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☆ Bank of England Cuts Interest Rates for First Time Since 2020
▼ + stars: | 2024-08-01 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: 1 min

The Bank of England decided, by a slim margin among its policymakers, to cut interest rates on Thursday for the first time in more than four years amid slower inflation. Britain’s central bank lowered rates by a quarter of a percentage point to 5 percent, the first rate cut since March 2020, when the coronavirus pandemic shut down large parts of the economy. The rate cut brings an end to the most aggressive efforts of the central bank to stamp out high inflation, which reached double-digits less than two years ago. For the past year, interest rates were held at 5.25 percent, the highest level since 2008. But policymakers warned that interest rates would be lowered slowly, which would keep the policy stance restrictive for awhile.

Organizations: of England

☆ What We Know About the Global Outage
▼ + stars: | 2024-07-19 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: 1 min

Across the world, critical businesses and services including airlines, hospitals, train networks and TV stations, are being disrupted by a global tech outage affecting Microsoft users. In many countries, flights have been grounded, workers couldn’t access their systems and, in some cases, customers haven’t been able to make card payments in stores. A series outages rippled across the globe as information displays, login systems and broadcasting networks went dark. The problem affecting the majority of services was caused by a flawed update by CrowdStrike, an American cybersecurity firm, whose systems are designed to protect users from hackers. Microsoft said on Friday that it was aware of an issue affecting machines running “CrowdStrike Falcon.”

Persons: haven’t, ” Organizations: Microsoft Locations: American

☆ Who Is Rachel Reeves, the Woman Taking the Helm of Britain’s Economy?
▼ + stars: | 2024-07-05 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

Rachel Reeves became Britain’s first female chancellor of the Exchequer on Friday, taking on one of the country’s four great offices of state, with responsibility for managing Britain’s budget. After a decade and a half of economic stagnation, Ms. Reeves, a Labour lawmaker with a reputation as a serious and steady manager, faces the tough jobs of boosting Britain’s productivity growth, a key measure of prosperity, and of reviving struggling public services. “I know the scale of the challenge that I’m likely to inherit,” Ms. Reeves told the BBC early Friday. “There’s not a huge amount of money there,” she said, adding that the party needed to unlock private investment. Ms. Reeves is expected to approach her new role with deliberation.

Persons: Rachel Reeves, Britain’s, Reeves, ” Ms, “ There’s, ”, ” Carys Roberts Organizations: Labour, BBC, Institute for Public Policy Research

☆ Liz Truss Caps List of High-Profile Conservative Seat Losses
▼ + stars: | 2024-07-05 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

Liz Truss, the former Conservative Party prime minister, lost her seat Friday morning. Five years ago, she won a majority of more than 26,000. This time, she lost by 630 votes, a huge swing in support to the Labour Party. She told the BBC that the reason the Conservatives lost was because “we haven’t delivered sufficiently on the policies people want,” such as keeping taxes low and reducing immigration. “During our 14 years in power, unfortunately, we did not do enough to take on the legacy we’d been left,” she said.

Persons: Liz Truss, we’d, ” Organizations: Conservative Party, Labour Party, BBC

☆ E.C.B. Holds Rates Steady as Markets Look for Hints on First Cut
▼ + stars: | 2024-04-11 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

The European Central Bank held interest rates steady on Thursday, keeping the deposit rate at 4 percent, the highest in central bank’s history. It was the fifth consecutive decision to leave rates untouched as inflation closes in on the central bank’s 2 percent target. Central bankers have been trying to work out the delicate timing of when to loosen their rate policy. They don’t want to keep rates higher longer than necessary, which could hurt the economies of the eurozone, but at the same time, they don’t want to ease too early and revive price pressures. In March, core inflation slowed more than economists expected, to 2.9 percent.

Organizations: European Central Bank

☆ When Will the European Central Bank Start Cutting Rates?
▼ + stars: | 2024-01-25 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

For months, rates have been set at the highest in the European Central Bank’s history. Despite the protests of the eurozone’s policymakers, investors have been betting that the central bank will cut rates quite soon — possibly in April. Traders figure rates must come down because inflation has slowed notably — it’s been below 3 percent since October — and the region’s economy is weak. By the end of year, the central bank will have cut rates by more than 1 percentage point, or between five and six quarter-point cuts, trading in financial markets implied. Many of the central bank’s Governing Council are wary of declaring victory over inflation too soon, lest it settle above the bank’s target of 2 percent.

Persons: —, it’s Locations: Europe

☆ As Economy Sputters, U.K. Cuts Taxes Ahead of Election
▼ + stars: | 2023-11-22 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +2 min

Last week, data showed that Britain’s inflation rate had dropped to 4.6 percent in October, and Mr. Sunak declared victory in his pledge to halve inflation this year. The government’s fiscal credibility was also severely damaged by the unfunded tax cuts of Liz Truss’s short premiership. When he was installed as chancellor a year ago, Mr. Hunt took a cautious approach to the nation’s money and abandoned nearly all of Ms. Truss’s plans. He said there was little scope for spending increases and tax cuts because debt levels needed to be cut and the government had to be careful not to stoke inflationary pressures. Now with the election in sight, Mr. Hunt has found the money to offer some sweeteners in the form of lower taxes and even a freeze on alcohol duty.

Persons: ” Mr, Hunt, Rishi Sunak, Sunak, Liz Truss’s, Truss’s, Stephen Castle Organizations: Bank of England’s Locations: United States, Western Europe

☆ U.K. Inflation Slows to 4.6 Percent, Lowest in Two Years
▼ + stars: | 2023-11-15 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +3 min

Food inflation, which had taken over from energy as the main driver of inflation in recent months, also slowed in October. For example, officials look at core inflation, a measure that excludes food and energy prices, because they can be volatile and heavily influenced by international financial markets. Policymakers also track wage growth, one of the stickier aspects of inflation. Price growth in the services sector, which is heavily influenced by companies’ wage costs, slowed to 6.6 percent. Controlling inflation is actually in the hands of Bank of England policymakers who are mandated to return inflation sustainably to 2 percent.

Persons: Rishi Sunak, Huw Pill, Pill Organizations: Bank of England Locations: Ukraine, Britain, Bristol, British

☆ U.K. Economy Stagnates as High Interest Rates Take Toll
▼ + stars: | 2023-11-10 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +4 min

The services sector contracted last quarter as the highest interest rates since 2008 have weighed on the housing industry. Britain’s weak economy mirrors the stagnation in Europe, where eurozone economies contracted 0.1 percent in the third quarter. Across the region, high interest rates intended to drive down inflation are weakening economic activity, with demand for loans dropping and consumer spending slowing. This contrasts with the United States, where the economy is growing strongly and defying expectations for a slowdown prompted by high interest rates. This weak outlook is driven by high interest rates, which are expected to have an increasingly heavy toll on the economy.

Persons: ”, Stephen Millard, Jeremy Hunt, Hunt Organizations: Bank of England, National Institute of Economic, Social Research Locations: Europe, United States, Germany

☆ Bank of England Holds Rates Steady as Fight Against Inflation Continues
▼ + stars: | 2023-11-02 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

The Bank of England held interest rates at the highest levels in 15 years on Thursday, though policymakers were again divided on the best course of action to stamp out high inflation. Six members of the central bank’s nine-member rate-setting committee voted to keep rates at 5.25 percent amid signs that inflation would continue to ease and the economy was weakening. “Higher interest rates are working and inflation is falling,” Andrew Bailey, the governor of the bank, said in a written statement. The forecasts also highlighted the challenge policymakers face eradicating high inflation, which stuck at 6.7 percent in September. In 2024 and 2025, the inflation rate is expected to be slightly higher than was forecast a few months ago.

Persons: ” Andrew Bailey Organizations: of England

☆ In Global Race to Offer Green Subsidies, U.K. Prefers Slow and Steady
▼ + stars: | 2023-10-31 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

The question of how Britain will respond to President Biden’s Inflation Reduction Act, the $369 billion landmark legislation offering deep subsidies for green investment, has followed Jeremy Hunt, Britain’s finance minister, for most of the past year. Mr. Hunt urged patience and promised an answer when he updates the country’s budget in a few weeks. But as that speech approaches, expectations that he will offer anything as generous as the American largess have been squashed. Britain, which is facing strict fiscal constraints, won’t have a “subsidy bowl” like the United States, Mr. Hunt said last month. They also say Britain, and other countries, will eventually benefit from the technological advances that U.S. subsidies support.

Persons: Biden’s, Jeremy Hunt, . Hunt, Hunt Locations: Britain, United States

☆ What Is Going On in Britain’s Economy? The Picture Is Foggy.
▼ + stars: | 2023-10-26 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

Tuesday’s data showed that the labor market was continuing to cool, following the same trend as the previous month, with more unemployment and fewer job vacancies. The Bank of England has raised interest rates to their highest level since 2008, and officials have signaled they will remain high well into next year. But the latest labor market release needs to be taken “with a huge pinch of salt,” Philip Shaw, an economist at Investec, wrote in an analyst note. Policymakers at the Bank of England have “lost another important set of figures” to guide them in setting interest rates, he argued. Last month, the statistics office issued a particularly large upward revision to the size of the economy after pandemic lockdowns.

Persons: ” Philip Shaw Organizations: Bank of England, Investec, Statisticians, Labor Force Survey

☆ European Central Bank Keeps Rates on Hold for First Time in Over a Year
▼ + stars: | 2023-10-26 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

The European Central Bank held interest rates steady on Thursday for the first time in over a year as policymakers moved into their next phase of fighting inflation. Officials have shifted their focus to how long they will need to maintain high interest rates in order to push inflation all the way down to the central bank's target. “Inflation is still expected to stay too high for too long, and domestic price pressures remain strong,” the central bank said in a statement. The decision to hold interest rates was telegraphed last month when, after their 10th consecutive increase, policymakers signaled they might be done. But the rate isn’t forecast to return to the central bank’s 2 percent target until the third quarter of 2025, the central bank’s staff projected last month.

Persons: “ Organizations: European Central Bank

☆ Bank of England Keeps Rates Steady for First Time in Nearly Two Years
▼ + stars: | 2023-09-21 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +2 min

The central bank began its tightening cycle in December 2021, raising rates from near zero to levels last seen during the financial crisis of 2008. The central bank has said Ben Bernanke, the former U.S. Federal Reserve chair, will lead a review into the bank’s forecasting processes. But this week, some news landed in the central bank’s favor. Better still for the central bank, measures of domestic inflationary pressures also slowed. As inflation rates drop across much of the world and economies are weakening, in part because of the aggressive policy tightening by central banks, policymakers are trying to carefully calibrate the right level of interest rates.

Persons: Ben Bernanke Organizations: U.S . Federal

☆ U.K. Inflation Rate Slips Lower for Third Straight Month
▼ + stars: | 2023-09-20 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +3 min

Deeper Into the Numbers: Core inflation slowed faster than expected. A key gauge of domestic price pressures is core inflation, which strips out energy and food costs. Last month, the annual rate of core inflation fell to 6.2 percent, from 6.9 percent in July, a faster decline than economists predicted. Rising energy prices pushed up inflation in the United States last month and added to inflation pressures in other European countries. Wednesday’s inflation data was lower than the central bank forecast last month, a positive surprise, that is likely to increase expectations that the bank will pause this week.

Persons: Rishi Sunak, Jeremy Hunt Organizations: Government, Bank of England Locations: Britain, United States

☆ Hollywood Strikes Send a Chill Through Britain’s Film Industry
▼ + stars: | 2023-09-19 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

What do “Barbie,” “Mission: Impossible — Dead Reckoning” and “Indiana Jones and the Dial of Destiny” have in common? Besides being the summer’s big-budget movies, they were made in Britain, filmed in part at some of the country’s most esteemed studios. Big Hollywood productions are a critical part of Britain’s film and television industry. For years, they have brought in money, jobs and prestige, and helped make the sector a bright spot in Britain’s economy. Throughout the late summer months, when the industry would be at its busiest to take advantage of the long days, soundstages at Pinewood, Britain’s largest studios, were instead nearly empty.

Persons: Barbie, Indiana Jones, ”, “ Organizations: Big Hollywood, “ Locations: Britain, United States, Hollywood, Pinewood

☆ European Central Bank Raises Rates for a 10th Time
▼ + stars: | 2023-09-14 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

The European Central Bank on Thursday raised interest rates for a 10th consecutive time in an effort to force inflation down. The bank lifted its three key interest rates by a quarter of a percentage point, raising the deposit rate to 4 percent, the highest in the central bank’s two-decade history. “Inflation continues to decline but is still expected to remain too high for too long,” the central bank said in a statement. This week, analysts were evenly split on whether policymakers would raise interest rates again or pause. As the meeting approached, bets by investors in financial markets tilted toward a slightly higher chance that the bank would raise rates.

Organizations: European Central Bank

☆ Inflation Rate in Eurozone Holds Steady
▼ + stars: | 2023-08-31 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +3 min

By Country: Higher energy prices add to inflation pressures in the region’s largest economies. In some of the eurozone’s largest economies, rebounding energy prices offset slowing food inflation. The annual rate of inflation accelerated to 5.7 percent in France and to 2.4 percent in Spain this month. In Spain, inflation had fallen below 2 percent, the European Central Bank’s target, in June, but has since climbed back above it. The acceleration of inflation in some of the region’s largest economies arrives two weeks before the European Central Bank’s next policy meeting.

Persons: Christine Lagarde, ”, Isabel Schnabel Organizations: European Union, European Central Bank, Central Bank’s Locations: France, Spain, Germany, Europe’s

☆ How Ozempic and Weight Loss Drugs Are Reshaping This Country’s Economy
▼ + stars: | 2023-08-28 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +2 min

But Denmark keeps the krone pegged to the euro, and so when the krone rises in value, “the central bank has to respond,” he added. The central bank has been spending kroner to purchase foreign exchange and building up reserves. Because of these purchases, the central bank has also increased the gap between Denmark’s interest rates and the ones set by the European Central Bank. The central bank declined to comment for this article. It caused the country’s currency to soar, in the process making other exports expensive and uncompetitive and hampering the overall Dutch economy.

Persons: Mr, Pedersen, Helge J Organizations: Novo Nordisk, krone, Danske Bank, European Central Bank, —, Nokia Locations: United States, Denmark

As the rate of food price inflation eases in the United States and Europe, analysts are warning of a new era of volatility in global food prices, ushered in by a series of threats coming together in unprecedented ways. A combination of calamities — extreme weather, Russia’s targeting of grain supplies in Ukraine and some countries’ growing willingness to erect protectionist barriers to food trade — has left food supplies more vulnerable and less prepared to absorb any one disruption, analysts say. “This is the new normal now, with more volatility and unpredictability, whether that’s in commodity prices or food prices,” said Dennis Voznesenski, a commodities analyst at Rabobank in Sydney, Australia. Even without major disruptions, food prices can be variable, and many factors play into the price of a bushel of wheat or loaf of bread.

Persons: —, ”, Dennis Voznesenski Organizations: Rabobank Locations: United States, Europe, Ukraine, Sydney, Australia

☆ The Bank of England Raises Rates Again
▼ + stars: | 2023-08-03 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

Alongside its policy decision, the central bank published new inflation and economic forecasts. Policymakers said they would make sure interest rates were “sufficiently restrictive for sufficiently long” to push inflation down to their target level. As interest rates have climbed and inflation has slowed, policymakers around the world are trying to determine the right level of monetary policy tightness. They want to push interest rates high enough to stamp out high inflation, without making economic conditions so restrictive that they push their economies into recessions, high unemployment and deflation. Last week, the European Central Bank and Federal Reserve both raised interest rates by a quarter of a percentage point.

Persons: Rishi Sunak, Christine Lagarde, ” Organizations: European Central Bank, Federal Reserve Locations: Britain

The United States and Europe have wrestled for months with the question of how to pay for Ukraine’s reconstruction from the war. As Russia pounds cities, factories and infrastructure in Ukraine, the estimated costs have swelled to $500 billion, with some experts citing numbers as high as $1 trillion. One solution seemed brilliant in its simplicity: What better way to foot the bill, and to make a moral point, than to make Russia pay? Experts warn that it would likely violate international law and potentially set a dangerous precedent for countries to take the assets of others. The money once seemed easily within reach — since the beginning of the full-scale Russian invasion, Western nations have frozen more than $330 billion in Russian Central Bank assets held abroad.

Organizations: Russian Central Bank Locations: States, Europe, Russia, Ukraine, —

☆ European Central Bank Raises Rates Again, as Inflation Remains ‘Too High’
▼ + stars: | 2023-07-27 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: 1 min

The European Central Bank raised interest rates for a ninth consecutive time on Thursday in its mission to rein in inflation in the region’s economy. Policymakers raised rates for the 20 countries that use the euro currency by a quarter percentage point, pushing the deposit rate up to 3.75 percent, the highest since late 2000. “Inflation continues to decline but is still expected to remain too high for too long,” the central bank said in a statement on Thursday. The pace of consumer price increases has slowed in recent months but policymakers have warned that they still face a difficult challenge returning inflation to the bank’s 2 percent target.

Organizations: European Central Bank

☆ A Prominent Bank C.E.O. Exits Amid a Political Storm in Britain
▼ + stars: | 2023-07-26 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +1 min

The departure of Ms. Rose, the first woman to lead a major British bank, who had been charged with transforming an institution marred by scandal, has been swift. Less than a month ago, Mr. Farage, the former leader of the UK Independence Party, said that his account at Coutts, the private bank owned by NatWest, had been closed because of his political views. The apology and a promise to review the bank’s policies was not enough to ease the pressure on Ms. Rose. Reports late Tuesday night that the government, which has a 39 percent stake in the bank, was “significantly concerned” about Ms. Rose’s leadership seemed to seal her fate. Before dawn, the bank announced her immediate departure.

Persons: Alison Rose, Nigel Farage, Ms, Rose, Farage, Coutts, Rose’s Organizations: NatWest, European Union, UK Independence Party, BBC Locations: British

Fed officials will release their July interest rate decision on Wednesday, followed by a news conference with Jerome H. Powell, the Fed chair. Policymakers had previously forecast that they might raise rates one more time in 2023 beyond the expected move this week. It expects consumption, which has remained strong, to begin to wane in the coming months as Americans draw down their savings and interest rates increase further. On Thursday, the European Central Bank is expected to raise interest rates for the 20 countries that use the euro currency to the highest level since 2000. But the economic outlook is still relatively weak, and some analysts expect that the European Central Bank is close to halting interest rate increases amid signs that its restrictive policy stance is weighing on economic growth.

Persons: Jerome H, Powell Organizations: European Central Bank Locations: United States, Germany

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