The Bank of England should keep interest rates on hold tomorrow due to uncertainty over Brexit, global trade tensions, and recent weak UK data, City A.M.’s shadow monetary policy (MPC) has argued. Read more: UK inflation falls to Bank of England target Ongoing uncertainty over how Brexit will turn out, and the increasing chances of “no deal” under a Boris Johnson premiership, mean Mark Carney’s Bank will most likely wait until changing anything in the economy. The raging US-China trade conflict has dragged down confidence worldwide. A rate hike would likely push up the pound, making UK exports less competitive at an already difficult time. Recent data from the UK economy has suggested momentum may be slowing. GDP fell by 0.4 per cent month on month in April, official figures showed. Today official statistics showed inflation cooled to two per cent in May from 2.1 per cent in April. What City A.M.’s shadow MPC decided Guest chair: Mike Bell, JP Morgan Asset … [Read more...] about Three reasons why the Bank of England won’t raise interest rates
Sets most policies concerning monetary policy and interest rates
US President Donald Trump's pick to fill a seat on the Federal Reserve board, Stephen Moore, has withdrawn from consideration after weeks of criticism over the economic commentator's shifting views on interest rate policy and sexist comments about women."Steve Moore, a great pro-growth economist and a truly fine person, has decided to withdraw from the Fed process," Trump said on Twitter on Thursday."Steve won the battle of ideas including Tax Cuts .... and deregulation which have produced non-inflationary prosperity for all Americans. I've asked Steve to work with me toward future economic growth in our Country."Just hours earlier, Moore had told Bloomberg TV that he was "all in" and that he expected to be nominated within three weeks.Moore, 59, was picked by Trump in March to fill one of two vacant positions at the Fed but had not been formally nominated.Trump's other pick for the Fed, former presidential candidate and businessman Herman Cain, withdrew from consideration in … [Read more...] about Trump Fed pick Moore withdraws candidacy
economic union and policies The Economic and Monetary Union (EMU) Members of the Eurozone ERM-II-member with opt-out (Denmark) EU-member with opt-out (United Kingdom) The rest of the EU-members The Economic and Monetary Union (EMU) is an umbrella term for the group of policies aimed at converging the economies of member states of the European Union at three stages. The policies cover the 19 eurozone states, as well as non-euro European Union states. Each stage of the EMU consists of progressively closer economic integration. Only once a state participates in the third stage it is permitted to adopt the euro as its official currency. As such, the third stage is largely synonymous with the eurozone. The euro convergence criteria are the set of requirements that needs to be fulfilled in order for a country to join the eurozone. An important element of this is participation for a minimum of two years in the European Exchange Rate … [Read more...] about Economic and Monetary Union of the European Union
The project was born in 2013 in Kazakhstan. Xi Jinping, China’s president, who was on a state visit to Astana, gave a lecture in which he proposed to create a “Silk Road Economic Belt,” in the spirit of the old trade route that crossed the Eurasian supercontinent 20 centuries ago. To an audience of students who looked only mildly interested, Xi promised “win-win” outcomes in trade operations based on “mutual trust”. He promised that China would never intervene in the internal affairs of the participating countries nor seek leadership in regional affairs. Fast forward six years. Today, the “One Belt, One Road” (Yidai, Yilu) project goes under the more investor-friendly name of the Belt and Road Initiative (BRI) and has 124 countries and 29 international organisations participating. The latest to sign preliminary agreements include G-7 member, Italy, and EU core member state Luxembourg. Thousands of infrastructure projects are … [Read more...] about How scary is the Chinese Belt and Road Initiative?
Gold has been making a comeback. After a long period with little activity last year, the precious metal’s value has risen as stock markets have struggled and fallen. Combine the volatility of equities with the increase in geopolitical fears, and many investors are re-evaluating whether to increase the amount of gold in their portfolios. The price is currently around $1,300 (£981) an ounce. Its value has been gradually rising since a low point of $1,176 in August, and peaked in February at around $1,343. It has dipped as the US dollar has strengthened – a stronger dollar makes the commodity more expensive for those buying with other currencies, putting pressure on the metal’s price. The price is also heavily tied to US interest rates. If rates rise, the dollar gets stronger and the value of gold decreases, because the metal doesn’t pay out a yield. In fact, it is technically a negative- yielding asset, because of the costs of physical storage. Due to this … [Read more...] about Gold, the Federal Reserve, and the dollar – what’s driving up precious metal prices?