Jannah Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.
United Kingdom

ALEX BRUMMER: Predictions that undermine confidence in the Bank of England

Forecasts that undermine trust: No one expects banks to manipulate forecasts, but the harm of bleak forecasts should not be underestimated, says ALEX BRUMMER

Not so long ago, central banks made decisions behind closed doors, with expert groups of Fed and Bank of England watchers making a living by predicting future movements.

At the time, it took six weeks for the minutes of the Open Market Committee meeting of the U.S. Federal Reserve to shed light on the interest rate decision.

In the Bank of England (before independence in 1997), it was the governor’s eyebrows and nods and winks from the Treasury that decided matters.

Under pressure: Bank of England boss Andrew Bailey

Gordon Brown puts an end to the 1990s Ken and Eddie Show. In a great bonhomie, Prime Minister Ken Clarke and Governor Eddie George tried to agree on mortgage payments.

There have been big changes in the last few decades. Central bank officials focus on clear communication with the goal of avoiding surprises. The mystery was removed and Fed Chairman Jay Powell and Bank Governor Andrew Bailey emerged from the temple to reveal their secrets to the assembled economic reporters, television cameras and social media.

Among the messages emerging from Thursday’s hearings is that the UK is predicted to enter its longest recession in a century.

Yet the bank continued to say activity might not be so weak after all because it doesn’t really believe the market forecasts for long-term interest rates.

No one expects the World Bank to manipulate its projections. But don’t underestimate the harm wrought by bleak forecasts. Business investments in the UK are terrible right now.

And it certainly won’t help if the governor throws a dark cloud over it. Nor will it benefit from Downing Street leaks about how companies and shareholders can expect higher taxes on profits and dividends.

So far, you might think that the combination of high energy costs and consumer prices, along with high mortgage rates, may have caused economic activity to get off track.

But despite the disappointment, there are current indicators that the country refuses to take on trauma.

Construction has rallied, boosted by homebuilding, with the S&P Purchasing Managers Index hitting a five-month high in November. Relentless dire forecasts are impacting new orders that are returning to pandemic levels.

Elsewhere, car sales rose for the third month in a row in October, even though the same month in 2021 was wiped out by supply bottlenecks.

A November 3 bulletin from the National Bureau of Statistics suggests that consumers are determined to defy consensus.

Retail traffic is up, online job ads are up significantly compared to pre-pandemic averages, petrol prices are 74% lower than the same week in 2021, UK flights are slowly increasing and are now 87% of the 2019 level. Despite the pessimistic narrative, optimism prevails.

master’s voice

China-based insurer Ping An is going from strength to strength in a battle to shake the UK’s largest bank, HSBC.

The company still wants to spin off its Asian operations, calls for more aggressive cost cutting, and complains that management lacks experience in Asia.

HSBC rejected criticism from 8.3% of shareholders, pointing to driving cost savings and enhancing returns on its stock.

Demand: Peace Goes Fierce in Battle to Rock HSBC

Demand: Peace Goes Fierce in Battle to Rock HSBC

HSBC Chairman Mark Tucker, who has extensive experience in China since his AIA days, could do worse than ignite peace.

Despite having shares listed in Shanghai and Hong Kong, the insurance company’s ownership structure is unclear.

But like all Chinese companies, Beijing has an enormous amount of control over public speech.

Who is really pulling the strings?

Dragon’s Den

Warner Bros. Discovery’s underperforming performance is a bright spot in Game of Thrones prequel House of the Dragons.

The extravagant series was premiered by Sky in August at London’s Leicester Square to great fanfare.

Most of the production took place at Leavesden Studios in Hertfordshire, with filming taking place in Cornwall.

The show will be broadcast by Sky Atlantic in the UK and HBO in the US.

Another commendable win for the burgeoning UK film and creative sector.


https://www.dailymail.co.uk/money/comment/article-11391345/ALEX-BRUMMER-Forecasts-blight-trust-Bank-England.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 ALEX BRUMMER: Predictions that undermine confidence in the Bank of England

Back to top button