Money ( While the market is now pricing two Bank of England interest rate hikes next year, the rising cost of living for UK households is starting to feel noticeably sharper.

Daily Mail 12/10/2020 Alex Brummer for the Daily Mail. © Provided by This Is Money MailOnline logo. © Provided by This Is Money From the start of the pandemic, Andrew Bailey , in his first fraught year as governor of the Bank of England, has made it clear he wants to do all he can to prevent scarring to the economy. It has been demonstrated in Japan, the EU and among the Nordic nations that negative rates, which make it more attractive for banks to lend rather than hoard money, can work.

Get the BoE Gov Bailey Speaks results in real time as they're announced and see the immediate global market impact. As head of the BOE's Monetary Policy Committee (MPC) which controls short term interest rates, Bailey has more influence over sterling's value than any other person. Traders scrutinize his public engagements for clues regarding future monetary policy. His comments may spark a short-term positive or negative trend.

a man wearing glasses and looking at the camera: MailOnline logo © Provided by This Is Money MailOnline logo

The Bank of England rarely acts before the Budget when it has a more precise fix on the fiscal, output and jobs outlook. The judgment at the September Monetary Policy Committee session was difficult as it comes before the furlough scheme is fully unwound, in the midst of an energy emergency.

This time around the Bank is one step ahead of the Federal Reserve by suggesting that price pressures may be moving out of the transitory stage and becoming more 'persistent'.

It has raised its inflation forecast for the year to just above 4 per cent. Two members of the committee, outsider Michael Saunders and perhaps more significantly insider Dave Ramsden, a former Treasury mandarin, have underlined concerns by voting against more bond buying. That is technically insignificant because the Bank's quantitative easing is all but over.

Strictly's Oti Mabuse reunites with Bill Bailey

  Strictly's Oti Mabuse reunites with Bill Bailey The professional dancer, 31, and the comedian, 56, took home the glitterball trophy during last year's series and recreated one of their final performances for the debut show.The professional dancer, 31, and the comedian, 56, took home the glitterball trophy during last year's series and recreated their memorable week four dance to Rapper's Delight for the debut show.

When it involves the Governor of the Bank of England and a former Appeal Court justice, it becomes destructive. Raising questions over the reliability of Andrew Bailey at a moment when the Bank is propping up the pandemic economy with £875billion of bond buying is not a good look. Rather than leave Bailey to twist in the wind, the Court needs to establish a course of action which underpins the integrity of the role of Governor . Bailey and the Court also need to recognise that mistakes made when he was chief executive of the FCA – including the implosion in the Neil Woodford investment empire

Bank of England governor Andrew Bailey (pictured) has the rare skill of turning the specific into the general. At first glance the Governor of the Bank of England's speech this week, entitled Meeting Varied People, was all about diversity. Bailey took matters a step further, pointing out that were it not for the Old Lady's willingness to seek counsel from a wide range of sources, the Covid Corporate Funding Facility could not have been rolled out so rapidly. He rallied to the defence of successive governments by suggesting that the antidote to the problem of lobbying would be to 'speak to no one'.

( © Provided by This Is Money (

It is hard not to fear inflation, given what is happening in the economy. The lack of HGV drivers is pushing up food costs. It could be argued that the takeover battle for Morrisons is a significant event because the private equity buyers have spotted that the fight of the UK supermarkets with the German discounters, which led to a never-ending price war, may be ending.

The real story is energy costs. If wholesale gas prices are high in September, when demand for power in northern Europe is relatively modest, imagine what tariffs are going to look like as we move into winter.

History shows energy costs feed into the sinews of an economy and that is being seen in steel prices, which feed into everything from cars to construction. All industrial production will feel pain. As prices rise the UK could experience the wage-price spiral that stymied governments in the past.

'Stagflation' threat puts heat on Bank of England's rate decision

  'Stagflation' threat puts heat on Bank of England's rate decision The rate-setting Monetary Policy Committee is set to announce the results of its September meeting Thursday but disappointing economic data combined with rising inflation are causing furrowed brows.The central bank’s rate-setting Monetary Policy Committee (MPC) is set to announce the results of its September meeting on Thursday but disappointing economic data and rising inflation are causing furrowed brows across the City.

Forecasts by the Bank of England of a ‘V’ shaped recovery were met with predictable scepticism as the pandemic made its reappearance early this year. If the latest projections are believed, that is precisely what is going to happen, with output set to soar away by 7.25 per cent this year leaving jobs relatively unscathed. The strength of the rebound means that all of last year’s talk of moving towards negative interest rates has melted away. Instead, the debate has moved onto the timing of when Britain will need to move interest rates up to counter inflation . The MPC believes that the perceived inflation scare

ALEX BRUMMER : Chancellor Rishi Sunak's Covid-19 rescue package for Britain's hard-pressed businesses - big corporations and smaller enterprises - is startling in both scale and ambition. ALEX BRUMMER : Yes, Rishi Sunak delivered a mighty boost to business owners worried about the coronavirus fallout - but can we really trust bosses to borrow billions to put into their workers' pockets?

All of this poses a terrible dilemma for policymakers. The last thing the economy needs at present is tighter money and raising interest rates from the current low of 0.1 per cent. Western nations have done a great job of shielding citizens and enterprises from Covid and have learned the lessons of previous economic shocks by dishing out fiscal and monetary largesse.

They don't want to stymie the recovery by pressing hard on the brakes. A readjustment is under way. The decision to raise national insurance contributions on employers, employees and pensioners in work amounts to a mini-budget and is a big strain on family incomes and business.

Interest rate-setters are doing their best not to upset the apple cart by raising borrowing costs. The US Federal Reserve has moved the goalposts by signalling a rise in the federal funds rate in 2022.

The Bank is holding back. But if the energy scare carries on and average wage costs continue to soar it may have no other choice. Andrew Bailey won't want to be seen as the Governor responsible for unleashing an inflation bogey.

Bridgerton series 2: Phoebe Dynevor and Jonathan Bailey on set

  Bridgerton series 2: Phoebe Dynevor and Jonathan Bailey on set Phoebe Dynevor [Daphne Bridgerton] and her on-screen brother Johnathan Bailey [Anthony Bridgerton] were spotted on set on Monday.Yet the defiant cast and crew returned to filming on Monday, as actors including leading lady Phoebe Dynevor [Daphne Bridgerton] and her on-screen brother Jonathan Bailey [Anthony Bridgerton] were spotted on set.

By Alex Brummer for the Daily Mail. Bank of England Governor Andrew Bailey disclosed at the financial policy committee press conference that there was no progress in discussions with the EU on regulatory ‘equivalence’ for UK firms and platforms. Britain is pledging to maintain the highest governance standards but France believes it can win back a share of the vast City derivatives trade for Paris.

By ALEX BRUMMER . Last updated at 23:03 19 September 2007. The American decision to slash its key interest rate by half a point has been greeted joyously by financial markets. Share prices in London, New York and the Far East have soared; the queues of desperate savers outside Northern Rock Above all, the Northern Rock crisis has forced a major policy U-turn by the Bank of England. Before the run on Northern Rock, governor Mervyn King was adamant that he had to impose "tough love" - a noninterventionist approach to the financial markets. As part of his fight to keep a lid on inflation , and

Bid gridlock

After a 99.8 per cent shareholder vote in favour of the £6.3billion offer for aerospace engineer Meggitt, 'Sir Sell-Off' Nigel Rudd looked home and dry.

This was no Melrose-GKN battle where the buyer scraped through on a narrow majority. Meggitt buyer Parker Hannifin could also point out that it is no stranger to UK aerospace and already is a trusted supplier to Rolls-Royce.

Be that as it may, the approach of Boris Johnson's government to overseas takeovers of UK prize assets is very different to that of predecessors.

No longer can predators, private equity or trade buyers, regard scrutiny by Government and regulators as routine.

At present the Government is seeking to secure undertakings from Parker Hannifin on the future of Meggitt tech. That won't be enough and this deal is heading to the Competition and Markets Authority.

Rudd, colleagues and investors may face a long wait for their payday.

Wheel of fortune

Amid all the excitement about the £14billion value placed on Entain it is easy to overlook where the code and technology for online gambling came from.

London-quoted Playtech played a key role in Ladbrokes' transformation and currently is working alongside Parx Casino in Michigan, Bet365 and Entain partner Bet MGM in New Jersey.

Profits jumped more than 1,000 per cent in the past six months and even after a rise in the shares it is still worth just £1.4billion. Curious!

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Inflation is the enemy of wealth and cash savings are suffering .
Investing in shares has been proven time and again to be your best chance of beating inflation. Even if you only do this with some of your money, that's something.First up came Gatehouse Bank’s new 1.51 per cent one-year fixed savings bond – that’s the first time a 12-month rate has nudged past the 1.5 per cent mark since May 2020.

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