Ever since the Brexit vote, financial markets have had an uneasy relationship with the UK. The pound fell sharply after the vote to leave the European Union in June 2016, which surprised many in the City, and since then, UK financial markets have been volatile, trying to price in the consequences of this decision.Continue reading
Liz Truss, the favourite in the race to succeed Boris Johnson as prime minister, has laid the blame for inflation at the door of the Bank of England, saying it must do more to fight price rises.
Truss also said she would change the Bank of England’s mandate if she becomes prime minister, to ensure that the central bank fights inflation more efficiently, but gave no details about what that change would entail.
With consumer price inflation hitting a 40-year high of 9.4% in June, you may think she has a point. The Bank of England is behind the curve, but when it comes to changing the central bank’s mandate, I really hope Liz Truss is lying. If she is not, then we should all be very afraid.Continue reading
The return of inflation has taken a lot of people by surprise, although it should not have done. Worryingly, even central banks have acted quite surprised by the abrupt rise in prices, when they should have expected it.Continue reading
It looks like the old saying “Sell in May and go away” has just been turned on its head. After cratering for seven weeks, the S&P 500 index ended last week up 6.6%Continue reading
While all eyes are on what central banks will do with interest rates, consumers and investors alike should really worry about what commercial banks will do.Continue reading
European stock markets recouped all the ground lost since the February 24 Russian invasion of Ukraine, but investor optimism may be misplaced.Continue reading
The Bank of England has ignored inflation for so long that is now clearly behind the curve, and getting more and more desperate to catch up.
But the central bank is in danger of scuppering its own purpose by ignoring another big change to the economy: Brexit.Continue reading
Those who worry that the extraordinary stock market rally will come to an end in 2022 may be worrying too soon: equities could still power ahead, and particularly so in Europe.Continue reading
Inflation is here to stay, rather than transitory, no matter what central banks are telling us. But rising inflation could help make the global economy more efficient. Here are three potentially positive consequences of high inflation:Continue reading
After Brexit, the UK seems to be jumping randomly from one crisis to the next, and the government seems strangely unperturbed by the general distress.
Partly, this can be attributed to the politicians’ own failure to learn. Prime Minister Boris Johnson has proven again and again that he is prone to repeating past mistakes — the way he handled the multiple lockdowns in the Covid-19 crisis is the best example of this.
But what if at least part of it is deliberate? There could be a couple of reasons for which crises suit Johnson and his government very well, at least for a while.Continue reading