The European Central Bank reduced its policy rate by 25 basis points on Thursday which, following the 25 basis-point rate reduction by the Bank of Canada on Wednesday, represents the first in what we expect will be a series of rate cuts by the G7 central banks this year. The moves in Europe and Canada ... READ MORE >
Risk in UK financial markets eases ahead of new government
The past few weeks in the U.K. financial markets have been extraordinary. The risk premium placed on the issuance of public and private debt has roiled both domestic and global financial markets. The demise of the Truss government and the prospect of a new prime minister with a more fiscally ... READ MORE >
RSM UK Financial Conditions Index implies rising risk of instability
The RSM UK Financial Conditions Index is warning of a dramatic increase in credit risk that, along with the depreciation of sterling, has the potential to derail commercial activity in the United Kingdom. Growing financial stress has exposed the difficulties that global central banks face in ... READ MORE >
Confusion has its cost: RSM UK Financial Conditions Index shows growing drag
The Bank of England announced on Wednesday that it would temporarily step in to purchase long-dated bonds to tamp down disorderly market conditions that have prevailed since the Truss government announced its plan to cut taxes. The £45 billion ($50 billion) plan comes on top of the government’s ... READ MORE >
European energy crisis: A quandary with no good policy options
Europe is facing a growing energy crisis as Russia cuts off natural gas supplies, leaving nations with no good policy choices to contain the fallout. The United Kingdom on Thursday announced a price cap that will freeze the average household’s energy bill at 2,500 pounds for two years. This scheme ... READ MORE >
RSM UK Financial Conditions Index: Holding steady
Financial conditions in the UK remain accommodative, signaling confidence that the policies of the monetary and fiscal authorities have created the framework for a sustained economic recovery. Ahead of the Bank of England’s critical decisions on policy normalization on Thursday, this should provide ... READ MORE >
Bank of England’s Monetary Policy Committee to focus on economic risk as energy prices surge
Rising energy prices will weigh on consumer spending and gross domestic product growth in the U.K. next year. At its meeting on Thursday, the Bank of England’s Monetary Policy Committee should be more concerned about the negative impact on the economic recovery from soaring energy prices than about the ... READ MORE >
RSM UK Financial Conditions Index remains stout despite risk of virus resurgence
The Bank of England maintained its accommodative policy stance in its announcement on Aug. 5, keeping short-term interest rates at the zero-bound while continuing to put downward pressure on long-term interest rates through purchases and holdings of fixed-income securities. As a result, our RSM UK ... READ MORE >