The Bank of England on Friday said that financial service faced 'some disruption' when the transition period for Brexit ends at the end of this month. Although the Bank of England said that banks in UK were resilient to the risk of Brexit and coronavirus, the warning given by the bank is likely to be noted in the financial world.

Bank of England's Financial Policy Committee, which is tasked with safeguarding the financial system added that major British banks were capable of absorbing USD 266 billion (200 billion Pounds) in credit losses.

Britain and the European Union are still locked in negotiations over Brexit trade deal. The negotiations have not made much progress. Both sides have kept a deadline ending this Sunday (December 13)

On Friday, UK Prime Minister Boris Johnson said that a no-deal Brexit was a possibility although he vowed to explore all ways to strike a trade deal.

After a meeting with his senior ministers, Johnson said the treaty on the table did not work for Britain.

"We need to be very, very clear there's now a strong possibility, strong possibility that we will have a solution that's much more like an Australian relationship with the EU, than a Canadian relationship with the EU," Johnson said.

Also Read | <a href="https://www.wionews.com/world/strong-possibility-of-no-deal-brexit-uk-pm-boris-johnson-348945">Strong possibility of no-deal Brexit: UK PM Boris Johnson</a>

Australia does not have comprehensive trade deal with EU. Although Australia's trade with EU is just fraction of that of Britain, Johnson apparently is drawing simile to suggest that a deal was not necessary.

Negotiations between UK and the EU are stuck over fishing rights, competition rules and economic fair play.

The Bank of England on Friday said that financial service faced 'some disruption' when the transition period for Brexit ends at the end of this month. Although the Bank of England said that banks in UK were resilient to the risk of Brexit and coronavirus, the warning given by the bank is likely to be noted in the financial world.

The Bank of England on Friday said that financial service faced 'some disruption' when the transition period for Brexit ends at the end of this month. Although the Bank of England said that banks in UK were resilient to the risk of Brexit and coronavirus, the warning given by the bank is likely to be noted in the financial world. Bank of England's Financial Policy Committee, which is tasked with safeguarding the financial system added that major British banks were capable of absorbing USD 266 billion (200 billion Pounds) in credit losses. Britain and the European Union are still locked in negotiations over Brexit trade deal. The negotiations have not made much progress. Both sides have kept a deadline ending this Sunday (December 13) On Friday, UK Prime Minister Boris Johnson said that a no-deal Brexit was a possibility although he vowed to explore all ways to strike a trade deal. After a meeting with his senior ministers, Johnson said the treaty on the table did not work for Britain. "We need to be very, very clear there's now a strong possibility, strong possibility that we will have a solution that's much more like an Australian relationship with the EU, than a Canadian relationship with the EU," Johnson said. Also Read | Strong possibility of no-deal Brexit: UK PM Boris Johnson Australia does not have comprehensive trade deal with EU. Although Australia's trade with EU is just fraction of that of Britain, Johnson apparently is drawing simile to suggest that a deal was not necessary. Negotiations between UK and the EU are stuck over fishing rights, competition rules and economic fair play.

Brexit: Bank of England talks of 'disruption' in financial services in new year

Markets have recovered their poise after bouts of extreme volatility in March caused by the coronavirus pandemic that left "hard questions" for policymakers to answer, a senior Bank of England official said on Thursday.

"Financial markets could come under strain again if there is another leg to the global infection cycle, or if economic data come out persistently worse than expected," Andrew Hauser, the BoE's executive director for markets, told a Bloomberg webinar.

<a href="https://www.wionews.com/world/new-study-says-trump-backed-hydroxychloroquine-no-better-than-placebo-303250">Also read:&nbsp;New study says Trump-backed hydroxychloroquine no better than placebo</a>

Hauser said policymakers need to look at how markets can amplify the "dash for cash" seen in March and April. 
"First, do we understand why intermediaries struggled to make effective markets in core government bond, money and foreign exchange instruments at crucial moments during the crisis?" Hauser said.

Policymakers should also ask themselves if they are comfortable with the core role played by heavily indebted but thinly capitalised non-banks in markets.

"Third, how do we deal with the risks posed to financial stability by the structural tendency for money market and some other open-ended funds to be prone to runs," Hauser said.

Also read |&nbsp;<a href="https://www.wionews.com/world/after-temporary-pause-who-to-resume-hydroxychloroquine-trials-303045">After 'temporary pause', WHO to resume hydroxychloroquine trials</a>

"How can we ensure timely transition away from Libor, whose weaknesses were highlighted so starkly by the crisis?" 
Markets have had to absorb huge policy interventions to ease economic fallout from the pandemic. That included the BoE cutting interest rates to just 10 basis points, raising expectations of negative rates.

"Even if you saw it was the right thing to do, it`s not going to happen in the near term," Hauser said. "It`s on the retail side and banking side that we need to think more about it, and no decisions have been made about that either way."

Hauser said public intervention intentionally lifted assets from very low levels, but the central bank does not want to replace the role of markets in pricing and would come up with an "exit path" once the economy is strong enough. 
"We had to do it, it was the right thing to do. It worked and we have to deal with the consequences of that later."

Markets have recovered their poise after bouts of extreme volatility in March caused by the coronavirus pandemic that left "hard questions" for policymakers to answer, a senior Bank of England official said on Thursday.

Markets have recovered their poise after bouts of extreme volatility in March caused by the coronavirus pandemic that left "hard questions" for policymakers to answer, a senior Bank of England official said on Thursday. "Financial markets could come under strain again if there is another leg to the global infection cycle, or if economic data come out persistently worse than expected," Andrew Hauser, the BoE's executive director for markets, told a Bloomberg webinar. Also read: New study says Trump-backed hydroxychloroquine no better than placebo Hauser said policymakers need to look at how markets can amplify the "dash for cash" seen in March and April. "First, do we understand why intermediaries struggled to make effective markets in core government bond, money and foreign exchange instruments at crucial moments during the crisis?" Hauser said. Policymakers should also ask themselves if they are comfortable with the core role played by heavily indebted but thinly capitalised non-banks in markets. "Third, how do we deal with the risks posed to financial stability by the structural tendency for money market and some other open-ended funds to be prone to runs," Hauser said. Also read | After 'temporary pause', WHO to resume hydroxychloroquine trials "How can we ensure timely transition away from Libor, whose weaknesses were highlighted so starkly by the crisis?" Markets have had to absorb huge policy interventions to ease economic fallout from the pandemic. That included the BoE cutting interest rates to just 10 basis points, raising expectations of negative rates. "Even if you saw it was the right thing to do, it`s not going to happen in the near term," Hauser said. "It`s on the retail side and banking side that we need to think more about it, and no decisions have been made about that either way." Hauser said public intervention intentionally lifted assets from very low levels, but the central bank does not want to replace the role of markets in pricing and would come up with an "exit path" once the economy is strong enough. "We had to do it, it was the right thing to do. It worked and we have to deal with the consequences of that later."

Pandemic raises hard questions for policymakers, Bank of England says

Seven global central banks, led by the Bank of England will consider adopting cryptocurrencies. This report from Gravitas tells you how leading countries are looking at ways to adopt cryptos into their financial systems.

Gravitas: 7 Global Central Banks could adopt Cryptocurrencies

Asian shares rose to new 19-month highs on Monday ahead of the expected signing on <a href="https://www.wionews.com/world/details-of-us-china-deal-to-be-published-after-signing-white-house-273483">Phase One</a>&nbsp;China-US&nbsp;trade deal, although markets have yet to see the details of the agreement.

<a href="https://www.wionews.com/business-economy/nifty-sensex-headed-for-weekly-gain-as-mideast-tensions-ease-273346">MSCI's broadest index</a> of Asia-Pacific shares outside Japan was 0.47 per cent&nbsp;higher, touching its highest point since June 2018. Japanese markets were closed for a holiday.

South Korea's trade-sensitive Kospi added 0.73 per cent&nbsp;and Hong Kong's Hang Seng was up 0.74 per cent, while Taiwan shares added 0.6 per cent&nbsp;in the first trading day after Taiwanese re-elected President <a href="https://www.wionews.com/world/hong-kongs-strengths-as-global-financial-hub-intact-despite-protests-carrie-lam-273828">Tsai Ing-wen</a> by a landslide on Saturday.

Mainland Chinese shares lagged the regional index after China's major equity indexes logged their sixth consecutive weekly rise last week, the longest such streak since the first quarter of 2019.

The benchmark <a href="https://www.wionews.com/business-economy/sensex-jumps-634-points-as-us-iran-tensions-ease-auto-and-realty-stocks-gain-273229">Shanghai Composite Index</a> ended the morning session up just 0.06 per cent.

Investors in China are looking ahead to trade and economic growth data due this week, which is expected to shed more light on some early signs of economic improvement after the country logged its slowest pace of growth in nearly three decades in the third quarter.

Japan's <a href="https://www.wionews.com/business-economy/asian-shares-erase-losses-as-mideast-tensions-ease-oil-ticks-up-273093">Nikkei</a> was closed for a holiday. It fell sharply early last week when Iran attacked bases hosting US&nbsp;military in Iraq, only to rally almost a thousand points when the two countries stepped back from hostilities.

E-Mini futures for the <a href="https://www.wionews.com/business-economy/global-markets-stocks-march-back-to-record-highs-as-middle-east-tensions-ease-273438">S&amp;P 500</a> edged up 0.28 per cent, to be just off all-time highs.

The main event of the week will be the signing of the Phase One&nbsp;trade deal between the United States and China on Wednesday. The Trump administration has invited at least 200 people to the White House for the ceremony.

"A calmer geopolitical backdrop and the signing of the US‑China Phase One&nbsp;agreement is, on balance, favourable for global growth," said Joseph Capurso, an FX strategist at CBA.

"However, the 86-page Phase One&nbsp;<a href="https://www.wionews.com/world/chinas-vice-premier-liu-to-sign-us-trade-deal-next-week-in-washington-273242">agreement</a> has not yet been made public.&nbsp;There are doubts how comprehensive the deal is, and whether the Phase One&nbsp;agreement will be implemented in full by both governments."

Washington has reserved the right to reimpose tariffs if it judges China is not abiding by the deal.

"If there is any surprise from the Phase One&nbsp;deal&nbsp;that may actually cause some kind of volatility," said Tommy Xie, economist and head of greater China research at OCBC in Singapore.

"People are really focused on whether China is really committed to purchasing additional $200 billion in goods and services from the US&nbsp;over the next two years, there's not much commitment from China yet."

Xie said China's fourth-quarter and 2019 full-year GDP figures, due on Friday, are also likely to draw close scrutiny as investors look for signs that improvements seen in recent manufacturing surveys are reflected in broader growth and investment figures.

<a href="https://www.wionews.com/business-economy/sp-500-snaps-win-streak-as-middle-east-tensions-push-down-wall-street-272037">Wall Street</a> slipped and bonds rallied on Friday when data showed US&nbsp;nonfarm payrolls missed forecasts with a rise of 145,000, while wages and hours worked were soft.

"This is the perfect employment report for the Fed to continue to run the economy 'hot', as views on the natural rate of unemployment continue to drop," said Alan Ruskin, Deutsche Bank's global head of FX strategy. "This is perfect for risky assets."&nbsp;

On Monday, the euro gained 0.06 per cent&nbsp;to $1.1126, up from a $1.1083 low on Friday. Support comes in around $1.1060, while the recent peak at $1.1239 marks stiff resistance.

The dollar was firm on the yen at 109.61 but faces tough resistance around 109.70 where rallies have repeatedly failed in the past couple of months.

Against a basket of currencies, the dollar was stuck at 97.357, well within the recent trading range of 96.355 to 97.817.

The pound dipped 0.18 per cent&nbsp;to $1.3035 after <a href="https://www.wionews.com/business-economy/bank-of-england-sam-woods-warns-financial-sector-may-crackdown-273799">Bank of England</a> policymaker Gertjan Vlieghe said he will vote for a cut in interest rates later this month, barring an "imminent and significant" improvement in the growth data.

Spot gold slipped 0.37 per cent to $1,556.30 per ounce, having hit a seven-year top last week of $1,610.90 at the height of <a href="https://www.wionews.com/world/do-not-kill-your-protesters-us-president-trump-to-iranian-authorities-273818">Iran-US&nbsp;tensions</a>.

Oil prices were slightly firmer after suffering the first weekly loss since late November.&nbsp;

<a href="https://www.wionews.com/business-economy/oil-edges-above-65-as-middle-east-concerns-support-273441">Brent crude</a> futures were up 6 cents at $65.04 a barrel, while US&nbsp;crude added 10 cents to $59.14 a barrel.

Asian shares rose to new 19-month highs on Monday ahead of the expected signing on Phase One China-US trade deal, although markets have yet to see the details of the agreement.

Asian shares rose to new 19-month highs on Monday ahead of the expected signing on Phase One China-US trade deal, although markets have yet to see the details of the agreement. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.47 per cent higher, touching its highest point since June 2018. Japanese markets were closed for a holiday. South Korea's trade-sensitive Kospi added 0.73 per cent and Hong Kong's Hang Seng was up 0.74 per cent, while Taiwan shares added 0.6 per cent in the first trading day after Taiwanese re-elected President Tsai Ing-wen by a landslide on Saturday. Mainland Chinese shares lagged the regional index after China's major equity indexes logged their sixth consecutive weekly rise last week, the longest such streak since the first quarter of 2019. The benchmark Shanghai Composite Index ended the morning session up just 0.06 per cent. Investors in China are looking ahead to trade and economic growth data due this week, which is expected to shed more light on some early signs of economic improvement after the country logged its slowest pace of growth in nearly three decades in the third quarter. Japan's Nikkei was closed for a holiday. It fell sharply early last week when Iran attacked bases hosting US military in Iraq, only to rally almost a thousand points when the two countries stepped back from hostilities. E-Mini futures for the S&P 500 edged up 0.28 per cent, to be just off all-time highs. The main event of the week will be the signing of the Phase One trade deal between the United States and China on Wednesday. The Trump administration has invited at least 200 people to the White House for the ceremony. "A calmer geopolitical backdrop and the signing of the US‑China Phase One agreement is, on balance, favourable for global growth," said Joseph Capurso, an FX strategist at CBA. "However, the 86-page Phase One agreement has not yet been made public. There are doubts how comprehensive the deal is, and whether the Phase One agreement will be implemented in full by both governments." Washington has reserved the right to reimpose tariffs if it judges China is not abiding by the deal. "If there is any surprise from the Phase One deal that may actually cause some kind of volatility," said Tommy Xie, economist and head of greater China research at OCBC in Singapore. "People are really focused on whether China is really committed to purchasing additional $200 billion in goods and services from the US over the next two years, there's not much commitment from China yet." Xie said China's fourth-quarter and 2019 full-year GDP figures, due on Friday, are also likely to draw close scrutiny as investors look for signs that improvements seen in recent manufacturing surveys are reflected in broader growth and investment figures. Wall Street slipped and bonds rallied on Friday when data showed US nonfarm payrolls missed forecasts with a rise of 145,000, while wages and hours worked were soft. "This is the perfect employment report for the Fed to continue to run the economy 'hot', as views on the natural rate of unemployment continue to drop," said Alan Ruskin, Deutsche Bank's global head of FX strategy. "This is perfect for risky assets." On Monday, the euro gained 0.06 per cent to $1.1126, up from a $1.1083 low on Friday. Support comes in around $1.1060, while the recent peak at $1.1239 marks stiff resistance. The dollar was firm on the yen at 109.61 but faces tough resistance around 109.70 where rallies have repeatedly failed in the past couple of months. Against a basket of currencies, the dollar was stuck at 97.357, well within the recent trading range of 96.355 to 97.817. The pound dipped 0.18 per cent to $1.3035 after Bank of England policymaker Gertjan Vlieghe said he will vote for a cut in interest rates later this month, barring an "imminent and significant" improvement in the growth data. Spot gold slipped 0.37 per cent to $1,556.30 per ounce, having hit a seven-year top last week of $1,610.90 at the height of Iran-US tensions. Oil prices were slightly firmer after suffering the first weekly loss since late November. Brent crude futures were up 6 cents at $65.04 a barrel, while US crude added 10 cents to $59.14 a barrel.

Asian shares rise ahead of US-China 'phase one' trade deal

<a href="https://www.wionews.com/sports/football-england-chief-southgate-dissapointed-to-not-be-linked-to-club-positions-270326">Bank&nbsp;of England</a> Deputy Governor Sam&nbsp;Woods&nbsp;on Sunday said that Britain's&nbsp;financial&nbsp;sector&nbsp;could face a&nbsp;crackdown&nbsp;by regulators seeking to enforce their rules more&nbsp;tightly.

"I think it's possible that as we come out of the reform phase, and enter a phase where we're defending the reforms that have been put in place, that you may see more enforcement activity,"&nbsp;Woods&nbsp;told the&nbsp;Telegraph&nbsp;newspaper.

Woods, who is the head of the <a href="https://www.wionews.com/business-economy/consumers-up-borrowing-at-slowest-rates-in-uk-bank-of-england-271888">Prudential Regulation Authority</a> (PRA), the BoE's&nbsp;banking supervisory arm, also said the regulator wouldn't necessarily be hostile to consolidation in the&nbsp;banking&nbsp;sector, according to The&nbsp;Telegraph&nbsp;report.

"We approach these things with caution, we'd have to be sure it made sense for the resulting entity,” he said.

"It's been quite striking to me that really we've only had that one consolidation [in&nbsp;banking] Virgin Money and Clydesdale. The possibility of others seems to me quite relevant and would not be problematic in principle."

Woods, who was initially in the frame to replace <a href="https://www.wionews.com/business-economy/hedge-funds-gained-early-access-to-boe-press-conference-feeds-269131">Mark Carney</a> as the British central&nbsp;bank&nbsp;governor, said he will have an eye on the job "next time around." Andrew Bailey, chief executive of the&nbsp;Financial&nbsp;Conduct Authority, will succeed Mark Carney as the BoE's governor on March 16.

Bank of England Deputy Governor Sam Woods on Sunday said that Britain's financial sector could face a crackdown by regulators seeking to enforce their rules more tightly.

Bank of England Deputy Governor Sam Woods on Sunday said that Britain's financial sector could face a crackdown by regulators seeking to enforce their rules more tightly. "I think it's possible that as we come out of the reform phase, and enter a phase where we're defending the reforms that have been put in place, that you may see more enforcement activity," Woods told the Telegraph newspaper. Woods, who is the head of the Prudential Regulation Authority (PRA), the BoE's banking supervisory arm, also said the regulator wouldn't necessarily be hostile to consolidation in the banking sector, according to The Telegraph report. "We approach these things with caution, we'd have to be sure it made sense for the resulting entity,” he said. "It's been quite striking to me that really we've only had that one consolidation [in banking] Virgin Money and Clydesdale. The possibility of others seems to me quite relevant and would not be problematic in principle." Woods, who was initially in the frame to replace Mark Carney as the British central bank governor, said he will have an eye on the job "next time around." Andrew Bailey, chief executive of the Financial Conduct Authority, will succeed Mark Carney as the BoE's governor on March 16.

Bank of England: Sam Woods warns financial sector 'may crackdown'

As per the data received from&nbsp;the <a href="https://www.wionews.com/world/tesco-suspends-chinese-supplier-after-suspected-prisoner-message-269636">Bank of England</a>&nbsp;on Friday, the British consumers increased their borrowing in November&nbsp;at the slowest rate in more than five years that indicates the economy stalled late the previous year.&nbsp;

The growth rate in unsecured consumer lending slowed to 5.7 per cent&nbsp;in the 12 months to November from 6.1 per cent&nbsp;in October, the BoE said, marking the smallest increase since June 2014.

The figures also showed credit card repayments exceeded borrowing for the first time since July 2013.

Household spending has helped to drive Britain's economy over the last few years, helped by record levels of employment and recovery in wage growth.

But some BoE officials are concerned that the labour market may finally be on the turn, raising questions about the sustainability of solid rates of consumer spending.

Investors are watching for signs that Prime Minister <a href="https://www.wionews.com/opinions/donald-trump-enthusiastic-about-boris-johnsons-victory-but-it-wont-be-smooth-sailing-for-them-269348">Boris Johnson's</a> victory in the December&nbsp;12 election has lifted worries about Britain's political stability, potentially providing a much-needed boost to the economy.

In cash terms, consumer credit rose by 563 million pounds in November after a 1.339 billion-pound rise in October, the smallest increase since November 2013, the BoE said.

The data also showed the number of mortgages approved for house purchase edged up to 64,994 in November from 64,662 in October, compared with the consensus forecast of 64,450 in a poll of economists.

British house price growth has slowed since 2016's <a href="https://www.wionews.com/world/british-pm-boris-johnsons-brexit-deal-wins-first-vote-in-new-parliament-269404">Brexit referendum</a>, with price falls in London and some neighbouring areas and nationally price growth is around 1-2 per cent, according to figures from the country's two main mortgage lenders.

Earlier on Friday lender, Nationwide said house prices rose in annual terms by more than 1 per cent&nbsp;for the first time in more than 12 months in December.

As per the data received from the Bank of England on Friday, the British consumers increased their borrowing in November at the slowest rate in more than five years that indicates the economy stalled late the previous year.

As per the data received from the Bank of England on Friday, the British consumers increased their borrowing in November at the slowest rate in more than five years that indicates the economy stalled late the previous year. The growth rate in unsecured consumer lending slowed to 5.7 per cent in the 12 months to November from 6.1 per cent in October, the BoE said, marking the smallest increase since June 2014. The figures also showed credit card repayments exceeded borrowing for the first time since July 2013. Household spending has helped to drive Britain's economy over the last few years, helped by record levels of employment and recovery in wage growth. But some BoE officials are concerned that the labour market may finally be on the turn, raising questions about the sustainability of solid rates of consumer spending. Investors are watching for signs that Prime Minister Boris Johnson's victory in the December 12 election has lifted worries about Britain's political stability, potentially providing a much-needed boost to the economy. In cash terms, consumer credit rose by 563 million pounds in November after a 1.339 billion-pound rise in October, the smallest increase since November 2013, the BoE said. The data also showed the number of mortgages approved for house purchase edged up to 64,994 in November from 64,662 in October, compared with the consensus forecast of 64,450 in a poll of economists. British house price growth has slowed since 2016's Brexit referendum, with price falls in London and some neighbouring areas and nationally price growth is around 1-2 per cent, according to figures from the country's two main mortgage lenders. Earlier on Friday lender, Nationwide said house prices rose in annual terms by more than 1 per cent for the first time in more than 12 months in December.

Consumers up borrowing at slowest rate in UK: Bank of England

The <a href="https://www.wionews.com/business-economy/united-kingdom-economy-grows-at-slowest-annual-rate-since-2010-in-q3-261355">Bank of England (BoE)</a> admitted a rogue supplier has been misusing&nbsp;feeds&nbsp;of its&nbsp;press&nbsp;briefings, allowing high-speed traders&nbsp;access&nbsp;to market-sensitive information seconds before rivals.

Following a report in The Times newspaper, the UK central bank said on Wednesday a third-party supplier had&nbsp;accessed a back-up audio feed of some of its&nbsp;press&nbsp;conferences without consent, and supplied it to "other external clients".

Briefings by&nbsp;BoE&nbsp;Governor <a href="https://www.wionews.com/business-economy/bank-of-england-chief-pulls-out-of-chinese-event-244164">Mark Carney</a> and other top central bank officials often move markets including sterling and gilts, and&nbsp;access&nbsp;to them&nbsp;early&nbsp;would potentially allow traders to make millions.

Carney is due to leave the bank - which makes a policy announcement at noon - within weeks. His replacement is expected to be announced soon following last week's national election.

The third-party supplier, whom the&nbsp;BoE&nbsp;did not name, had been misusing the audio feed since earlier this year, the central bank said in a statement.

"This wholly unacceptable use of the audio feed was without the Bank's knowledge or consent, and is being investigated further," it added.

The feed was intended as a fallback option if the&nbsp;BoE's official video feed of the&nbsp;press&nbsp;conference&nbsp;went down, according to The Times.

A spokesman for the Bank told&nbsp;that it had referred the misuse of the feed to the Financial Conduct Authority on Thursday.

The FCA, the body responsible for regulating markets and traders, did not immediately respond to a request for comment.

The supplier in question had been sending the feed to high-speed traders who seek to benefit from receiving comments of the bank's governor before others can.

The&nbsp;BoE&nbsp;curbed the supplier's&nbsp;access&nbsp;once the misuse was identified to it by the newspaper and said that the supplier did not distribute&nbsp;feeds&nbsp;from its most recent news&nbsp;conference&nbsp;and will not be involved in any&nbsp;conferences in the future.

The Bank of England (BoE) admitted a rogue supplier has been misusing feeds of its press briefings, allowing high-speed traders access to market-sensitive information seconds before rivals.

The Bank of England (BoE) admitted a rogue supplier has been misusing feeds of its press briefings, allowing high-speed traders access to market-sensitive information seconds before rivals. Following a report in The Times newspaper, the UK central bank said on Wednesday a third-party supplier had accessed a back-up audio feed of some of its press conferences without consent, and supplied it to "other external clients". Briefings by BoE Governor Mark Carney and other top central bank officials often move markets including sterling and gilts, and access to them early would potentially allow traders to make millions. Carney is due to leave the bank - which makes a policy announcement at noon - within weeks. His replacement is expected to be announced soon following last week's national election. The third-party supplier, whom the BoE did not name, had been misusing the audio feed since earlier this year, the central bank said in a statement. "This wholly unacceptable use of the audio feed was without the Bank's knowledge or consent, and is being investigated further," it added. The feed was intended as a fallback option if the BoE's official video feed of the press conference went down, according to The Times. A spokesman for the Bank told that it had referred the misuse of the feed to the Financial Conduct Authority on Thursday. The FCA, the body responsible for regulating markets and traders, did not immediately respond to a request for comment. The supplier in question had been sending the feed to high-speed traders who seek to benefit from receiving comments of the bank's governor before others can. The BoE curbed the supplier's access once the misuse was identified to it by the newspaper and said that the supplier did not distribute feeds from its most recent news conference and will not be involved in any conferences in the future.

Hedge funds gained early access to BoE press conference feeds

Britain's opposition&nbsp;Labour&nbsp;Party on Monday called for Prime&nbsp;Minister&nbsp;<a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/world/uks-johnson-offers-new-health-funds-to-meet-brexit-promise-240632&amp;sa=U&amp;ved=2ahUKEwjjzLa6zuvjAhUGPI8KHZizAe4QFjABegQIDhAC&amp;usg=AOvVaw3kcVTrSrF-bXcZtQUJwl0i">Boris Johnson</a> to investigate his&nbsp;finance&nbsp;minister&nbsp;Sajid&nbsp;Javid's&nbsp;role&nbsp;in financial misconduct during his previous career as a banker before entering politics.

Labour's&nbsp;finance&nbsp;spokesman John McDonnell said he had written to Johnson to reconsider&nbsp;Javid's fitness for the job and should look into three areas of concern relating to the minister's 18-year&nbsp;finance&nbsp;career during which time he worked for&nbsp;Deutsche&nbsp;Bank.

These were&nbsp;Deutsche’s activities in the run-up to the global financial crisis while&nbsp;Javid&nbsp;was working at the bank, with McDonnell citing a US Senate Permanent Subcommittee on investigations conclusions.

He also said there were concerns about&nbsp;Javid’s relationship to the trading of risky collateralised debt obligations while at&nbsp;Deutsche, which were blamed for helping to cause the global financial crisis.

The third issue was&nbsp;Javid's&nbsp;role&nbsp;in&nbsp;Deutsche’s use of the ‘Dark Blue’ scheme which McDonnell said the UK Supreme Court had found to constitute tax avoidance.

Deutsche&nbsp;Bank declined to comment and a spokesman for the Conservative Party said&nbsp;Labour&nbsp;"might want to use the time better thinking&nbsp;about their own credentials for governing".&nbsp;

"Their reckless plans&nbsp;would see debt soaring as they&nbsp;spend one thousand billion pounds, tax raids on hard-working families and upheaval of our economic system by replacing key posts such as the governor of the Bank of England with their hard-left choices. Utter disaster," the spokesman said.

"If any party knows about failure and bogus&nbsp;investigations, it's them," he added.

Britain's opposition Labour Party on Monday called for Prime Minister Boris Johnson to investigate his finance minister Sajid Javid's role in financial misconduct during his previous career as a banker before entering politics.

Britain's opposition Labour Party on Monday called for Prime Minister Boris Johnson to investigate his finance minister Sajid Javid's role in financial misconduct during his previous career as a banker before entering politics. Labour's finance spokesman John McDonnell said he had written to Johnson to reconsider Javid's fitness for the job and should look into three areas of concern relating to the minister's 18-year finance career during which time he worked for Deutsche Bank. These were Deutsche’s activities in the run-up to the global financial crisis while Javid was working at the bank, with McDonnell citing a US Senate Permanent Subcommittee on investigations conclusions. He also said there were concerns about Javid’s relationship to the trading of risky collateralised debt obligations while at Deutsche, which were blamed for helping to cause the global financial crisis. The third issue was Javid's role in Deutsche’s use of the ‘Dark Blue’ scheme which McDonnell said the UK Supreme Court had found to constitute tax avoidance. Deutsche Bank declined to comment and a spokesman for the Conservative Party said Labour "might want to use the time better thinking about their own credentials for governing". "Their reckless plans would see debt soaring as they spend one thousand billion pounds, tax raids on hard-working families and upheaval of our economic system by replacing key posts such as the governor of the Bank of England with their hard-left choices. Utter disaster," the spokesman said. "If any party knows about failure and bogus investigations, it's them," he added.

UK's opposition calls for investigation into finance minister Sajid Javid over Deutsche role

The Bank of England cut its growth forecasts on Thursday in the face of increased Brexit worries and a slowing global economy but gave no indication it was considering lowering interest rates like other central banks.

A day after the <a href="https://www.wionews.com/business-economy/nasdaq-ends-at-record-high-dollar-falls-as-us-fed-signals-possible-rate-cut-234814">US Federal Reserve</a> reduced rates for the first time since the global financial crisis, the BoE said it still expected to raise borrowing costs gradually though this now hinged on a global pick-up as well as a "smooth" Brexit.&nbsp;

The BoE's Monetary Policy Committee (MPC) voted 9-0 to keep rates unchanged at 0.75 per cent, as expected in a Reuters poll of economists and said rates could move either way, whatever form Brexit takes.

With new Prime Minister Boris Johnson committed to taking Britain out of the <a href="https://www.wionews.com/world/uk-plays-brexit-hardball-with-stubborn-european-union-pound-falls-to-a-two-year-low-239235">European Union</a> on Oct. 31 regardless of whether he can secure a transition deal markets see increased risks of a disorderly, no-deal Brexit.

The BoE said this had led to "a marked depreciation of the sterling exchange rate" which is near a three-year low against a basket of other major currencies and that as of mid-July, business uncertainty about Brexit had become "more entrenched".

"Underlying growth appears to have slowed since 2018 to a rate below potential, reflecting both the impact of intensifying Brexit-related uncertainties on business investment and weaker global growth on net trade," the BoE said.

There was a little immediate market reaction to the statement.

"All eyes will be on the MPC's September meeting. If a disorderly exit from the EU is on the cards, the Bank must not shy away from lowering interest rates in advance to support businesses and households through the turbulence," the Institute of Directors' chief economist, Tej Parikh, said.

The BoE's forecasts assume Britain avoids a Brexit shock, but still foresee a growth of 1.3 per cent for 2019 and 2020, down from 1.5 per cent and 1.6 per cent respectively in its last forecasts in May.

This leaves British economic growth roughly in line with that of the eurozone, which Britain used to regularly outperform before June 2016's referendum decision to leave the EU.

The forecasts also showed a relatively high 30 per cent chance of negative year-on-year growth in the first three months of next year. A recession is typically defined in Europe as two consecutive quarters of negative quarter-on-quarter growth.

Rate cut bets

The weaker growth outlook comes despite the implicit stimulus from the expectations in markets of a rate cut that the BoE mechanically factors into the forecasts.

Before Thursday's announcement, markets were pricing in an almost 90 per cent chance that the BoE will cut rates by 25 basis points before Governor Mark Carney steps down at the end of January.

In large part, this reflects the possibility of a significant loosening of BoE policy if there is a no-deal Brexit, to which economists polled by Reuters on average gave a 30 per cent probability.

The European Central Bank is expected to cut rates in September.

Carney will say more about the BoE's thinking in a news conference at 1130 GMT.

The updated BoE forecasts show the central bank expects inflation currently on target at 2 per cent to exceed its target in two and three years, and by a greater margin than it predicted in May.

The BoE said growth and inflation would both probably be slower in the case of a smooth Brexit than its forecasts show, due to a likely snap-back in sterling and market interest rate expectations.

Taking this into account, inflation in three years would not necessarily exceed the BoE's target, but the BoE still foresaw the domestic economy overheating, requiring higher interest rates.

The Bank of England cut its growth forecasts on Thursday in the face of increased Brexit worries and a slowing global economy but gave no indication it was considering lowering interest rates like other central banks.

The Bank of England cut its growth forecasts on Thursday in the face of increased Brexit worries and a slowing global economy but gave no indication it was considering lowering interest rates like other central banks. A day after the US Federal Reserve reduced rates for the first time since the global financial crisis, the BoE said it still expected to raise borrowing costs gradually though this now hinged on a global pick-up as well as a "smooth" Brexit. The BoE's Monetary Policy Committee (MPC) voted 9-0 to keep rates unchanged at 0.75 per cent, as expected in a Reuters poll of economists and said rates could move either way, whatever form Brexit takes. With new Prime Minister Boris Johnson committed to taking Britain out of the European Union on Oct. 31 regardless of whether he can secure a transition deal markets see increased risks of a disorderly, no-deal Brexit. The BoE said this had led to "a marked depreciation of the sterling exchange rate" which is near a three-year low against a basket of other major currencies and that as of mid-July, business uncertainty about Brexit had become "more entrenched". "Underlying growth appears to have slowed since 2018 to a rate below potential, reflecting both the impact of intensifying Brexit-related uncertainties on business investment and weaker global growth on net trade," the BoE said. There was a little immediate market reaction to the statement. "All eyes will be on the MPC's September meeting. If a disorderly exit from the EU is on the cards, the Bank must not shy away from lowering interest rates in advance to support businesses and households through the turbulence," the Institute of Directors' chief economist, Tej Parikh, said. The BoE's forecasts assume Britain avoids a Brexit shock, but still foresee a growth of 1.3 per cent for 2019 and 2020, down from 1.5 per cent and 1.6 per cent respectively in its last forecasts in May. This leaves British economic growth roughly in line with that of the eurozone, which Britain used to regularly outperform before June 2016's referendum decision to leave the EU. The forecasts also showed a relatively high 30 per cent chance of negative year-on-year growth in the first three months of next year. A recession is typically defined in Europe as two consecutive quarters of negative quarter-on-quarter growth. Rate cut bets The weaker growth outlook comes despite the implicit stimulus from the expectations in markets of a rate cut that the BoE mechanically factors into the forecasts. Before Thursday's announcement, markets were pricing in an almost 90 per cent chance that the BoE will cut rates by 25 basis points before Governor Mark Carney steps down at the end of January. In large part, this reflects the possibility of a significant loosening of BoE policy if there is a no-deal Brexit, to which economists polled by Reuters on average gave a 30 per cent probability. The European Central Bank is expected to cut rates in September. Carney will say more about the BoE's thinking in a news conference at 1130 GMT. The updated BoE forecasts show the central bank expects inflation currently on target at 2 per cent to exceed its target in two and three years, and by a greater margin than it predicted in May. The BoE said growth and inflation would both probably be slower in the case of a smooth Brexit than its forecasts show, due to a likely snap-back in sterling and market interest rate expectations. Taking this into account, inflation in three years would not necessarily exceed the BoE's target, but the BoE still foresaw the domestic economy overheating, requiring higher interest rates.

Bank of England cuts growth forecasts as Brexit and global worries mount

The Imitation Game: Bank of England picks World War-II code breaker Turing on £50 notes

The prospect of a trade war is threatening the global growth outlook, which otherwise is on course for a 40-year low in unemployment, the OECD said&nbsp;on Wednesday.

Global growth is set to nudge up from 3.8 per cent this year to 3.9 per cent in 2019, the Organisation for Economic Cooperation and Development forecast in its biannual Economic Outlook.

The Paris-based policy forum made up mainly of developed countries had in March pencilled in an estimate of 3.9 per cent for both years but trimmed its outlook for 2018 due to a weak start to the year because of temporary factors like bad weather.

The OECD said budgetary easing had taken over from central bank stimulus as the main motor of global growth with three-fourths of its member countries now estimated to be loosening purse-strings, led by massive US&nbsp;tax cuts.

Against that backdrop, the overall OECD unemployment rate was seen falling to five per cent by the end of 2019, hitting the lowest level since 1980 and setting the stage for so-far elusive growth in workers' wages.

"In spite of all this good news, risks loom large for the global outlook. What are these risks? First and foremost, an escalation of trade tensions should be avoided," acting OECD chief economist Alvaro Pereira wrote in an introduction to the organisation's biannual Economic Outlook.

The warning comes as European governments brace for the expiration of temporary exemptions on new US&nbsp;steel and aluminium tariffs on&nbsp;June 1, which has outraged Washington's closest allies.

Though the number of trade restrictions has crept higher over the last decade, further measures could create a significant drag on growth because the global economy is now more interconnected than ever before, the OECD said.

With tax cuts boosting US&nbsp;investment, the world's biggest economy was forecast to grow 2.9 per cent this year and 2.8 per cent next year.

As a result, the Federal Reserve was expected to keep gradually increasing its interest rates, bringing the Fed funds rate to 3.25 per cent by the end of 2019.

The euro area economy was seen growing 2.2 per cent this year and 2.1 per cent in 2019 as the labour market and wages recover. The European Central Bank was seen halting bond purchases this year and increasing its negative deposit rate in the second half of 2019.

Outside the euro area, the OECD marginally raised its outlook for Britain to 1.4 per cent growth this year and 1.3 per cent in 2019. The Bank of England was expected to only gradually raise interest rates given the uncertainty over Brexit.

Japanese growth was seen at 1.2 per cent both this and next year as growing labour shortages force companies to increase business investment and hire more workers.

Outside of the OECD, Chinese growth was expected to ease gradually from 6.7 per cent this year to 6.4 per cent in 2019 as infrastructure investment slows in the face of tighter lending conditions and tougher government project approvals.

Global growth is set to nudge up from 3.8 per cent this year to 3.9 per cent in 2019

The prospect of a trade war is threatening the global growth outlook, which otherwise is on course for a 40-year low in unemployment, the OECD said on Wednesday. Global growth is set to nudge up from 3.8 per cent this year to 3.9 per cent in 2019, the Organisation for Economic Cooperation and Development forecast in its biannual Economic Outlook. The Paris-based policy forum made up mainly of developed countries had in March pencilled in an estimate of 3.9 per cent for both years but trimmed its outlook for 2018 due to a weak start to the year because of temporary factors like bad weather. The OECD said budgetary easing had taken over from central bank stimulus as the main motor of global growth with three-fourths of its member countries now estimated to be loosening purse-strings, led by massive US tax cuts. Against that backdrop, the overall OECD unemployment rate was seen falling to five per cent by the end of 2019, hitting the lowest level since 1980 and setting the stage for so-far elusive growth in workers' wages. "In spite of all this good news, risks loom large for the global outlook. What are these risks? First and foremost, an escalation of trade tensions should be avoided," acting OECD chief economist Alvaro Pereira wrote in an introduction to the organisation's biannual Economic Outlook. The warning comes as European governments brace for the expiration of temporary exemptions on new US steel and aluminium tariffs on June 1, which has outraged Washington's closest allies. Though the number of trade restrictions has crept higher over the last decade, further measures could create a significant drag on growth because the global economy is now more interconnected than ever before, the OECD said. With tax cuts boosting US investment, the world's biggest economy was forecast to grow 2.9 per cent this year and 2.8 per cent next year. As a result, the Federal Reserve was expected to keep gradually increasing its interest rates, bringing the Fed funds rate to 3.25 per cent by the end of 2019. The euro area economy was seen growing 2.2 per cent this year and 2.1 per cent in 2019 as the labour market and wages recover. The European Central Bank was seen halting bond purchases this year and increasing its negative deposit rate in the second half of 2019. Outside the euro area, the OECD marginally raised its outlook for Britain to 1.4 per cent growth this year and 1.3 per cent in 2019. The Bank of England was expected to only gradually raise interest rates given the uncertainty over Brexit. Japanese growth was seen at 1.2 per cent both this and next year as growing labour shortages force companies to increase business investment and hire more workers. Outside of the OECD, Chinese growth was expected to ease gradually from 6.7 per cent this year to 6.4 per cent in 2019 as infrastructure investment slows in the face of tighter lending conditions and tougher government project approvals.

Trade war risk stalks global economic upturn: OECD

Former Reserve Bank of India chief Raghuram Rajan said on Wednesday he did not intend to apply for the job of Bank of England governor which is due to come vacant next year.

Rajan has been mentioned by analysts as a possible future BoE governor after Mark Carney - who previously headed Canada's central bank - steps down at the end of June 2019.

"I have a very good job at the University of Chicago and I actually am an academic, not a professional central banker. I am very happy where I am," Rajan told reporters after an event in London hosted by the U.S. university's Booth School of Business, where he is a finance professor.

"I think I’ve said all I can say. I’m not going to apply for a job anywhere, absolutely."

Asked what he would do if he were approached to fill the role, Rajan - who was the RBI's governor until September 2016 - said he had answered a similar question.

Also read: <a href="http://www.wionews.com/india-news/implementation-of-gst-not-unfixable-problem-ex-rbi-governor-raghuram-rajan-130060">Implementation of GST </a><a href="http://www.wionews.com/india-news/implementation-of-gst-not-unfixable-problem-ex-rbi-governor-raghuram-rajan-130060">not</a><a href="http://www.wionews.com/india-news/implementation-of-gst-not-unfixable-problem-ex-rbi-governor-raghuram-rajan-130060"> 'unfixable' problem, says Raghuram Rajan</a>

British finance minister Philip Hammond is expected to name Carney's successor later this year, and said in Washington last month that he would consider candidates from abroad.

Andrew Bailey, a former BoE deputy governor who now heads Britain's Financial Conduct Authority, is seen as the front-runner by many economists in the City of London.

Aside from current senior BoE staff, other names mentioned include Agustin Carstens, the Mexican who is general manager of the Bank for International Settlements, Minouche Shafik, a former BoE deputy governor who heads the London School of Economics and Shriti Vadera, who chairs Santander UK.

Rajan is a former chief economist at the International Monetary Fund, and warned of financial imbalances in the run-up to the 2007-08 global crisis.

On Wednesday, he said that banks were now much safer but risk had shifted to other parts of the financial system.

Debt troubles in Argentina were likely to be repeated elsewhere and he highlighted the increased volume of 'covenant-lite' loans compared with before the crisis.

The U.S. Federal Reserve and the European Central Bank had probably done too much in the way of asset purchases once the worst of the crisis had passed, Rajan added, and had let governments off the hook in terms of undertaking structural reform and providing fiscal stimulus.

In the ECB's case, asset purchases appeared to have weakened the euro but not boosted real economic activity.

He declined to comment on whether the BoE's 435 billion pound ($587 billion) asset purchases were too much, or if Britain's fiscal austerity since 2010 had been excessive, as he had not studied the British economy in as much depth.

Rajan has been mentioned by analysts as a possible future BoE governor after Mark Carney - who previously headed Canada's central bank - steps down at the end of June 2019

Former Reserve Bank of India chief Raghuram Rajan said on Wednesday he did not intend to apply for the job of Bank of England governor which is due to come vacant next year. Rajan has been mentioned by analysts as a possible future BoE governor after Mark Carney - who previously headed Canada's central bank - steps down at the end of June 2019. "I have a very good job at the University of Chicago and I actually am an academic, not a professional central banker. I am very happy where I am," Rajan told reporters after an event in London hosted by the U.S. university's Booth School of Business, where he is a finance professor. "I think I’ve said all I can say. I’m not going to apply for a job anywhere, absolutely." Asked what he would do if he were approached to fill the role, Rajan - who was the RBI's governor until September 2016 - said he had answered a similar question. Also read: Implementation of GST not 'unfixable' problem, says Raghuram Rajan British finance minister Philip Hammond is expected to name Carney's successor later this year, and said in Washington last month that he would consider candidates from abroad. Andrew Bailey, a former BoE deputy governor who now heads Britain's Financial Conduct Authority, is seen as the front-runner by many economists in the City of London. Aside from current senior BoE staff, other names mentioned include Agustin Carstens, the Mexican who is general manager of the Bank for International Settlements, Minouche Shafik, a former BoE deputy governor who heads the London School of Economics and Shriti Vadera, who chairs Santander UK. Rajan is a former chief economist at the International Monetary Fund, and warned of financial imbalances in the run-up to the 2007-08 global crisis. On Wednesday, he said that banks were now much safer but risk had shifted to other parts of the financial system. Debt troubles in Argentina were likely to be repeated elsewhere and he highlighted the increased volume of 'covenant-lite' loans compared with before the crisis. The U.S. Federal Reserve and the European Central Bank had probably done too much in the way of asset purchases once the worst of the crisis had passed, Rajan added, and had let governments off the hook in terms of undertaking structural reform and providing fiscal stimulus. In the ECB's case, asset purchases appeared to have weakened the euro but not boosted real economic activity. He declined to comment on whether the BoE's 435 billion pound ($587 billion) asset purchases were too much, or if Britain's fiscal austerity since 2010 had been excessive, as he had not studied the British economy in as much depth.

Not applying for Bank of England job: Raghuram Rajan

According to reports, former RBI Governor, Raghuram Rajan, has been listed as one of the possible contenders for a top job at the Bank of England (BoE).

According to UK-based Financial Times, UK Chancellor and Exchequer Philip Hammond has started the process of selecting the next Governor of the Bank of England. If selected, Rajan will replace the current Governor, Mark Carney, next year.

According to the report, Mr Hammond's has shown an interest in looking abroad for Carney's successor as the UK prepares for Brexit.
<iframe width="560" height="315" src="https://www.youtube.com/embed/VQ_YYATuvbg" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>
Rajan currently teaches Finance at the University of Chicago, Booth School of Business. He served as the RBI Governor for three years, September 2013 to 2016.

Rajan was also the youngest Chief Economist and Director of Research at the International Monetary Fund.

Indian-origin Baroness Shriti Vadera could also be a candidate for the post.&nbsp; 
&nbsp;

Indian-origin Baroness Shriti Vadera could also be a candidate for the post

According to reports, former RBI Governor, Raghuram Rajan, has been listed as one of the possible contenders for a top job at the Bank of England (BoE). According to UK-based Financial Times, UK Chancellor and Exchequer Philip Hammond has started the process of selecting the next Governor of the Bank of England. If selected, Rajan will replace the current Governor, Mark Carney, next year. According to the report, Mr Hammond's has shown an interest in looking abroad for Carney's successor as the UK prepares for Brexit. Rajan currently teaches Finance at the University of Chicago, Booth School of Business. He served as the RBI Governor for three years, September 2013 to 2016. Rajan was also the youngest Chief Economist and Director of Research at the International Monetary Fund. Indian-origin Baroness Shriti Vadera could also be a candidate for the post.

Raghuram Rajan could be next Bank of England Governor

Britain&#39;s economy will grow more slowly in the short term if the country fails to secure a deal for its future trading relationship with the European Union after Brexit, Bank of England Governor Mark Carney said on Sunday.

Asked in an interview with ITV television if Britain&#39;s economy would take a hit if there is no Brexit deal, Carney said&nbsp;&quot;The short answer is yes, in the short term. In the short term, without question, if we have materially less access (to the EU) than we have now, this economy is going to need to reorient and during that period of time it will weigh on growth.&quot;

Carney also said British business investment should be booming, given the strength of the world economy and other factors, but it was only just growing because of the uncertainty about the outcome of the Brexit negotiations.

The BoE on Thursday raised interest rates for the first time since 2007, before the start of the global financial crisis, but sterling fell sharply as the central bank also said it expected only &#39;very gradual&#39;&nbsp;rate rises ahead.

The BoE on Thursday raised interest rates for the first time since 2007.

Britain's economy will grow more slowly in the short term if the country fails to secure a deal for its future trading relationship with the European Union after Brexit, Bank of England Governor Mark Carney said on Sunday. Asked in an interview with ITV television if Britain's economy would take a hit if there is no Brexit deal, Carney said "The short answer is yes, in the short term. In the short term, without question, if we have materially less access (to the EU) than we have now, this economy is going to need to reorient and during that period of time it will weigh on growth." Carney also said British business investment should be booming, given the strength of the world economy and other factors, but it was only just growing because of the uncertainty about the outcome of the Brexit negotiations. The BoE on Thursday raised interest rates for the first time since 2007, before the start of the global financial crisis, but sterling fell sharply as the central bank also said it expected only 'very gradual' rate rises ahead.

Bank of England's Carney sees slower growth without Brexit deal

The Bank of England suspects that up to 75,000 jobs could be lost in financial services following Britain&rsquo;s departure from the European Union, according to BBC on Monday.

In a study done by Oliver Wyman, a management consultancy which has often been quoted by banking lobby groups assessing the impact of Brexit, in 2016 suggested that there could be around&nbsp;65,000 and 75,000 job losses, which is what the current scenario looks like.&nbsp;

The report also suggested that around 40,000 job losses&nbsp;could solely be from financial services and about 30-40,000 going in related fields like&nbsp;legal work and professional services.

The&nbsp;Bank of England&nbsp;has asked banks and other financial services firms about&nbsp;their plan of action&nbsp;for both a hard and soft Brexit scenario.

If a deal is fixed, the Bank of England assumes that&nbsp;job losses would be lower, though still significant, as banks and other financial services firms would shuffle&nbsp;some jobs, however, if does not work in their favor then 10,000 jobs figure is likely to be the day one&nbsp;of Brexit, BBC reported.&nbsp;

In January, the chief executive of the&nbsp;London Stock Exchange, Xavier Rolet, claimed that Brexit could cause the City of London upto 200,000&nbsp;approximately the&nbsp;if the Government fails to provide a systematic plan for post-Brexit&nbsp;operations.

Moreover, a&nbsp;pole conducted by Reuters of&nbsp;more than 100 finance firms indicates that&nbsp;the industry expects the number of job losses to be below 10K in the few years&nbsp;after Brexit.&nbsp;

The remaining 27 EU states agreed at a summit earlier this month to start analyzing feasible&nbsp;options for trade talks with the UK.

The remaining 27 EU states agreed at a summit earlier this month to start analyzing feasible?the options for trade talks with the UK.

The Bank of England suspects that up to 75,000 jobs could be lost in financial services following Britain’s departure from the European Union, according to BBC on Monday. In a study done by Oliver Wyman, a management consultancy which has often been quoted by banking lobby groups assessing the impact of Brexit, in 2016 suggested that there could be around 65,000 and 75,000 job losses, which is what the current scenario looks like. The report also suggested that around 40,000 job losses could solely be from financial services and about 30-40,000 going in related fields like legal work and professional services. The Bank of England has asked banks and other financial services firms about their plan of action for both a hard and soft Brexit scenario. If a deal is fixed, the Bank of England assumes that job losses would be lower, though still significant, as banks and other financial services firms would shuffle some jobs, however, if does not work in their favor then 10,000 jobs figure is likely to be the day one of Brexit, BBC reported. In January, the chief executive of the London Stock Exchange, Xavier Rolet, claimed that Brexit could cause the City of London upto 200,000 approximately the if the Government fails to provide a systematic plan for post-Brexit operations. Moreover, a pole conducted by Reuters of more than 100 finance firms indicates that the industry expects the number of job losses to be below 10K in the few years after Brexit. The remaining 27 EU states agreed at a summit earlier this month to start analyzing feasible options for trade talks with the UK.

Bank of England suspects upto 75,000 job losses in financial services post-Brexit

The new &pound;5 notes released by the Bank of England have sparked outrage on social media after the bank confirmed that it contained animal fat in the form of tallow, a substance used in candles and soaps, the Independent reported.&nbsp;

The new flexible plastic notes are designed to be cleaner and stronger, but the use of tallow has angered vegans and vegetarians across the UK.&nbsp;

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<a href="https://twitter.com/SteffiRox">@SteffiRox</a> there is a trace of tallow in the polymer pellets used in the base substrate of the polymer &pound;5 notes
&mdash; Bank of England (@bankofengland) <a href="https://twitter.com/bankofengland/status/803273440807550976">November 28, 2016</a></blockquote>
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&nbsp;

More than 5,000 have already signed a petition launched to remove the new plastic fivers from circulation. The note became legal tender in September.&nbsp;

The petition started by Doug Maw at change.org read, &quot;The new &pound;5 notes contain animal fat in the form of tallow. This is unacceptable to millions of vegans, vegetarians, Hindus, Sikhs, Jains and others in the UK.&quot;

&quot;We demand that you cease to use animal products in the production of currency that we have to use,&rdquo; it added.&nbsp;

(WION)&nbsp; 
&nbsp;

The Bank of England's tweet, confirming the note contains tallow to make it more durable, sparked a social media backlash

The new £5 notes released by the Bank of England have sparked outrage on social media after the bank confirmed that it contained animal fat in the form of tallow, a substance used in candles and soaps, the Independent reported. The new flexible plastic notes are designed to be cleaner and stronger, but the use of tallow has angered vegans and vegetarians across the UK. @SteffiRox there is a trace of tallow in the polymer pellets used in the base substrate of the polymer £5 notes — Bank of England (@bankofengland) November 28, 2016 × More than 5,000 have already signed a petition launched to remove the new plastic fivers from circulation. The note became legal tender in September. The petition started by Doug Maw at change.org read, "The new £5 notes contain animal fat in the form of tallow. This is unacceptable to millions of vegans, vegetarians, Hindus, Sikhs, Jains and others in the UK." "We demand that you cease to use animal products in the production of currency that we have to use,” it added. (WION)

UK: New ?5 note containing animal fat angers vegans

Bank of England governor Mark Carney asserted that he will not be reconsidering his decision to stay at the British central bank until June 2019 on Thursday.

&quot;I don&#39;t think we should reopen these things. We have got enough things to worry about,&quot; he told BBC television. &quot;I don&#39;t think we should give real-time commentary on all these things.&quot;

Carney announced on Monday that he was extending his time at the bank for six years instead of the five that he had agreed to stay initially. He decided not to take up the option of staying for a full eight-year term.

&quot;By taking my term in office beyond the expected period of the Article 50 process (for Britain to leave the EU), this should help contribute to securing an orderly transition to the UK&#39;s new relationship with Europe,&quot; he had said, news ageny Reuters reported.

(With inputs from Reuters)

Carney announced on Monday that he was extending his time at the bank for six years instead of the five that he had originally agreed on

Bank of England governor Mark Carney asserted that he will not be reconsidering his decision to stay at the British central bank until June 2019 on Thursday. "I don't think we should reopen these things. We have got enough things to worry about," he told BBC television. "I don't think we should give real-time commentary on all these things." Carney announced on Monday that he was extending his time at the bank for six years instead of the five that he had agreed to stay initially. He decided not to take up the option of staying for a full eight-year term. "By taking my term in office beyond the expected period of the Article 50 process (for Britain to leave the EU), this should help contribute to securing an orderly transition to the UK's new relationship with Europe," he had said, news ageny Reuters reported. (With inputs from Reuters)

Bank of England governor: Won't rethink decision to leave in 2019

Media speculation was divided Sunday on the fate of the governor of the Bank of England, Mark Carney, with competing claims as to whether he is set to announce his departure amid Brexit tensions.&nbsp;

The Canadian is on a five-year contract that expires in 2018 but has an option to extend the job until 2021, a decision the central bank has said will be made public by the end of this year.

Media reports suggest Carney will not take up the option to stay on, with the Sunday Times newspaper saying he was &quot;disillusioned&quot; with Prime Minister Theresa May&#39;s Conservative government.

Carney has been criticised by eurosceptic Conservatives for his warnings of the economic impact of Brexit before the June referendum vote to leave the European Union.

In her speech to her party conference earlier his month, May also appeared to criticise the bank&#39;s policy, saying quantitative easing and low interest rates hurt savers.

But following speculation Carney would be out the door in 2018, the Financial Times late on Sunday reported the governor is &quot;said to be leaning strongly towards staying in his post&quot; until 2021.

&quot;Friends say Carney is determined to defend the Bank of England&#39;s independence in the face of a sustained attack by Brexiters,&quot; the newspaper reported.

Carney told a parliamentary committee on Tuesday that any decision would be &quot;entirely personal&quot;.

&quot;No one should read anything into that decision in terms of government policy,&quot; he said.

The job was &quot;an absolute privilege&quot;, he said, but added: &quot;Like everyone I have personal circumstances that I have to manage.

&quot;This is a role that requires total attention, devotion, and I intend to give it for as long as I can. Those are the only factors.&quot;

A bank spokesman declined to comment on the speculation, or on reports that Carney may announce his decision as soon as Thursday.

Business secretary Greg Clark told the BBC on Sunday that Carney&#39;s future at the bank was &quot;a decision for him&quot; but said he had done a &quot;fantastic job&quot;.

(AFP) 
&nbsp;

Reports suggest Carney is leaning towards not extending his tenure after 2018 amid criticism about his approach to Brexit

Media speculation was divided Sunday on the fate of the governor of the Bank of England, Mark Carney, with competing claims as to whether he is set to announce his departure amid Brexit tensions. The Canadian is on a five-year contract that expires in 2018 but has an option to extend the job until 2021, a decision the central bank has said will be made public by the end of this year. Media reports suggest Carney will not take up the option to stay on, with the Sunday Times newspaper saying he was "disillusioned" with Prime Minister Theresa May's Conservative government. Carney has been criticised by eurosceptic Conservatives for his warnings of the economic impact of Brexit before the June referendum vote to leave the European Union. In her speech to her party conference earlier his month, May also appeared to criticise the bank's policy, saying quantitative easing and low interest rates hurt savers. But following speculation Carney would be out the door in 2018, the Financial Times late on Sunday reported the governor is "said to be leaning strongly towards staying in his post" until 2021. "Friends say Carney is determined to defend the Bank of England's independence in the face of a sustained attack by Brexiters," the newspaper reported. Carney told a parliamentary committee on Tuesday that any decision would be "entirely personal". "No one should read anything into that decision in terms of government policy," he said. The job was "an absolute privilege", he said, but added: "Like everyone I have personal circumstances that I have to manage. "This is a role that requires total attention, devotion, and I intend to give it for as long as I can. Those are the only factors." A bank spokesman declined to comment on the speculation, or on reports that Carney may announce his decision as soon as Thursday. Business secretary Greg Clark told the BBC on Sunday that Carney's future at the bank was "a decision for him" but said he had done a "fantastic job". (AFP)

Bank of England's governor undecided on job extension amid Brexit tensions

Sterling suffered a dizzying &quot;flash crash&quot; against the euro and dollar on Friday in a computer-generated sell-off, sending Brexit shockwaves across markets.

In the second-largest intra-day decline, the pound plunged more than six per cent against the dollar in under ten minutes in Asian trading hours. &nbsp;

A spokesman for the Bank of England told AFP that they are &quot;looking into&quot; the cause of the flash crash.&nbsp;

&quot;We are looking into what happened,&quot; &nbsp;he said after sterling suffered a &quot;flash crash&quot; in Asia trading hours -- hitting a new 31-year low point at $1.1841. The pound slumped also to a 6.5-year trough against the euro, at 94.15 pence. 
Market analysts said algorithmic trading programmes apparently triggered the crash that caused the value of sterling to plummet.&nbsp;

&quot;A lot of investors are still scratching their heads as to how and why it happened, whether it was a fat fingered trader in Tokyo, an algorithm scanning for any negative Brexit news, or just a big seller of the pound,&quot; said analyst Alex Edwards at trading firm UKForex.

&quot;Whatever it was, it shows us that the pound is looking very vulnerable right now.&quot;

XTB analyst David Cheetham added that a combination of trades placed by algorithms and stop-loss orders can &quot;exacerbate the move, which is commonly seen to retrace by a significant proportion of the decline within a matter of minutes&quot;.

Stop-loss orders are automatic orders to buy or sell an asset once it reaches a certain price level.

Approaching midday in London, the pound rowed back to $1.2368, while the euro stood at 89.99 pence.

After rebounding, the pound again fell sharply this week on fears of a so-called &quot;hard Brexit&quot; that would see Britain depart the single market, or tariff-free zone, and end free movement of people into the country.

The pound has hit several fresh 31-year lows against the dollar this week, after British Prime Minister Theresa May outlined a timetable at the weekend for Britain to leave the European Union by 2019.

May&#39;s comment led French President Francois Hollande to call Thursday for EU officials to use a firm hand in negotiations with Britain over its exit.

But some market-watchers said the event illustrated the fragility of the British unit since the country&#39;s shock referendum vote on June 23 to leave the European Union.

(WION with inputs from AFP) 
&nbsp;

The British pound plummeted more than six per cent against the dollar in under ten minutes on Friday, baffling traders across global markets

Sterling suffered a dizzying "flash crash" against the euro and dollar on Friday in a computer-generated sell-off, sending Brexit shockwaves across markets. In the second-largest intra-day decline, the pound plunged more than six per cent against the dollar in under ten minutes in Asian trading hours. A spokesman for the Bank of England told AFP that they are "looking into" the cause of the flash crash. "We are looking into what happened," he said after sterling suffered a "flash crash" in Asia trading hours -- hitting a new 31-year low point at $1.1841. The pound slumped also to a 6.5-year trough against the euro, at 94.15 pence. Market analysts said algorithmic trading programmes apparently triggered the crash that caused the value of sterling to plummet. "A lot of investors are still scratching their heads as to how and why it happened, whether it was a fat fingered trader in Tokyo, an algorithm scanning for any negative Brexit news, or just a big seller of the pound," said analyst Alex Edwards at trading firm UKForex. "Whatever it was, it shows us that the pound is looking very vulnerable right now." XTB analyst David Cheetham added that a combination of trades placed by algorithms and stop-loss orders can "exacerbate the move, which is commonly seen to retrace by a significant proportion of the decline within a matter of minutes". Stop-loss orders are automatic orders to buy or sell an asset once it reaches a certain price level. Approaching midday in London, the pound rowed back to $1.2368, while the euro stood at 89.99 pence. After rebounding, the pound again fell sharply this week on fears of a so-called "hard Brexit" that would see Britain depart the single market, or tariff-free zone, and end free movement of people into the country. The pound has hit several fresh 31-year lows against the dollar this week, after British Prime Minister Theresa May outlined a timetable at the weekend for Britain to leave the European Union by 2019. May's comment led French President Francois Hollande to call Thursday for EU officials to use a firm hand in negotiations with Britain over its exit. But some market-watchers said the event illustrated the fragility of the British unit since the country's shock referendum vote on June 23 to leave the European Union. (WION with inputs from AFP)

Pound's 'flash crash' triggers volatility warnings

World stocks hit a new one-year high today, while the dollar and benchmark government bond yields sank and precious metals rose after weak US productivity data again pushed back expectations of a Federal Reserve rate hike. 
 
Wall Street was expected to grind fractionally higher when it resumes, with jobs and housing market data on the agenda. 
 
Europe&#39;s main bourses were struggling with modest 0.3-0.4 per cent losses due to weak company results, although the MSCI&#39;s 46-country All World index remained positive after overnight Asian gains. 
 
With the focus on signs of pressure in the United States economy, demand for bonds firmed again, a factor already highlighted on Tuesday by the Bank of England&#39;s failure to prise enough debt from investors to meet its revamped bond-buying plan.. 
 
US Treasury yields dropped to 1.536 per cent in Europe, while Germany&#39;s 10-year bonds yield fell 1.4 basis points to minus 0.16 per cent as Berlin sold 4 billion Euros of bond at a new record low average yield of -0.09 per cent. 
 
The 10-year UK gilt yield also sank to a record low of 0.54 per cent in the wake of the BoE&#39;s bond buying issues. 
 
&quot;Central banks look increasingly accommodative and no one seems to be going against that trend ... which supports all asset prices,&quot; said Anton Heese, head of European rates strategy at Morgan Stanley in London. 
 
&quot;The growth prospects for the US economy are probably weaker than many anticipate.&quot; 
 
The bond moves had a clear impact on currencies, with the Dollar index, which tracks the US greenback against a basket of other top currencies, seeing its biggest drop in over a week, falling 0.65 per cent to 95.559. 
 
That in turn sent the Euro up 0.6 per cent to $1.1186, extending its recovery from Friday&#39;s one-week low of $1.1046. The Yen climbed to 101.20 per dollar and even the recently buffeted UK pound made ground. 
 
&quot;The release of the third consecutive decline in quarterly US productivity, the worst run since at least 1980, does not bode well for the prospects for the Dollar,&quot; Morgan Stanley head of currency strategy, Hans Redeker, said. 
 
 
Good as gold 
 
The Australian Dollar advanced to a more than three-month peak of $0.7729, having been buoyed this week by Australia&#39;s relatively high yields and stronger investor risk appetite. 
 
&quot;Part of the Australian dollar&#39;s resilience is the lack of follow-through in pricing for a Fed hike in September, limiting the US dollar&#39;s gains,&quot; analysts at Westpac said in a note. They recommended investors buy the Australian Dollar. 
 
The US dollar&#39;s weakness gave gold a lift, with the precious metal gaining 0.9 per cent to $1,352.26 an ounce. 
 
Palladium jumped more than 7 per cent to a 14-month high at one point as bets on lower prices were reversed after the metal, which is used in car catalytic converters among other things, broke above key chart levels. It surged nearly 20 per cent last month in its biggest one-month rise in 8-1/2 years. 
 
That may mean investors who had bet on lower prices could be exposed to heavy losses. 
 
&quot;You can talk about fundamental explanations, strong car sales, a reduction in supply from Russia, but those didn&#39;t happen overnight,&quot; Macquarie analyst Matthew Turner said. 
 
Oil prices slipped for a second straight day as top producer Saudi Arabia revealed its output hit a record 10.67 million barrels per day last month. It came after data had also shown a surprise US crude stockpile build. 
 
Brent futures fell as much as 1.5 per cent to $44.30 per barrel before recovering to $44.95. US crude also slipped 0.4 per cent to $42.62, extending Tuesday&#39;s 0.6 per cent decline. 
 
Emerging market stocks showed little reaction to the crude moves as they rose for a fifth straight day with many EM currencies also strengthening following the dollar&#39;s sell-off. 
 
MSCI&#39;s emerging market index hit a new one-year high as gains across Asia and other markets such as Greece and the Czech Republic helped extend its rise this month to over 3.5 per cent. 
 
(Reuters)

The US Dollar's weakness gave gold a lift, with the precious metal gaining 0.9 per cent to $1,352.26 an ounce

World stocks hit a new one-year high today, while the dollar and benchmark government bond yields sank and precious metals rose after weak US productivity data again pushed back expectations of a Federal Reserve rate hike. Wall Street was expected to grind fractionally higher when it resumes, with jobs and housing market data on the agenda. Europe's main bourses were struggling with modest 0.3-0.4 per cent losses due to weak company results, although the MSCI's 46-country All World index remained positive after overnight Asian gains. With the focus on signs of pressure in the United States economy, demand for bonds firmed again, a factor already highlighted on Tuesday by the Bank of England's failure to prise enough debt from investors to meet its revamped bond-buying plan.. US Treasury yields dropped to 1.536 per cent in Europe, while Germany's 10-year bonds yield fell 1.4 basis points to minus 0.16 per cent as Berlin sold 4 billion Euros of bond at a new record low average yield of -0.09 per cent. The 10-year UK gilt yield also sank to a record low of 0.54 per cent in the wake of the BoE's bond buying issues. "Central banks look increasingly accommodative and no one seems to be going against that trend ... which supports all asset prices," said Anton Heese, head of European rates strategy at Morgan Stanley in London. "The growth prospects for the US economy are probably weaker than many anticipate." The bond moves had a clear impact on currencies, with the Dollar index, which tracks the US greenback against a basket of other top currencies, seeing its biggest drop in over a week, falling 0.65 per cent to 95.559. That in turn sent the Euro up 0.6 per cent to $1.1186, extending its recovery from Friday's one-week low of $1.1046. The Yen climbed to 101.20 per dollar and even the recently buffeted UK pound made ground. "The release of the third consecutive decline in quarterly US productivity, the worst run since at least 1980, does not bode well for the prospects for the Dollar," Morgan Stanley head of currency strategy, Hans Redeker, said. Good as gold The Australian Dollar advanced to a more than three-month peak of $0.7729, having been buoyed this week by Australia's relatively high yields and stronger investor risk appetite. "Part of the Australian dollar's resilience is the lack of follow-through in pricing for a Fed hike in September, limiting the US dollar's gains," analysts at Westpac said in a note. They recommended investors buy the Australian Dollar. The US dollar's weakness gave gold a lift, with the precious metal gaining 0.9 per cent to $1,352.26 an ounce. Palladium jumped more than 7 per cent to a 14-month high at one point as bets on lower prices were reversed after the metal, which is used in car catalytic converters among other things, broke above key chart levels. It surged nearly 20 per cent last month in its biggest one-month rise in 8-1/2 years. That may mean investors who had bet on lower prices could be exposed to heavy losses. "You can talk about fundamental explanations, strong car sales, a reduction in supply from Russia, but those didn't happen overnight," Macquarie analyst Matthew Turner said. Oil prices slipped for a second straight day as top producer Saudi Arabia revealed its output hit a record 10.67 million barrels per day last month. It came after data had also shown a surprise US crude stockpile build. Brent futures fell as much as 1.5 per cent to $44.30 per barrel before recovering to $44.95. US crude also slipped 0.4 per cent to $42.62, extending Tuesday's 0.6 per cent decline. Emerging market stocks showed little reaction to the crude moves as they rose for a fifth straight day with many EM currencies also strengthening following the dollar's sell-off. MSCI's emerging market index hit a new one-year high as gains across Asia and other markets such as Greece and the Czech Republic helped extend its rise this month to over 3.5 per cent. (Reuters)

World stocks hit 1-year high as US data saps dollar, bond yields

Global stock markets rose on Thursday, after the Bank of England cut interest rates and revived a bond-buying program to cushion the blow to the economy from Britain&#39;s June 23 vote to leave the European Union. 
 
The launch of the policy-easing measures hammered Sterling and weighed on bond yields. 
 
The Bank of England cut its main rate by a quarter percentage point to a record low 0.25 per cent, and said it would take &quot;whatever action is necessary&quot; to achieve stability in the wake of Britain&#39;s vote to leave the EU. 
 
The rate cut was widely expected but not the other measures. 
 
&quot;The Bank of England has hit a perfect &#39;High Five&#39; at today&#39;s meeting, over-delivering against market expectations and bucking the recent trend of central banks disappointing,&quot; said Nick Gartside, a JP Morgan Asset Management portfolio manager. 
 
MSCI&#39;s world stocks index, which tracks shares in 45 nations, was up 0.30 per cent, on pace to snap a three-day losing streak. 
 
Sterling was down 1.59 per cent at $1.3110 and on track for the largest one-day fall against the Dollar in a month.&nbsp; 
 
&quot;The BoE&#39;s dovish guidance and bearish outlook for growth will leave the Pound at risk of further falls in the months ahead,&quot; said Joe Manimbo, senior market analyst at Western Union Business Solutions.&nbsp; 
 
Wall Street shares were little changed as investors were largely wary of making big bets ahead of Friday&#39;s US nonfarm payrolls report, data that may offer insight into the timing of the next Federal Reserve interest rate increase.&nbsp; 
 
&quot;Given that we&rsquo;ve got a big number coming out tomorrow, any investor willing to make a stand can just wait a day and have a lot more information,&quot; Jack Ablin, chief investment officer at BMO Private Bank in Chicago. 
 
The number of Americans filing for unemployment benefits unexpectedly rose last week, and orders for factory goods fell for a second straight month in June. The labour market, however, remains healthy and will probably continue to support economic growth for the remainder of this year.&nbsp; 
 
In afternoon trading, the Dow Jones industrial average was down 21.75 points, or 0.12 per cent, at 18,333.25; the S&amp;P 500 0.71 point, or 0.03 per cent, lower at 2,163.08, and the Nasdaq Composite was up 5.81 points, or 0.11 per cent, at 5,165.55. 
 
Europe&#39;s broad FTSEurofirst 300 index closed up 0.72 per cent at 1,331.68, its best day in two weeks. Strength in major financial and industrial stocks such as Aviva Plc and Siemens AG boosted the region&#39;s equity markets.&nbsp; 
 
Oil prices rose for a second straight day and US crude advanced firmly above the $40 a barrel mark on short-covering and after a modest stockpile drop at the delivery hub for US crude futures. 
 
Brent crude settled up $1.19, or 2.76 per cent, at $44.29 a barrel, while US crude settled up $1.10, or 2.69 per cent, at $41.93. 
 
In bond markets, the BoE rate cut sent yields on some short- and medium-term US Treasury&#39;s to their lowest in more than three weeks. 
 
The move pushed yields on 10-year UK government bonds, or Gilts, to a record low of 0.639 per cent. 
 
Benchmark 10-year US yields fell to their lowest in three days, 1.484 per cent. 
 
The Dollar gained against a basket of currencies for a second straight session, as investors continued to balance positions ahead of Friday&#39;s jobs report. 
 
The Dollar index, which tracks the greenback against six major currencies, was up 0.20 per cent at 95.750. 
 
Gold prices turned higher on the BoE decision, but the stronger Dollar kept a lid on gains. 
 
Spot gold prices were up 0.26 per cent at $1,361.02 an ounce. 
 
(Reuters)

Sterling was down 1.59% at $1.3110, and on track for the largest one-day fall against the Dollar in a month

Global stock markets rose on Thursday, after the Bank of England cut interest rates and revived a bond-buying program to cushion the blow to the economy from Britain's June 23 vote to leave the European Union. The launch of the policy-easing measures hammered Sterling and weighed on bond yields. The Bank of England cut its main rate by a quarter percentage point to a record low 0.25 per cent, and said it would take "whatever action is necessary" to achieve stability in the wake of Britain's vote to leave the EU. The rate cut was widely expected but not the other measures. "The Bank of England has hit a perfect 'High Five' at today's meeting, over-delivering against market expectations and bucking the recent trend of central banks disappointing," said Nick Gartside, a JP Morgan Asset Management portfolio manager. MSCI's world stocks index, which tracks shares in 45 nations, was up 0.30 per cent, on pace to snap a three-day losing streak. Sterling was down 1.59 per cent at $1.3110 and on track for the largest one-day fall against the Dollar in a month. "The BoE's dovish guidance and bearish outlook for growth will leave the Pound at risk of further falls in the months ahead," said Joe Manimbo, senior market analyst at Western Union Business Solutions. Wall Street shares were little changed as investors were largely wary of making big bets ahead of Friday's US nonfarm payrolls report, data that may offer insight into the timing of the next Federal Reserve interest rate increase. "Given that we’ve got a big number coming out tomorrow, any investor willing to make a stand can just wait a day and have a lot more information," Jack Ablin, chief investment officer at BMO Private Bank in Chicago. The number of Americans filing for unemployment benefits unexpectedly rose last week, and orders for factory goods fell for a second straight month in June. The labour market, however, remains healthy and will probably continue to support economic growth for the remainder of this year. In afternoon trading, the Dow Jones industrial average was down 21.75 points, or 0.12 per cent, at 18,333.25; the S&P 500 0.71 point, or 0.03 per cent, lower at 2,163.08, and the Nasdaq Composite was up 5.81 points, or 0.11 per cent, at 5,165.55. Europe's broad FTSEurofirst 300 index closed up 0.72 per cent at 1,331.68, its best day in two weeks. Strength in major financial and industrial stocks such as Aviva Plc and Siemens AG boosted the region's equity markets. Oil prices rose for a second straight day and US crude advanced firmly above the $40 a barrel mark on short-covering and after a modest stockpile drop at the delivery hub for US crude futures. Brent crude settled up $1.19, or 2.76 per cent, at $44.29 a barrel, while US crude settled up $1.10, or 2.69 per cent, at $41.93. In bond markets, the BoE rate cut sent yields on some short- and medium-term US Treasury's to their lowest in more than three weeks. The move pushed yields on 10-year UK government bonds, or Gilts, to a record low of 0.639 per cent. Benchmark 10-year US yields fell to their lowest in three days, 1.484 per cent. The Dollar gained against a basket of currencies for a second straight session, as investors continued to balance positions ahead of Friday's jobs report. The Dollar index, which tracks the greenback against six major currencies, was up 0.20 per cent at 95.750. Gold prices turned higher on the BoE decision, but the stronger Dollar kept a lid on gains. Spot gold prices were up 0.26 per cent at $1,361.02 an ounce. (Reuters)

Global stocks rally after Bank of England's bond-buying measures, but Pound takes hit

British stocks dipped Wednesday after data suggested an economic hit from the Brexit vote just ahead of a key Bank of England policy decision. 
 
Stocks were mixed elsewhere in Europe, while US stocks gained and Japanese stocks tumbled again on worries about government stimulus. 
 
Data monitoring company Markit&#39;s preliminary composite purchasing managers&#39; index (PMI) in Britain for the services industry sank to 47.4 points in July, down from 52.3 in June. A reading under 50 indicates shrinkage. 
 
The data revived worries about the surprise British vote in June to exit the European Union, sending the FTSE down 0.2 per cent. 
 
&quot;This week&#39;s manufacturing PMI report is the latest in a long list of survey data which shows that the vote to leave the EU has caused significant uncertainty, and negative shock is on the way,&quot; said Hargreaves Lansdown economist Ben Brettell. 
 
Market watchers expect the Bank of England Thursday to slash interest rates to a record-low 0.25 per cent and to potentially boost its bond-buying stimulus program. 
 
&quot;The market anticipates at least a quarter-point cut in the base rate, but an expansion of asset purchases and a &#39;bias to ease&#39; would not be surprises,&quot; said economist Larry Hatheway at asset manager GAM. 
 
In the US, payroll firm ADP reported that private US companies added 179,000 jobs in July, slightly better than expected. The data came two days ahead of the government&#39;s official July jobs report. 
 
Analysts said US stocks were also boosted by higher oil prices, which lifted most petroleum-linked shares that helped boost the S&amp;P 500 by 0.3 per cent. 
 
Paris fell 0.2 per cent and Frankfurt rose 0.3 per cent after Markit said eurozone economic data managed a small gain in July despite Brexit. 
 
Weak stimulus hits Nikkei 
 
Japan&#39;s Nikkei dropped 1.9 per cent, its second straight decline, as gripes about a surprisingly modest stimulus package continued to dent sentiment. 
 
Japanese banking shares tanked on fears about the difficulty lenders face making money in a negative interest rate era as their bottom lines come under pressure. 
 
Mitsubishi UFJ Financial Group closed 3.9 per cent lower, rival Sumitomo Mitsui Financial Group dived 4.3 per cent and Mizuho Financial Group lost 3.3 per cent. 
 
Banking giant HSBC ended 1.8 per cent higher in Hong Kong and up more than four percent in London after it announced a $2.5 billion stock buyback and said it would maintain its dividend. 
 
In Milan, Fiat Chrysler shares surged over eight percent following a press report claiming that the auto giant is talking to Samsung about selling its car parts unit Magneti Marelli. 
 
In the US, Time Warner climbed 2.7 per cent after announcing it was taking a 10 per cent stake in Hulu, a streaming video provider that is ramping up as a competitor to sector leader Netflix. 
 
(AFP) 
&nbsp;

Market watchers anticipate 0.25 per cent cut in Bank of England's base rate

British stocks dipped Wednesday after data suggested an economic hit from the Brexit vote just ahead of a key Bank of England policy decision. Stocks were mixed elsewhere in Europe, while US stocks gained and Japanese stocks tumbled again on worries about government stimulus. Data monitoring company Markit's preliminary composite purchasing managers' index (PMI) in Britain for the services industry sank to 47.4 points in July, down from 52.3 in June. A reading under 50 indicates shrinkage. The data revived worries about the surprise British vote in June to exit the European Union, sending the FTSE down 0.2 per cent. "This week's manufacturing PMI report is the latest in a long list of survey data which shows that the vote to leave the EU has caused significant uncertainty, and negative shock is on the way," said Hargreaves Lansdown economist Ben Brettell. Market watchers expect the Bank of England Thursday to slash interest rates to a record-low 0.25 per cent and to potentially boost its bond-buying stimulus program. "The market anticipates at least a quarter-point cut in the base rate, but an expansion of asset purchases and a 'bias to ease' would not be surprises," said economist Larry Hatheway at asset manager GAM. In the US, payroll firm ADP reported that private US companies added 179,000 jobs in July, slightly better than expected. The data came two days ahead of the government's official July jobs report. Analysts said US stocks were also boosted by higher oil prices, which lifted most petroleum-linked shares that helped boost the S&P 500 by 0.3 per cent. Paris fell 0.2 per cent and Frankfurt rose 0.3 per cent after Markit said eurozone economic data managed a small gain in July despite Brexit. Weak stimulus hits Nikkei Japan's Nikkei dropped 1.9 per cent, its second straight decline, as gripes about a surprisingly modest stimulus package continued to dent sentiment. Japanese banking shares tanked on fears about the difficulty lenders face making money in a negative interest rate era as their bottom lines come under pressure. Mitsubishi UFJ Financial Group closed 3.9 per cent lower, rival Sumitomo Mitsui Financial Group dived 4.3 per cent and Mizuho Financial Group lost 3.3 per cent. Banking giant HSBC ended 1.8 per cent higher in Hong Kong and up more than four percent in London after it announced a $2.5 billion stock buyback and said it would maintain its dividend. In Milan, Fiat Chrysler shares surged over eight percent following a press report claiming that the auto giant is talking to Samsung about selling its car parts unit Magneti Marelli. In the US, Time Warner climbed 2.7 per cent after announcing it was taking a 10 per cent stake in Hulu, a streaming video provider that is ramping up as a competitor to sector leader Netflix. (AFP)

Bank of England expected to axe rates to record low, British stocks dip

The Bank of England looks ready to cut interest rates for the first time since 2009 on Thursday, seeking to stop Britain&#39;s vote to leave the European Union from kicking the country into recession. 
 
It may even go a step further and pump billions of pounds into financial markets. 
 
Economic surveys have pointed to a sharp slowdown since the BoE wrong footed markets just over two weeks back, when it kept rates on hold while it considered a bigger, unspecified package of stimulus, which policymakers said was likely in August. 
 
Manufacturing figures on Monday showed the most widespread downturn since early 2013. Earlier survey data for the much larger services sector pointed to the sharpest contraction since 2009. 
 
There is a chance these reports reflect a knee-jerk reaction to the vote, so the question the BoE faces this week is how aggressively to react. 
 
BoE chief economist Andy Haldane said he wanted to use &quot;a sledgehammer to crack a nut&quot;, but another policymaker, Kristin Forbes, said the central bank should stay calm and not rush into a decision until more hard data was available. 
 
Most economists polled by Reuters expect the BoE to cut interest rates by at least a quarter percentage point to 0.25 per cent, and almost half say it will restart its quantitative easing bond purchase programme, on hold since late 2012. 
 
&quot;If you&#39;re heading towards a waterfall, it is better to start paddling than to wait until you&#39;re at the edge,&quot; said Bank of America Merrill Lynch economist Robert Wood, who previously worked as a BoE forecaster. 
 
Wood said looser monetary policy would take months to help the economy. He predicts the BoE will announce 50 billion pounds of asset purchases on top of the 375 billion of government bonds bought between 2009 and 2012. 
 
Others say the BoE&#39;s Monetary Policy Committee (MPC) might be concerned more QE at a time of record-low global bond yields could have unpredictable consequences for banks and markets. 
 
&quot;Taken at face value, recent survey data point to a significant recession. However, there may be some element of a knee-jerk reaction and the MPC may wish to wait for more data before making such a big call,&quot; HSBC economist Simon Wells said. 
 
Surveys carried out in the first half of July may reflect the temporary political disarray as David Cameron stepped down as prime minister and the Conservative Party hunted for a successor. Some data, including the BoE&#39;s own in-house research, point to a fairly modest reaction to the referendum. 
 
Divided MPC 
 
BoE Governor Mark Carney will present the policy decision in a news conference, but is unlikely to have the full support of the MPC. 
 
Forbes, a US academic who serves as an external member of the rate-setting body, said last month looser monetary policy had costs as well as benefits, and the BoE should wait for better data to calibrate its response. 
 
The effectiveness of rate cuts and asset purchases is also in doubt at a time when 10-year British government borrowing costs GB10YT=RR have already hit a record low 0.7 per cent. 
 
&quot;At this stage monetary policy is almost out of juice,&quot; Bank of America&#39;s Wood said. Ultimately the government was likely to need to spend more or cut taxes to boost the economy, he added. 
 
HSBC&#39;s Wells also a former BoE staffer said it was probably too soon for Carney to say the BoE would act like the Bank of Japan and buy bonds in support of a fiscal stimulus which Britain&#39;s government has only hinted at so far. 
 
&quot;Although the BoE may tease us with these ideas ... (this) poses significant policy risks for the future and potentially undermines the BoE&#39;s operational independence,&quot; Wells said. 
 
More likely is for the BoE to extend its Funding for Lending Scheme, which offers banks cheap finance in return for higher lending to the private sector and was in the process of being phased out as the economy recovered. 
 
Other measures are also possible to ensure lower interest rates do not hurt financial institutions&#39; incentives to lend. 
 
The BoE will also release a quarterly update to its growth and inflation forecasts. Sterling&#39;s 12 per cent fall since the referendum is likely to trigger a forecast that inflation will exceed its 2 percent target next year as imports become more costly. 
 
Growth is certain to be revised down, with the main question whether the central bank forecasts a recession. Before the referendum, Carney said a material slowdown, not a recession, was his central scenario if Britain voted to leave. 
 
(Reuters) 
&nbsp;

The Bank of England unlikely to have the full support of Monetary Policy Committee when it will present its policy decision

The Bank of England looks ready to cut interest rates for the first time since 2009 on Thursday, seeking to stop Britain's vote to leave the European Union from kicking the country into recession. It may even go a step further and pump billions of pounds into financial markets. Economic surveys have pointed to a sharp slowdown since the BoE wrong footed markets just over two weeks back, when it kept rates on hold while it considered a bigger, unspecified package of stimulus, which policymakers said was likely in August. Manufacturing figures on Monday showed the most widespread downturn since early 2013. Earlier survey data for the much larger services sector pointed to the sharpest contraction since 2009. There is a chance these reports reflect a knee-jerk reaction to the vote, so the question the BoE faces this week is how aggressively to react. BoE chief economist Andy Haldane said he wanted to use "a sledgehammer to crack a nut", but another policymaker, Kristin Forbes, said the central bank should stay calm and not rush into a decision until more hard data was available. Most economists polled by Reuters expect the BoE to cut interest rates by at least a quarter percentage point to 0.25 per cent, and almost half say it will restart its quantitative easing bond purchase programme, on hold since late 2012. "If you're heading towards a waterfall, it is better to start paddling than to wait until you're at the edge," said Bank of America Merrill Lynch economist Robert Wood, who previously worked as a BoE forecaster. Wood said looser monetary policy would take months to help the economy. He predicts the BoE will announce 50 billion pounds of asset purchases on top of the 375 billion of government bonds bought between 2009 and 2012. Others say the BoE's Monetary Policy Committee (MPC) might be concerned more QE at a time of record-low global bond yields could have unpredictable consequences for banks and markets. "Taken at face value, recent survey data point to a significant recession. However, there may be some element of a knee-jerk reaction and the MPC may wish to wait for more data before making such a big call," HSBC economist Simon Wells said. Surveys carried out in the first half of July may reflect the temporary political disarray as David Cameron stepped down as prime minister and the Conservative Party hunted for a successor. Some data, including the BoE's own in-house research, point to a fairly modest reaction to the referendum. Divided MPC BoE Governor Mark Carney will present the policy decision in a news conference, but is unlikely to have the full support of the MPC. Forbes, a US academic who serves as an external member of the rate-setting body, said last month looser monetary policy had costs as well as benefits, and the BoE should wait for better data to calibrate its response. The effectiveness of rate cuts and asset purchases is also in doubt at a time when 10-year British government borrowing costs GB10YT=RR have already hit a record low 0.7 per cent. "At this stage monetary policy is almost out of juice," Bank of America's Wood said. Ultimately the government was likely to need to spend more or cut taxes to boost the economy, he added. HSBC's Wells also a former BoE staffer said it was probably too soon for Carney to say the BoE would act like the Bank of Japan and buy bonds in support of a fiscal stimulus which Britain's government has only hinted at so far. "Although the BoE may tease us with these ideas ... (this) poses significant policy risks for the future and potentially undermines the BoE's operational independence," Wells said. More likely is for the BoE to extend its Funding for Lending Scheme, which offers banks cheap finance in return for higher lending to the private sector and was in the process of being phased out as the economy recovered. Other measures are also possible to ensure lower interest rates do not hurt financial institutions' incentives to lend. The BoE will also release a quarterly update to its growth and inflation forecasts. Sterling's 12 per cent fall since the referendum is likely to trigger a forecast that inflation will exceed its 2 percent target next year as imports become more costly. Growth is certain to be revised down, with the main question whether the central bank forecasts a recession. Before the referendum, Carney said a material slowdown, not a recession, was his central scenario if Britain voted to leave. (Reuters)

Bank of England prepares to cut interest rates

Britain&#39;s new finance minister Philip Hammond, under pressure from his peers from around the world, said today there could be more clarity later this year on how the country will exit the European Union. 
 
Several nations called on Britain during weekend talks on the world economy to explain how the politically fraught Brexit process will unfold in order to avoid adding a new drag on the long and slow recovery from the financial crisis. 
 
&quot;It&#39;s right at the top of the agenda here at the G20,&quot; Hammond said at the end of the two-day meeting of the Group of 20 leading economies in the Chinese city of Chengdu. &quot;It&#39;s a new factor affecting the global economic outlook and it has increased the uncertainty which the world economy faces.&quot; 
 
Britain was plunged into its biggest political crisis in decades by the June 23 Brexit vote and so far it has resisted calls from some other EU countries to trigger quickly the two-year process for negotiating its exit from the bloc. 
 
Prime Minister Theresa May, who has been in her job for less than two weeks, traveled to Germany and France last week to explain why she needed time to come up with an exit strategy. 
 
The EU&#39;s top economic official, Pierre Moscovici, said the bloc understood that Britain should not be rushed but &quot;at the same time let&#39;s not waste time, let&#39;s not have too much uncertainty, let&#39;s act and choose as swiftly as possible.&quot; 
 
Hammond told reporters today the two-year negotiating period, once launched, represented &quot;quite a tight timescale&quot; and Britain needed to go into it with clear objectives. &quot;We have to do that before the start of the process because when we serve that notice, we need to hit the ground running,&quot; he said. 
 
But Hammond also showed he was aware of the need for some clarity on Brexit: &quot;What will start to reduce uncertainty is when we are able to set out more clearly the kind of arrangement we envisage going forward with the European Union.&quot; 
 
&quot;If our European Union partners respond to such a vision positively - obviously it will be subject to negotiation - so that there is a sense perhaps later this year that we are all on the same page in terms of where we expect to be going, I think that will send a reassuring signal to the business community and to markets,&quot; Hammond said. 
 
May has said she does not plan to launch the formal negotiation period this year. It remains to be seen if other EU countries would enter informal talks with Britain before the formal negotiations, something they have previously ruled out. 
 
Govt, Bank of England have to be ready 
 
Financial markets have stabilised after the initial shock of the referendum result which saw the value of the pound plunge by more than 10 per cent and trillions of dollars wiped off stock markets worldwide. But economists are expecting Britain to fall into a recession, according to a Reuters poll. 
 
Hammond said he did not think that a survey of British businesses published on Friday, which showed the sharpest fall on record in a purchasing managers index, was a sign that the economy was in already in a recession. 
 
&quot;What it does is underscore the hit to confidence,&quot; he said. 
 
Hammond warned that Brexit-related volatility in markets would be a risk throughout the two-year negotiation period. 
 
&quot;We have to be ready as government, the Bank of England has to be ready as monetary authority, throughout that period to respond to any instability created by that uncertainty and to ensure that the economy continues to operate smoothly,&quot; he said. 
 
The BoE is expected to cut interest rates and possibly announce more stimulus measures on August 4. Hammond has said he could ease fiscal policy in the autumn if more help is needed. 
 
Asked about a comment he made on Friday, that he might &quot;reset&quot; fiscal policy to cope with the Brexit fallout, Hammond said Britain&#39;s still high levels of debt meant it needed a new framework on its public finances to give clarity to markets. 
 
&quot;What that framework will look like will depend on the decisions we make about whether or not any fiscal stimulus is required on the basis of the data we will by then have available,&quot; he said. 
 
(Reuters)

Britain's finance minister accepted the need for some clarity on Brexit, said it's at the top of agenda at the G20

Britain's new finance minister Philip Hammond, under pressure from his peers from around the world, said today there could be more clarity later this year on how the country will exit the European Union. Several nations called on Britain during weekend talks on the world economy to explain how the politically fraught Brexit process will unfold in order to avoid adding a new drag on the long and slow recovery from the financial crisis. "It's right at the top of the agenda here at the G20," Hammond said at the end of the two-day meeting of the Group of 20 leading economies in the Chinese city of Chengdu. "It's a new factor affecting the global economic outlook and it has increased the uncertainty which the world economy faces." Britain was plunged into its biggest political crisis in decades by the June 23 Brexit vote and so far it has resisted calls from some other EU countries to trigger quickly the two-year process for negotiating its exit from the bloc. Prime Minister Theresa May, who has been in her job for less than two weeks, traveled to Germany and France last week to explain why she needed time to come up with an exit strategy. The EU's top economic official, Pierre Moscovici, said the bloc understood that Britain should not be rushed but "at the same time let's not waste time, let's not have too much uncertainty, let's act and choose as swiftly as possible." Hammond told reporters today the two-year negotiating period, once launched, represented "quite a tight timescale" and Britain needed to go into it with clear objectives. "We have to do that before the start of the process because when we serve that notice, we need to hit the ground running," he said. But Hammond also showed he was aware of the need for some clarity on Brexit: "What will start to reduce uncertainty is when we are able to set out more clearly the kind of arrangement we envisage going forward with the European Union." "If our European Union partners respond to such a vision positively - obviously it will be subject to negotiation - so that there is a sense perhaps later this year that we are all on the same page in terms of where we expect to be going, I think that will send a reassuring signal to the business community and to markets," Hammond said. May has said she does not plan to launch the formal negotiation period this year. It remains to be seen if other EU countries would enter informal talks with Britain before the formal negotiations, something they have previously ruled out. Govt, Bank of England have to be ready Financial markets have stabilised after the initial shock of the referendum result which saw the value of the pound plunge by more than 10 per cent and trillions of dollars wiped off stock markets worldwide. But economists are expecting Britain to fall into a recession, according to a Reuters poll. Hammond said he did not think that a survey of British businesses published on Friday, which showed the sharpest fall on record in a purchasing managers index, was a sign that the economy was in already in a recession. "What it does is underscore the hit to confidence," he said. Hammond warned that Brexit-related volatility in markets would be a risk throughout the two-year negotiation period. "We have to be ready as government, the Bank of England has to be ready as monetary authority, throughout that period to respond to any instability created by that uncertainty and to ensure that the economy continues to operate smoothly," he said. The BoE is expected to cut interest rates and possibly announce more stimulus measures on August 4. Hammond has said he could ease fiscal policy in the autumn if more help is needed. Asked about a comment he made on Friday, that he might "reset" fiscal policy to cope with the Brexit fallout, Hammond said Britain's still high levels of debt meant it needed a new framework on its public finances to give clarity to markets. "What that framework will look like will depend on the decisions we make about whether or not any fiscal stimulus is required on the basis of the data we will by then have available," he said. (Reuters)

UK seeks to assuage global worries over path to Brexit

Gold fell on Thursday after rising nearly 1 per cent in the previous session, as the Dollar strengthened against the Yen and Asian stocks stayed near eight-month highs on expectations of an interest rate cut by the Bank of England (BoE). 
 
Investors bet the BoE will cut interest rates for the first time in more than seven years to ward off recession following Britain&#39;s vote to leave the European Union. 
 
The central bank is expected to halve its benchmark interest rate to a record low of 0.25 per cent when it makes a monthly policy statement at 1100 GMT later on Thursday. 
 
Spot gold was down 0.8 per cent at $1,332.33 per ounce by 0639 GMT. It rose about 0.9 per cent on Wednesday, closing at $1,342.45. 
 
&quot;Despite our near-term views that gold may correct further, we believe any losses may be limited and further declines well-bid,&quot; HSBC analyst James Steel said in a note. 
 
Low interest rates boost the appeal of non-interest bearing assets such as bullion. 
 
Spot gold is biased to retest a support at $1,328 per ounce, a break below which could cause a loss to the next support at $1,313, according to Reuters technical analyst Wang Tao. 
 
Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong, said gold prices had steadied due to a number of stabilising factors including the appointment of a new prime minister in the UK, and the expected interest rate cuts by the Japanese and England central banks. 
 
&quot;Major central banks including the Bank of England and the European Central Bank are expected to relax their monetary policies, while the US Federal Reserve is reluctant to raise interest rates. People are expecting these central banks to relax their monetary policies in the wake of the financial and political uncertainty,&quot; he added. 
 
Philadelphia Fed President Patrick Marker said late on Wednesday that the central bank would likely opt for a &quot;fairly shallow&quot; series of US interest rate hikes, and that he wanted to &quot;let it play out a bit&quot; before backing a policy tightening. 
 
The Dollar was up 1 per cent at 105.57 Yen, its post-Brexit high, as investors remained focused on whether the Bank of Japan will expand its monetary stimulus at its policy meeting later this month. 
 
Among other precious metals, spot palladium slipped 0.1 per cent to $640.50 an ounce, after hitting an eight-month high of $647.20 in the previous session. 
 
Silver edged down 0.3 per cent to $20.28 an ounce, while platinum fell 0.7 per cent to $1,086.85 an ounce. 
 
(Reuters)

Investors bet the BoE will cut interest rates for the first time in more than seven years to ward off recession

Gold fell on Thursday after rising nearly 1 per cent in the previous session, as the Dollar strengthened against the Yen and Asian stocks stayed near eight-month highs on expectations of an interest rate cut by the Bank of England (BoE). Investors bet the BoE will cut interest rates for the first time in more than seven years to ward off recession following Britain's vote to leave the European Union. The central bank is expected to halve its benchmark interest rate to a record low of 0.25 per cent when it makes a monthly policy statement at 1100 GMT later on Thursday. Spot gold was down 0.8 per cent at $1,332.33 per ounce by 0639 GMT. It rose about 0.9 per cent on Wednesday, closing at $1,342.45. "Despite our near-term views that gold may correct further, we believe any losses may be limited and further declines well-bid," HSBC analyst James Steel said in a note. Low interest rates boost the appeal of non-interest bearing assets such as bullion. Spot gold is biased to retest a support at $1,328 per ounce, a break below which could cause a loss to the next support at $1,313, according to Reuters technical analyst Wang Tao. Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong, said gold prices had steadied due to a number of stabilising factors including the appointment of a new prime minister in the UK, and the expected interest rate cuts by the Japanese and England central banks. "Major central banks including the Bank of England and the European Central Bank are expected to relax their monetary policies, while the US Federal Reserve is reluctant to raise interest rates. People are expecting these central banks to relax their monetary policies in the wake of the financial and political uncertainty," he added. Philadelphia Fed President Patrick Marker said late on Wednesday that the central bank would likely opt for a "fairly shallow" series of US interest rate hikes, and that he wanted to "let it play out a bit" before backing a policy tightening. The Dollar was up 1 per cent at 105.57 Yen, its post-Brexit high, as investors remained focused on whether the Bank of Japan will expand its monetary stimulus at its policy meeting later this month. Among other precious metals, spot palladium slipped 0.1 per cent to $640.50 an ounce, after hitting an eight-month high of $647.20 in the previous session. Silver edged down 0.3 per cent to $20.28 an ounce, while platinum fell 0.7 per cent to $1,086.85 an ounce. (Reuters)

Gold falls as market pauses ahead of Bank of England policy statement

The Bank of England (BoE) is mulling whether to cut interest rates for the first time in over seven years to curb economic fallout from Britain`s vote to exit the European Union (EU). 
 
The BoE on Thursday concludes its first interest-rate meeting since Britain voted on June 23 to exit the EU and subsequent comments by governor Mark Carney that &quot;some monetary policy easing will likely be required over the summer&quot;. 
 
Jonathan Loynes, economist at Capital Economics research group, said &quot;given that the biggest near-term threat to the economy is uncertainty and its adverse effects on confidence, an interest rate cut could help to re-assure households and markets following the referendum result&quot;. 
 
Political uncertainity gripped Britain after Brexit 
 
While markets are pricing in a cut as early as this week, some analysts believe a drop in the BoE&#39;s main lending rate from 0.50 percent to a new record-low of 0.25 percent or even zero may not now occur until August. 
 
This they say is owing to Theresa May`s quick appointment as Prime Minister having reduced some of the political uncertainty that has gripped Britain since the shock referendum result. 
 
Whether or not a rate cut occurs Thursday or in August, markets expect that by the end of the British summer, the BoE will unveil a fresh means of stimulating the economy, as the government heads into tough negotiations on quitting the EU. 
 
Analysts suggest there could for example be some more cash stimulus pumped around the British economy to encourage lending by commercial banks. 
 
The central bank&#39;s quantitative easing (QE) programme, launched alongside record-low interest rates during the global financial crisis, has enabled an additional &pound;375 billion ($494 billion, 445 billion euros) to move through the economy. 
 
BoE has also vowed to pump&nbsp; &pound;250 billion into markets&nbsp; 
 
The BoE has already taken steps to calm fears over Brexit&#39;s economic fallout when it last week relaxed commercial banks&#39; capital requirements to boost lending to businesses and households. 
 
The move -- which came as the bank&#39;s governor Mark Carney warned that risks to financial stability were materialising following the referendum result -- will boost lending by up to &pound;150 billion and reduce banks&#39; regulatory capital buffers by &pound;5.7 billion. 
 
Addressing MPs for a regular update Tuesday, Carney said demand for credit was set to drop because of uncertainty created by Brexit, adding that the &pound;150 billion lending-boost would be &quot;part of a series of measures&quot; going forward. 
 
Since Brexit, the BoE has also vowed to pump at least &pound;250 billion into money markets if needed to prevent a damaging credit crunch. 
 
Finance minister George Osborne has meanwhile said that the Treasury could expand the so-called Funding for Lending scheme, which provides cheap finance to banks in exchange for increased lending. 
 
&quot;After all the volatility of the past few weeks, odds have increased sharply that the Bank of England could well cut interest rates&quot; on Thursday, said Michael Hewson, chief analyst at trading group CMC Markets. 
 
&quot;It is this expectation that has helped push the pound to new 31-year lows against the US dollar.&quot; 
 
Hewson added, however, that the rate could now remain on hold Thursday as &quot;the political picture has become much more stable&quot;. 
 
David Cameron on Tuesday chaired his final cabinet meeting after six years as Britain`s Prime Minister, with incoming premier May preparing to form a new government to negotiate Britain`s exit from the EU. 
 
(AFP)&nbsp; 
 
&nbsp;

This would be the first interest rate cut in seven years

The Bank of England (BoE) is mulling whether to cut interest rates for the first time in over seven years to curb economic fallout from Britain`s vote to exit the European Union (EU). The BoE on Thursday concludes its first interest-rate meeting since Britain voted on June 23 to exit the EU and subsequent comments by governor Mark Carney that "some monetary policy easing will likely be required over the summer". Jonathan Loynes, economist at Capital Economics research group, said "given that the biggest near-term threat to the economy is uncertainty and its adverse effects on confidence, an interest rate cut could help to re-assure households and markets following the referendum result". Political uncertainity gripped Britain after Brexit While markets are pricing in a cut as early as this week, some analysts believe a drop in the BoE's main lending rate from 0.50 percent to a new record-low of 0.25 percent or even zero may not now occur until August. This they say is owing to Theresa May`s quick appointment as Prime Minister having reduced some of the political uncertainty that has gripped Britain since the shock referendum result. Whether or not a rate cut occurs Thursday or in August, markets expect that by the end of the British summer, the BoE will unveil a fresh means of stimulating the economy, as the government heads into tough negotiations on quitting the EU. Analysts suggest there could for example be some more cash stimulus pumped around the British economy to encourage lending by commercial banks. The central bank's quantitative easing (QE) programme, launched alongside record-low interest rates during the global financial crisis, has enabled an additional £375 billion ($494 billion, 445 billion euros) to move through the economy. BoE has also vowed to pump £250 billion into markets The BoE has already taken steps to calm fears over Brexit's economic fallout when it last week relaxed commercial banks' capital requirements to boost lending to businesses and households. The move -- which came as the bank's governor Mark Carney warned that risks to financial stability were materialising following the referendum result -- will boost lending by up to £150 billion and reduce banks' regulatory capital buffers by £5.7 billion. Addressing MPs for a regular update Tuesday, Carney said demand for credit was set to drop because of uncertainty created by Brexit, adding that the £150 billion lending-boost would be "part of a series of measures" going forward. Since Brexit, the BoE has also vowed to pump at least £250 billion into money markets if needed to prevent a damaging credit crunch. Finance minister George Osborne has meanwhile said that the Treasury could expand the so-called Funding for Lending scheme, which provides cheap finance to banks in exchange for increased lending. "After all the volatility of the past few weeks, odds have increased sharply that the Bank of England could well cut interest rates" on Thursday, said Michael Hewson, chief analyst at trading group CMC Markets. "It is this expectation that has helped push the pound to new 31-year lows against the US dollar." Hewson added, however, that the rate could now remain on hold Thursday as "the political picture has become much more stable". David Cameron on Tuesday chaired his final cabinet meeting after six years as Britain`s Prime Minister, with incoming premier May preparing to form a new government to negotiate Britain`s exit from the EU. (AFP)

Bank of England mulls rate cut to curb Brexit fallout

The Bank of England (BoE) took steps to ensure British banks can keep lending and insurers do not dump corporate bonds in the &#39;challenging&#39; period that is likely to follow the country&#39;s shock vote to leave the European Union (EU). 
 
The central bank said it would lower the amount of capital banks are required to hold in reserve, freeing up an extra 150 billion Pounds for lending in a reversal of a decision it took earlier this year, when it started tightening screws on lenders because Britain&#39;s economy appeared on course for more growth. 
 
BoE Governor Mark Carney said the move represented a &#39;major change&#39; that would help the economy to weather the Brexit hit. 
 
&quot;It means that three quarters of UK banks, accounting for 90 per cent of the stock of UK lending, will immediately have greater flexibility to supply credit to UK households and firms,&quot; he told reporters. 
 
Sterling dropped more than 10 per cent against the dollar and banks&#39; share prices fell by a fifth after Britons voted on June 23 to leave the EU, prompting Prime Minister David Cameron to say he would step down. 
 
Sterling touched a new, 31-year low against the US dollar earlier on Tuesday, hurt by Standard Life&#39;s suspension of trading in its British real estate fund but recovered some of its losses after the BoE announcement and Carney&#39;s comments. 
 
Twenty and 30-year British government bond yields briefly touched new record lows. 
 
With uncertainty about the future of George Osborne as finance minister, more responsibility has fallen on Carney and his fellow BoE policymakers to steer Britain through its worst political crisis in decades. 
 
Fresh signs of weakness in the economy appeared on Tuesday. 
 
Business confidence fell sharply in the days after the vote to leave the EU, a survey showed, and retailer John Lewis said its sales grew more slowly last week. 
 
Furthermore, Britain&#39;s dominant services industry grew at its slowest pace in three years in June, according to a survey conducted mostly before the referendum. 
 
The central bank said it was closely monitoring investors&#39; willingness to fund Britain&#39;s large current account deficit after the shock outcome of the vote, as well as high levels of household debt and the subdued global economy. 
 
Carney said the fall in sterling should help ease the balance of payments shortfall but the pace of investment would also be important. 
 
The central bank said risks it had identified before the referendum were starting to materialise, including lower demand for commercial property. 
 
BREXIT RISKS 
 
The announcement by the BoE on bank capital, after two meetings of its Financial Policy Committee since the referendum, followed an unusually explicit comment by Carney last week that he believed the BoE would ease monetary policy soon too. 
 
&quot;These measures are really about Carney aligning the Bank of England&#39;s guns in case the UK economy enters a downturn,&quot; Aberdeen Asset Management Investment Manager James Athey said. 
 
&quot;He&#39;s not waiting for anything bad to happen but rather acting in case it does.&quot; 
 
The BoE said risks it had identified before the vote were materialising, including lower demand for commercial property. 
 
As part of its announcement on Tuesday, the BoE reversed a decision it took in March to increase the amount of capital banks must hold against cyclical upturns in the credit cycle. 
 
Holding the so-called counter-cyclical capital buffer (CCB) at zero until at least June 2017 would reduce banks&#39; capital requirements by 5.7 billion Pounds, potentially freeing up an extra 150 billion Pounds for lending, the BoE said. 
 
The BoE also gave insurers more time to adjust to new EU capital rules to avoid pressuring them to dump corporate bonds and avoid high capital charges as interest rates plunge. 
 
Before the referendum, consumer borrowing was rising at its fastest rate in a decade while mortgage lending had eased slightly as higher taxes on landlords and second-home buyers took effect in April. 
 
The BoE said it would keep a close eye on the buy-to-let mortgage sector, in case landlords sell up as property prices fall, as well as on the rising numbers of vulnerable indebted households. 
 
It expressed concern about a fall in investor demand for British assets - which could make it harder for the country to finance its large current account deficit - as well as trouble in commercial real estate making it harder for businesses to use their property as collateral to obtain loans. 
 
(Reuters)

The central bank said it would lower the amount of capital banks are required to hold in reserve, freeing up an extra 150 billion Pounds

The Bank of England (BoE) took steps to ensure British banks can keep lending and insurers do not dump corporate bonds in the 'challenging' period that is likely to follow the country's shock vote to leave the European Union (EU). The central bank said it would lower the amount of capital banks are required to hold in reserve, freeing up an extra 150 billion Pounds for lending in a reversal of a decision it took earlier this year, when it started tightening screws on lenders because Britain's economy appeared on course for more growth. BoE Governor Mark Carney said the move represented a 'major change' that would help the economy to weather the Brexit hit. "It means that three quarters of UK banks, accounting for 90 per cent of the stock of UK lending, will immediately have greater flexibility to supply credit to UK households and firms," he told reporters. Sterling dropped more than 10 per cent against the dollar and banks' share prices fell by a fifth after Britons voted on June 23 to leave the EU, prompting Prime Minister David Cameron to say he would step down. Sterling touched a new, 31-year low against the US dollar earlier on Tuesday, hurt by Standard Life's suspension of trading in its British real estate fund but recovered some of its losses after the BoE announcement and Carney's comments. Twenty and 30-year British government bond yields briefly touched new record lows. With uncertainty about the future of George Osborne as finance minister, more responsibility has fallen on Carney and his fellow BoE policymakers to steer Britain through its worst political crisis in decades. Fresh signs of weakness in the economy appeared on Tuesday. Business confidence fell sharply in the days after the vote to leave the EU, a survey showed, and retailer John Lewis said its sales grew more slowly last week. Furthermore, Britain's dominant services industry grew at its slowest pace in three years in June, according to a survey conducted mostly before the referendum. The central bank said it was closely monitoring investors' willingness to fund Britain's large current account deficit after the shock outcome of the vote, as well as high levels of household debt and the subdued global economy. Carney said the fall in sterling should help ease the balance of payments shortfall but the pace of investment would also be important. The central bank said risks it had identified before the referendum were starting to materialise, including lower demand for commercial property. BREXIT RISKS The announcement by the BoE on bank capital, after two meetings of its Financial Policy Committee since the referendum, followed an unusually explicit comment by Carney last week that he believed the BoE would ease monetary policy soon too. "These measures are really about Carney aligning the Bank of England's guns in case the UK economy enters a downturn," Aberdeen Asset Management Investment Manager James Athey said. "He's not waiting for anything bad to happen but rather acting in case it does." The BoE said risks it had identified before the vote were materialising, including lower demand for commercial property. As part of its announcement on Tuesday, the BoE reversed a decision it took in March to increase the amount of capital banks must hold against cyclical upturns in the credit cycle. Holding the so-called counter-cyclical capital buffer (CCB) at zero until at least June 2017 would reduce banks' capital requirements by 5.7 billion Pounds, potentially freeing up an extra 150 billion Pounds for lending, the BoE said. The BoE also gave insurers more time to adjust to new EU capital rules to avoid pressuring them to dump corporate bonds and avoid high capital charges as interest rates plunge. Before the referendum, consumer borrowing was rising at its fastest rate in a decade while mortgage lending had eased slightly as higher taxes on landlords and second-home buyers took effect in April. The BoE said it would keep a close eye on the buy-to-let mortgage sector, in case landlords sell up as property prices fall, as well as on the rising numbers of vulnerable indebted households. It expressed concern about a fall in investor demand for British assets - which could make it harder for the country to finance its large current account deficit - as well as trouble in commercial real estate making it harder for businesses to use their property as collateral to obtain loans. (Reuters)

Bank of England takes steps to ensure British banks keep lending

Bank of England governor Mark Carney said on Friday the central bank was ready to provide 250 billion Pounds ($345.93 billion) of additional funds to support financial markets after Britain voted to leave the European Union. 
 
&quot;We are well prepared for this. Her Majesty&#39;s Treasury and the Bank of England have engaged in extensive contingency planning and the Chancellor and I have remained in close contact, including through the night and this morning,&quot; he said. 
 
Carney also said the central bank will consider whether to take additional policy responses in the coming weeks. 
 
&quot;In the future we will not hesitate to take any additional measures required to meet our responsibilities as the United Kingdom moves forward,&quot; he said. 
 
Global financial markets plunged as results from Thursday&#39;s referendum showed a near 52-48 per cent split for leaving. 
 
(Reuters)

Her Majesty's Treasury and the central bank have been planning a contingency scheme, says Mark Carney

Bank of England governor Mark Carney said on Friday the central bank was ready to provide 250 billion Pounds ($345.93 billion) of additional funds to support financial markets after Britain voted to leave the European Union. "We are well prepared for this. Her Majesty's Treasury and the Bank of England have engaged in extensive contingency planning and the Chancellor and I have remained in close contact, including through the night and this morning," he said. Carney also said the central bank will consider whether to take additional policy responses in the coming weeks. "In the future we will not hesitate to take any additional measures required to meet our responsibilities as the United Kingdom moves forward," he said. Global financial markets plunged as results from Thursday's referendum showed a near 52-48 per cent split for leaving. (Reuters)

Bank of England to supply 250 billion Pounds to help markets after Brexit vote

<div style="text-align: justify;">If Britons vote to take their country out of the European Union on June 23, no corner of the global financial market complex will emerge unscathed. 
The invisible thread that links assets as diverse as gold, bank stocks, the Japanese Yen and government bonds would be yanked sharply by Brexit, an event the Bank of England said on Thursday risks &quot;adverse spill-overs to the global economy&quot;. 
With global interest rates and bond yields the lowest on record, central banks running low on crisis-fighting tools and the post-2008 economic recovery flagging, that thread could quickly unravel, with serious consequences for all markets.&nbsp; 
So why will the will of one country&#39;s people in one referendum have such a profound impact on global markets? 
The answer is partly how inter-connected global markets are, and partly timing - the world economic cycle is already very long in the tooth and central banks have far fewer options open to them after nearly a decade of extraordinary policy support. 
Interest rates, yields 
 
Global interest rates are their lowest for 5,000 years, according to Bank of America, but central banks could still cut them further. That could mean the US&nbsp;Federal Reserve reversing its slow-starting tightening cycle, and European Central Bank and Bank of Japan rates going deeper into negative territory. 
Lower rates would also depress bond yields even further, tightening the screw on central and commercial banks. 
 
Over $8 trillion worth of sovereign bonds already carry a negative yield, according to JP Morgan. This means holders of Japanese, German and Swiss debt are paying these governments for the privilege of lending to them, in some cases out to 20 years. 
 
They are willing to accept they will not get all their money back. Even deeper negative yields would increase these losses, raising further doubt that these are truly &quot;safe haven&quot; assets. 
 
But the immediate economic and political uncertainty after a Brexit vote would likely be so great that demand for these bonds would rise anyway, pulling yields even lower. Yield curves, the difference between short- and longer-dated bond borrowing costs, would flatten further. 
 
They are already their flattest for years around the developed world, meaning the premium investors expect for holding longer-dated bonds is shrinking. This is often an ominous signal of low inflation or deflation, and slowing economic growth or possibly recession. 
 
If &quot;core&quot; bond yields would likely fall, yields on lower-rated and riskier bonds would likely rise, widening the spread between the two. This would increase the financing pressure on a wide range of companies around the world and governments in euro zone &quot;periphery&quot; countries like Greece, Italy and Spain. 
 
Banks - Central and Commercial 
 
Flat yield curves are bad news for banks, who make money from borrowing short-term at low rates and lending longer-term at higher rates. Financial stocks have been hit hard this year as the curve flattening has accelerated. 
 
Euro zone banks are down 30 per cent this year, Japanese banks 35 per cent, UK banks 20 per cent, and US banks 10 per cent. 
 
Banks are also being squeezed by negative deposit rates. The ECB, Bank of Japan and Swiss National Bank all charge banks for depositing cash. 
 
It may even become cheaper for banks to put billions of yen, Euros or Francs of their customers&#39; cash in vaults- a possibility German lender Commerzbank is examining. 
 
As for central banks, any move deeper into the uncharted world of negative interest rates would be taken reluctantly. 
 
In the case of the ECB, declining yields would further cut the amount of bonds eligible for purchase as part of its quantitative easing stimulus programme. That would make its inflation target of just under 2 per cent much harder to achieve, in turn putting its credibility under even greater scrutiny. 
 
Financial Planning 
 
Just as the 2007-08 financial crisis was caused by unprecedented stress in the banking system, analysts fear Brexit fallout could again threaten to block the global financial system&#39;s plumbing. 
 
Banks have recovered from 2007-08, but stresses are already appearing in more obscure pockets of dollar-based FX and rates markets that are hitting levels more associated with periods of crisis. The premium for Dollars over Yen in the cross currency basis market is its highest in years. 
 
Spreads between Libor rates and overnight index swap (OIS) rates, broadly a measure of investors&#39; perception of credit risk in the banking system, are also widening. In normal conditions, Libor/OIS spreads should be virtually zero. 
 
Stocks 
 
World stocks are in their longest bull run in history that began on March 9, 2009. But Wall Street&#39;s peak was reached over a year ago, profit growth has slumped, and companies are reluctant to reinvest their record cash piles. 
 
European stocks are down 13 per cent this year, Japan down 20 per cent, and Wall Street is flat. Would they be able to withstand the political, economic and investment shock a Brexit would likely deliver, especially with risk appetite so fragile? 
 
Currencies 
 
Like 2008, a vote for Brexit would almost certainly increase demand for the pre-eminent currency in global trade, banking and financial market trading: the Dollar. 
 
Dollar credit to non-US banks stands at almost $10 trillion, according to the Bank for International Settlements, of which $3.3 trillion is in emerging markets. A stronger Dollar will increase the overall debt burden for these companies, and many emerging market countries, who would be forced to draw down their FX reserves to counter the expected capital outflow and downward pressure on their currencies. 
 
Japan&#39;s Yen, another safe-haven currency, would probably rise too, perhaps as much as 14 per cent, according to Goldman Sachs. This would not be welcome in Tokyo, where policymakers are struggling to kill off deflation once and for all, stoke inflation, reflate the economy and heal the banking system. A higher exchange rate would be damaging on all those fronts. 
 
(Reuters)</div>

World stocks are in their longest bull run in history that began on 9 March, 2009

If Britons vote to take their country out of the European Union on June 23, no corner of the global financial market complex will emerge unscathed. The invisible thread that links assets as diverse as gold, bank stocks, the Japanese Yen and government bonds would be yanked sharply by Brexit, an event the Bank of England said on Thursday risks "adverse spill-overs to the global economy". With global interest rates and bond yields the lowest on record, central banks running low on crisis-fighting tools and the post-2008 economic recovery flagging, that thread could quickly unravel, with serious consequences for all markets. So why will the will of one country's people in one referendum have such a profound impact on global markets? The answer is partly how inter-connected global markets are, and partly timing - the world economic cycle is already very long in the tooth and central banks have far fewer options open to them after nearly a decade of extraordinary policy support. Interest rates, yields Global interest rates are their lowest for 5,000 years, according to Bank of America, but central banks could still cut them further. That could mean the US Federal Reserve reversing its slow-starting tightening cycle, and European Central Bank and Bank of Japan rates going deeper into negative territory. Lower rates would also depress bond yields even further, tightening the screw on central and commercial banks. Over $8 trillion worth of sovereign bonds already carry a negative yield, according to JP Morgan. This means holders of Japanese, German and Swiss debt are paying these governments for the privilege of lending to them, in some cases out to 20 years. They are willing to accept they will not get all their money back. Even deeper negative yields would increase these losses, raising further doubt that these are truly "safe haven" assets. But the immediate economic and political uncertainty after a Brexit vote would likely be so great that demand for these bonds would rise anyway, pulling yields even lower. Yield curves, the difference between short- and longer-dated bond borrowing costs, would flatten further. They are already their flattest for years around the developed world, meaning the premium investors expect for holding longer-dated bonds is shrinking. This is often an ominous signal of low inflation or deflation, and slowing economic growth or possibly recession. If "core" bond yields would likely fall, yields on lower-rated and riskier bonds would likely rise, widening the spread between the two. This would increase the financing pressure on a wide range of companies around the world and governments in euro zone "periphery" countries like Greece, Italy and Spain. Banks - Central and Commercial Flat yield curves are bad news for banks, who make money from borrowing short-term at low rates and lending longer-term at higher rates. Financial stocks have been hit hard this year as the curve flattening has accelerated. Euro zone banks are down 30 per cent this year, Japanese banks 35 per cent, UK banks 20 per cent, and US banks 10 per cent. Banks are also being squeezed by negative deposit rates. The ECB, Bank of Japan and Swiss National Bank all charge banks for depositing cash. It may even become cheaper for banks to put billions of yen, Euros or Francs of their customers' cash in vaults- a possibility German lender Commerzbank is examining. As for central banks, any move deeper into the uncharted world of negative interest rates would be taken reluctantly. In the case of the ECB, declining yields would further cut the amount of bonds eligible for purchase as part of its quantitative easing stimulus programme. That would make its inflation target of just under 2 per cent much harder to achieve, in turn putting its credibility under even greater scrutiny. Financial Planning Just as the 2007-08 financial crisis was caused by unprecedented stress in the banking system, analysts fear Brexit fallout could again threaten to block the global financial system's plumbing. Banks have recovered from 2007-08, but stresses are already appearing in more obscure pockets of dollar-based FX and rates markets that are hitting levels more associated with periods of crisis. The premium for Dollars over Yen in the cross currency basis market is its highest in years. Spreads between Libor rates and overnight index swap (OIS) rates, broadly a measure of investors' perception of credit risk in the banking system, are also widening. In normal conditions, Libor/OIS spreads should be virtually zero. Stocks World stocks are in their longest bull run in history that began on March 9, 2009. But Wall Street's peak was reached over a year ago, profit growth has slumped, and companies are reluctant to reinvest their record cash piles. European stocks are down 13 per cent this year, Japan down 20 per cent, and Wall Street is flat. Would they be able to withstand the political, economic and investment shock a Brexit would likely deliver, especially with risk appetite so fragile? Currencies Like 2008, a vote for Brexit would almost certainly increase demand for the pre-eminent currency in global trade, banking and financial market trading: the Dollar. Dollar credit to non-US banks stands at almost $10 trillion, according to the Bank for International Settlements, of which $3.3 trillion is in emerging markets. A stronger Dollar will increase the overall debt burden for these companies, and many emerging market countries, who would be forced to draw down their FX reserves to counter the expected capital outflow and downward pressure on their currencies. Japan's Yen, another safe-haven currency, would probably rise too, perhaps as much as 14 per cent, according to Goldman Sachs. This would not be welcome in Tokyo, where policymakers are struggling to kill off deflation once and for all, stoke inflation, reflate the economy and heal the banking system. A higher exchange rate would be damaging on all those fronts. (Reuters)

Tracing global market thread that could be unraveled by Brexit

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