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☆ Explainer: Why is UK food inflation so stubbornly high?
▼ + stars: | 2023-06-16 | by ( James Davey | ) www.reuters.com time to read: +4 min

While market leader Tesco (TSCO.L) said on Friday there were "encouraging early signs" that food inflation was starting to ease across the market, it remains stubbornly high, running at over 19% in April, according to the most recent official data. Below are possible reasons why:NOT ALL COMMODITY PRICES ARE FALLINGSome global commodity prices have fallen enabling supermarkets to pass on reductions in areas such as milk, bread, butter, pasta and oils. Generally speaking, food retailers and their suppliers operate with long-term contracts. Having eventually secured better prices, suppliers are reluctant to give up those hard won gains. Some politicians and trade unions have raised concerns about profiteering by food retailers, saying they have kept prices high despite falls in commodity, energy and shipping costs.

Persons: Andrew Bailey, reassurances, Ken Murphy, Andrew Opie, Tesco's Murphy, James Davey, David Evans Organizations: Bank of England, Tesco, Food and Agriculture Organization, United Nations, British Retail Consortium, THE, Reuters, Brexit, London School of Economics, Supermarkets, Markets Authority, Thomson Locations: Britain, China, Japan, BREXIT, London, Brussels

☆ Who is Hafize Gaye Erkan, Turkey's first female central bank chief?
▼ + stars: | 2023-06-09 | by ( Karin Strohecker | ) www.reuters.com time to read: +2 min

LONDON, June 9 (Reuters) - Turkey's new central bank governor Hafize Gaye Erkan faces the tough task of alleviating a bruising cost-of-living crisis while hoping to restore investor confidence at home and abroad after years of unorthodox policymaking. Appointed on Friday, the 43-year old is the first woman at the helm of the country's central bank, taking over from Sahap Kavcioglu, who spearheaded President Tayyip Erdogan's rate-cutting drive against a backdrop of soaring inflation. Her new role makes her one of only around a dozen women currently serving as central bank governors around the world, including the likes of ECB President Christine Lagarde, Russian Central Bank Governor Elvira Nabiullina and Serbia's Jorgovanka Tabakovic. Having spent all of her professional life outside Turkey, Erkan has no formal central banking experience, making her leanings for monetary policy unclear. Kathryn Wylde, president and CEO of Partnership for New York City, a nonprofit organization where Erkan once served as a board director, says Erkan was seen as "tough, smart, and effective."

Persons: Hafize Gaye Erkan, Sahap Kavcioglu, Tayyip Erdogan's, Christine Lagarde, Russian Central Bank Governor Elvira Nabiullina, Erkan, Goldman Sachs, Mark Carney, Mario Draghi, William Dudley, Goldman, Marsh McLennan, Kathryn Wylde, Wylde, Karin Strohecker, Jonathan Spicer, Hugh Lawson Organizations: Russian Central Bank Governor, Bogazici University, Harvard Business School's, Management, Research, Financial Engineering, Princeton University, Bank of Canada, Bank of England, New York Fed, First Republic Bank, Banking, Finance, New, Thomson Locations: Sahap, Istanbul, Turkey, New York City

☆ Britain is getting so desperate to tame inflation it’s talking about food price caps
▼ + stars: | 2023-05-30 | by ( Hanna Ziady | ) edition.cnn.com time to read: +6 min

Food inflation dipped slightly to 15.4% in May, but that’s still the second-highest rate on record. But chocolate and coffee prices are rising as global commodity prices soar, British Retail Consortium CEO Helen Dickinson said. Price controls anyone? “The current food price shock does not warrant such an intervention,” he added. Brexit is responsible for about a third of UK food price inflation since 2019, according to researchers at the London School of Economics.

But as some argue, in its quest to avoid another taper tantrum, the Fed delayed that two-pronged tightening too long, which has partly contributed to the stickiness of inflation today. This lengthy buildup may have averted another taper tantrum, but tied the Fed's hands on raising rates even as inflation was roaring back. Markets thought this not only meant the Fed would soon "taper" its bond purchases, but also raise interest rates. The Fed and markets have learned their lessons from the taper tantrum. Maybe the taper tantrum illustrates that it wasn't as planned and consistent as it should have been," he said.

☆ Bank of England governor says the UK is facing a wage-price spiral
▼ + stars: | 2023-05-18 | by ( Jenni Reid | ) www.cnbc.com time to read: +2 min

Susannah Ireland | Afp | Getty ImagesLONDON — After more than a year of warnings, Bank of England Governor Andrew Bailey says the U.K. is now experiencing a wage-price spiral despite 12 consecutive central bank interest rate hikes. "But it also reflects second-round effects as the external shocks we have seen interact with the state of the domestic economy." These areas of persistence, he continued, include domestic wage growth and price setting. The U.K. inflation rate surprised economists by holding above 10% in March. The Bank of England sees signs of a slowdown in wage growth, but observes that services inflation remains elevated, Bailey added.

☆ Stock Market Today: Dow Futures Inch Higher
▼ + stars: | 2023-05-17 | by ( ) www.wsj.com time to read: +1 min

Stock futures are ticking higher, suggesting major indexes could recover slightly after falling Tuesday on worries about a potential debt-ceiling default . Meanwhile, regional bank shares are jumping, on track to extend a recent stretch of high volatility. The 10-year U.S. Treasury yield fell to 3.536%, from 3.548% Tuesday. The two-year Treasury yield bucked the trend, rising to 4.099%, from 4.072%. The WSJ Dollar Index gained 0.3%, on pace to finish higher for the sixth session in the last eight trading days.

☆ Bank of England chief Bailey defends record growth upgrade, admits communication error
▼ + stars: | 2023-05-11 | by ( Karen Gilchrist | ) www.cnbc.com time to read: +1 min

LONDON — Bank of England Governor Andrew Bailey on Thursday defended an about-turn in the bank's U.K. growth forecast, saying its "biggest upgrade" ever reflected the rapidly shifting economic landscape. At its policy meeting earlier Thursday, the central bank said it no longer expects the U.K. to enter into recession this year. "They are conditional on financial market prices, they're conditional on commodity prices, they're conditional on government policies. So, as those conditions change, we change our forecasts," he said. "We have deal with all these things, which is why our forecasts do change and do evolve," he said.

☆ The insurance limit on your savings has become a hot global debate
▼ + stars: | 2023-04-28 | by ( Julia Horowitz | ) edition.cnn.com time to read: +8 min

The US Federal Deposit Insurance Corporation insures deposits up to $250,000 per person, per account, using a fund that banks pay into. “I don’t think that’s served us well.”Some argue the US deposit insurance limit should be 100 times higher. What is deposit insurance? Deposit insurance is aimed at calming fears, giving customers less reason to pull their cash out in a hurry. The debate over deposit insurance taps into bigger questions about the state’s role in private enterprise.

☆ VC firms create $60 billion-plus climate tech alliance with backing from the UN
▼ + stars: | 2023-04-25 | by ( Ryan Browne | ) www.cnbc.com time to read: +3 min

A group of venture capital firms including Tiger Global and Union Square Ventures on Tuesday set up an alliance aimed at making private tech investing more climate-friendly. Called the Venture Climate Alliance (VCA), the coalition of more than 20 climate tech and generalist funds seeks to get the VC industry to increase its commitments to climate tech, a branch of technology devoted to finding solutions to the climate crisis. Generalist VC firms will need to make routine assessments of their carbon footprint, align their early-stage startup bets with net-zero goals. It is not the first initiative to bring climate's role in startup investing to the forefront. The alliance will fall under the Glasgow Financial Alliance for Net Zero (GFANZ), a group formed during the COP26 climate conference.

☆ Economists and policymakers were fretting about a wage-price spiral. Not any more
▼ + stars: | 2023-04-21 | by ( Jenni Reid | ) www.cnbc.com time to read: +8 min

The experts were worried about a so-called wage-price spiral. Businesses' revenues "have risen faster than costs, and so margins have room to absorb rising labor costs." "It's not that a wage-price spiral couldn't happen, but it's low on the list of concerns versus the factors we know are problematic," she said. A key mechanism that would fuel a wage-price spiral, workers' bargaining power, has been weakened because unions have less power than in the 1970s, Makszin added. "But if you let interest rates go down against inflation and in effect weaken, you have an inflation spiral.

☆ Morning Bid: Stocks defy negativity in CPI vigil
▼ + stars: | 2023-04-12 | by ( ) www.reuters.com time to read: +5 min

The Federal Reserve's interest rate stance hinges on incoming data such as Wednesday's consumer price report, but fears of recession remain just that. And so investors return to scrutinising the Fed to see if the central bank forces the recession by tightening ever further. With Fed policy meeting minutes due later in the day, the runes of what must have been a tense gathering of officials in the middle of the regional banking shock will be eyed closely. Minneapolis Fed President Neel Kashkari reckoned recession was still a risk but inflation wouldn't get back close to the 2% target until next year. Hong Kong stocks (.HSI) underperformed overnight - with geopolitical tensions high surrounding Taiwan and Chinese military operations around the island.

☆ BoE's Bailey says bank reforms worked but questions about liquidity buffers
▼ + stars: | 2023-04-12 | by ( Huw Jones | ) www.reuters.com time to read: +4 min

"Today I do not believe we face a systemic banking crisis. Bailey, however, echoed calls from his predecessor Mark Carney by saying there might be questions over the size of liquidity buffers required of banks in order to tide them over short-term shocks. This must beg the question of what are appropriate and desired liquidity buffers that create the time needed to take action to solve the problem." Data from the European Central Bank on Wednesday showed a slight weakening in liquidity buffers at banks it regulates, though they are still well above minimum requirements. Banks' holdings of liquidity have more than doubled since the global financial crisis, helping to contain fallout from the recent banking turmoil, de Cos said.

The blue-chip FTSE 100 (.FTSE) rose 0.5%, while the mid-cap FTSE 250 (.FTMC) lost 0.1% as of 0807 GMT. Oil and gas (.FTNMX601010) added 0.8% as crude prices gained against the dollar, lifting oil giants BP Plc (BP.L) and Shell Plc (SHEL.L) 0.6% and 1.0%, respectively. "The FTSE 100 is falling in line with the positive sentiment we saw at the start of the week, overlooking the China-Taiwan tensions," said Giles Coghlan, chief market analyst at HYCM. While concerns over a potential recession in the U.S. amid persistent inflation have weighed on sentiment recently, the FTSE 100 has been on a positive streak, helped by commodity stocks and defensives including pharmaceuticals. Shares of West Africa-focused oil producer Tullow Oil (TLW.L) slid 2.9% on Jefferies' downgrade to "underperform" from "hold."

☆ A top tip for central banks: talk less, smile more
▼ + stars: | 2023-04-11 | by ( Ben Winck | ) www.reuters.com time to read: +8 min

WASHINGTON, April 11 (Reuters Breakingviews) - Investors hang on central bankers’ every word, hoping to gain an edge for their next trade. But with consumer prices rising at the fastest pace in decades, central bankers can’t easily cut borrowing costs, either. Chatty central banks are a relatively new phenomenon. Investors are also more sensitive to central banks today than in years past. Still, being more careful about what’s said, and how it’s said, could help central banks better balance their priorities.

☆ Bank bail-ins, and how to prevent climate bailouts: podcast
▼ + stars: | 2023-04-04 | by ( George Hay | ) www.reuters.com time to read: 1 min

LONDON, April 4 (Reuters Breakingviews) - Mark Carney helped design the post-2008 system for resolving bust lenders. In this episode of the Exchange, the ex-Bank of England governor tells George Hay what he makes of last month’s rescue of Credit Suisse, and how to limit future financial sector hits from climate change. Listen to the podcastFollow @gfhay on TwitterSubscribe to Breakingviews’ podcasts, Viewsroom and The Exchange. Editing by Thomas ShumOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Liquidity rules need rethink after Silicon Valley Bank crash, says Carney
▼ + stars: | 2023-04-04 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

The collapse of Silicon Valley Bank in the United States last month highlighted the "greater flightiness" of desposits, particularly those of small business clients, Carney told a Reuters Breakingviews podcast. Over $40 billion left Silicon Valley Bank in 24 hours, leaving authorities confronting a new risk: the social media bank run as depositors can withdraw cash with just a few taps on their phone. These buffers should also count a bank's access to central bank liquidity as part of their calculations, he added. The United States has generally applied Basel standards only to its biggest banks, which did not include Silicon Valley Bank. Bank of England Deputy Governor Sam Woods told lawmakers last week that bank liquidity rules might now be an open question for international policymakers.

LONDON, March 31 (Reuters) - A member of a United Nations-backed coalition of insurance firms and pension funds seeking to tackle climate change told Reuters it was considering quitting after disagreements about curbing investment in the oil and gas sector split the group. The row is the latest in a string of policy splits among major climate coalitions of financial firms. AkademikerPension wanted the position paper to state that NZAOA members should only invest in public equities or corporate bonds when the companies involved are no longer investing in exploration for new oil and gas. German insurer Munich Re (MUVGn.DE) said earlier on Friday it was withdrawing from another alliance of insurers focused on reducing carbon emissions to avoid antitrust risks. "I think it's going to be extremely difficult for a plaintiff, even a government enforcer, to prevail on an antitrust theory of harm," said Mitnick.

☆ Morning Bid: Swinging between bank fears and rate risks
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +5 min

A look at the day ahead in U.S. and global markets from Mike DolanMarkets seem caught between the devil and the deep blue sea. Easing concerns about bank stability this week have merely re-introduced interest rate risk, reining in any suggestion of a runaway relief rally as the first quarter closes on Friday. While nerves persist over March bank failures and contagion fears, central banks are still faced with punchy growth and inflation and will likely switch attention back to cooling that down once they're assured banks can take the strain. But interest rate markets are already correcting as signs of stability in the banking arena emerge. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Lenders, energy stocks help London stocks extend gains
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +1 min

SummarySummary Companies FTSE 100 up 0.6%, FTSE 250 adds 0.2%March 28 (Reuters) - UK shares extended gains on Tuesday, supported by an upbeat performance in energy heavyweight BP, while lenders gained following reassuring comments by Bank of England Governor Andrew Bailey on the stability of the banking sector. The pound strengthened 0.3% as traders weighed the prospects of higher interest rates. The blue-chip FTSE 100 (.FTSE) rose 0.6%, while FTSE 250 (.FTMC) climbed 0.2% by 0718 GMT. Energy stocks (.FTNMX601010) rose 1.6%. Reporting by Johann M Cherian in Bengaluru; Editing by Sherry Jacob-PhillipsOur Standards: The Thomson Reuters Trust Principles.

☆ 'Be very vigilant': Bank of England chief says the market is testing banks to identify weakness
▼ + stars: | 2023-03-28 | by ( Elliot Smith | ) www.cnbc.com time to read: +1 min

Andrew Bailey, Governor of the Bank of England, attends the Bank of England Monetary Policy Report Press Conference, at the Bank of England, London, Britain, February 2, 2023. LONDON — Bank of England Governor Andrew Bailey on Tuesday vowed to be "very vigilant" amid ongoing volatility and suggested that the market is "testing out" banks to find weaknesses. Global banking stocks have taken a beating in March, as contagion fears spread following the collapse of U.S.-based Silicon Valley Bank — the largest bank failure since the financial crisis — and the emergency rescue of Credit Suisse by Swiss rival UBS . Deutsche recovered partially on Monday to lead gains as the market panic appeared to subside, after First Citizens agreed to buy a large chunk of failed Silicon Valley Bank's assets. "I also think what we saw at the tail end of last week, Friday in particular, when there were quite sharp market movements [were] moves in markets to, if you like, test out firms," Bailey told lawmakers.

March 28 (Reuters) - Immediate investor concerns over the banking sector eased on Tuesday, lifting stock prices, with the European Central Bank's supervisory chief saying recent sector volatility underscored the need to step up regulatory scrutiny. Credit Suisse (CSGN.S) shares rose 1.7%. Top U.S. banking regulators said on Monday they planned to tell Congress that the overall financial system remains on a solid footing after recent bank failures, but will comprehensively review their policies in a bid to prevent future collapses. Regional U.S. lender First Citizens BancShares on Monday scooped up the assets of SVB, in a vote of confidence for the battered banking sector that prompted a rally in bank shares. Bailey said the stresses which led to a crisis in confidence in Credit Suisse were down to specific issues in Switzerland's second-largest bank.

☆ Andrew Bailey says Bank of England on high alert as investors 'test' banks
▼ + stars: | 2023-03-28 | by ( Hanna Ziady | ) edition.cnn.com time to read: +3 min

On Monday, European bank shares rose, boosted by news that First Citizens Bank in the United States would buy most of the assets of Silicon Valley Bank, which collapsed earlier this month. “I think there are moves in markets to, if you like, test out firms,” Bailey told a UK parliamentary committee Tuesday. José Manuel Campa, the head of the European Banking Authority, told Germany’s Handelsblatt Monday that European lenders remained vulnerable. The Swiss heavyweight was rescued by UBS, while SVB UK was bought by HSBC (HBCYF) for £1 after its US parent was shut by regulators. Despite being well-capitalized, SVB UK would not have survived the demise of its US parent, according to Bailey.

☆ Morning Bid: Brittle banks find a berth
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +4 min

With few fresh weekend developments on the European bank stock rigor late last week, European bourses and bank stocks found a level too. Deutsche Bank, whose stock lurched lower on Friday amid fears about rising bank funding costs, regained about 3% on Monday. Deposits at small banks fell by $120 billion in the week to March 15, while borrowing jumped $253 billion. Economists polled by Reuters expect the headline year-on-year inflation rate to have cooled to 7.2% from 8.5% in February. * U.S. Treasury auctions 2-year notes* U.S. corporate earnings: CarnivalReuters GraphicsReuters Graphics Reuters GraphicsReuters GraphicsReuters GraphicsBy Mike Dolan, editing by Ed Osmond, <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

☆ BoE's Bailey says rate-setters can put inflation before bank worries
▼ + stars: | 2023-03-27 | by ( William Schomberg | ) www.reuters.com time to read: +2 min

LONDON, March 27 (Reuters) - Bank of England Governor Andrew Bailey signalled on Monday that interest rate-setters would focus on fighting inflation and would not be swayed unduly by worries about the health of the global banking system. Some investors have argued that central banks should take into account the banking turmoil when setting interest rates. "With the Financial Policy Committee on the case of securing financial stability, the Monetary Policy Committee can focus on its own important job of returning inflation to target," Bailey said. As well as the BoE, the European Central Bank, U.S. Federal Reserve and Swiss National Bank have all raised interest rates this month, despite the high-profile bank failures including Silicon Valley Bank and Credit Suisse. Bailey repeated the BoE's view that further monetary tightening would be required if signs of persistent inflationary pressure became evident.

☆ BoE's Bailey urges firms to assume lower inflation when setting prices
▼ + stars: | 2023-03-24 | by ( David Milliken | ) www.reuters.com time to read: +2 min

LONDON, March 24 (Reuters) - British businesses should consider official forecasts showing inflation will fall this year when setting their prices, Bank of England Governor Andrew Bailey said on Friday. "When companies set prices, I understand that they have to reflect the costs that they face," Bailey told the BBC. "But what I would say, please, is that when we are setting prices in the economy and people are looking forwards, we do expect inflation to come down sharply this year. "And I would say to people who are setting prices, please understand that if we get inflation embedded, interest rates will have to go up further." Financial markets on Friday priced in one more BoE interest rate rise this year, taking rates to a peak of 4.5%.

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