Government Policy

  • 2018-10-10 10:19

    --Treasury Minutes: Has Been "Deep Dialogue" With EU Over Derivatives Risk

    LONDON (MNI) - There has been extensive work and "deep dialogue" between European and UK officials to find a way around the risk of Brexit invalidating tens of trillions of pounds of derivative contracts, a senior UK official said on Wednesday.

    The Bank of England Financial Policy Committee on Tuesday cited the risk from GBP40 trillion of derivative contracts due to mature after Brexit (March 2019) with no agreed regulatory and legal framework to ensure contract continuity.

    John Glen, the Economic Secretary to the Treasury was guardedly optimistic a solution would be found, in evidence to a House of Lords EU Financial Affairs committee.

    Here are key points from his remarks:

  • 2018-10-09 12:27

    -Broadbent Sees Demand For CPI-Linked Gilts; RPI Switch Is A Political Challenge

    LONDON (MNI) - Bank of England Deputy Governor Ben Broadbent said it would make sense for the UK Treasury to issue new inflation-linked bonds using the same price index as the one used for the central bank's target.

    Broadbent spoke before the House of Lords Economic Affairs Committee, which is considering whether the retail price index, used by the government for inflation-linked gilts and for adjusting some public sector prices, is an appropriate measure.

    Here are main points from his appearance:

    --He stressed that RPI was a flawed inflation measure compared to the bank's preferred consumer price index, and also to the CPIH gauge which factors in housing costs, but s

  • 2018-09-12 01:05

    By David Robinson

    LONDON (MNI) - The UK Treasury wants to phase out usage of the retail prices index (RPI), the legacy inflation measure, but has not set a target date for ending linking any public sector business to it, Chancellor of the Exchequer Philip Hammond told legislators Tuesday.

    "The government's clear intention is to move away (from RPI) over time," Hammond told the Lords Economic Affairs Committee.

    RPI is the reference point for UK inflation-linked gilts, rail fare changes and student loan rates.

  • 2018-09-11 11:28

    By David Robinson

    LONDON (MNI) - UK Chancellor of the Exchequer Philip Hammond appeared before the House of Lords Economic Affairs Committee, telling them that the extension of Bank of England Governor Mark Carney's term was insurance against any failure to reach a Brexit deal.

    Here are key points from his comments:

    - Carney will stay until January 2020, rather than June 2019 as he previously said. You "could expect a period of some turbulence" if there was no deal by the time the UK leaves the EU in March 2019, and a governor who was leaving in June would have been poorly placed to deal with this, Hammond said.

    - The Brexit process is playing havoc with the normal functioning of the Treasury.

  • 2018-09-11 06:52

    By David Robinson

    LONDON (MNI) - Bank of England Governor Mark Carney will continue in his post until the end of January 2020 and Deputy Governor Jon Cunliffe has been given a new term lasting through to October 2023, Chancellor of the Exchequer Philip Hammond revealed Tuesday.

    Hammond told Parliament that the UK was facing testing times as a result of the Brexit process, and the re-appointments ensure continuity at the top of the central bank.

    Carney had previously told the Treasury Select Committee that he was willing to stay on at the Bank to help with consequences of Brexit, and Hammond on Tuesday fleshed out the details.

    Carney has agreed to extend his stay by seven months, having previously said that he would leave in June next year.

    "I recognise that d

  • 2018-08-22 06:26

    By Luke Heighton

    LONDON (MNI) - Harald Mahrer, former Austrian finance minister and current president of the economic council has been named as President of the National Bank of Austria's (OeNB) General Council.

    Mahrer, a member of chancellor Sebastian Kurz's conservative Austrian People's Party (OVP), will take up the role on Sep 1, alongside his newly-appointed deputy, Barbara Kolm, an economic advisor to the right-wing populist Freedom Party of Austria (FPO).

    They replace current president and People's Party pick Claus Raidl, along with Social Democratic Party (SPO) nominee Max Kothbauer, whose 10-year terms of office both expire at the end of August.

    The General Council supervises operations lying outside the remit of the European System of Central Banks (ESCB)

  • 2018-07-10 11:08

    -UK DMO Head Stheeman, Treasury Minister Truss Wary Of Costs Of Move From RPI To CPI

    LONDON (MNI) - On Tuesday Liz Truss, Chief Secretary to the Treasury, and Robert Stheeman, chief executive of the Debt Management Office, gave evidence to the Lords Economic Affairs Committee on the way forward for shifting away from the retail prices index (RPI).

    A hot problem for UK policymakers is that RPI is known to be intrinsically flawed and is no longer an accredited official statistic.

  • 2018-07-06 04:26

    BEIJING (MNI) - Following the imposition of US tariffs on $34 billion worth of Chinese imports on Friday morning, China immediately responded with levies on an equivalent value of US goods, China's Ministry of Foreign Affairs (MFA) confirmed Friday.

    "When our legitimate interests are unfairly treated, without question we will fight back," Lu Kang, MFA spokesman, said at a press briefing in Beijing.

    China hoped that trade conflicts with the U.S. would not escalate into an all-out trade war -- which would benefit no one -- Lu stressed. Bullying and threatening will lead nowhere, he added.

    While criticising the U.S. action for being "unilateral" and "unfair," Lu said that the two countries have been in communication regarding various issues of mutual interest.

  • 2018-07-02 04:04

    --BOE Call Seen As Attempt To Detach Transition Deal From Withdrawal Agreement

    LONDON (MNI) - There is a commonplace view among European Union officials that the Bank of England's exhortations urging EU authorities to back temporary arrangements to help financial sector firms in the event of a hard Brexit are a blatant attempt to uncouple a transition deal for financial services from the Brexit negotiation process, MNI understands

    From the EU's perspective, the UK government's desire for a transition period after Brexit that comes into force in March 2019 gives the union a lot of leverage in Brexit negotiations.

  • 2018-05-30 02:30

    --Lega, 5 Star Coalition Push To Reconsider Their Alliance

    ROME (MNI) - There are high chances Italy may be holding a second vote as early as July following calls from political parties though much will depend on the decision of the head of state Sergio Mattarella, MNI understands.

    Sources close to both Lega and the Democrat party told MNI that at this stage, and election was a better option. "The earlier we vote again, the better it is. There is no sense having a cabinet running for just a few months anyway," said one source close to the League.

    Mattarella is meeting with prime minister designate Carlo Cottarelli, a former IMF official, who is expected to present his list of ministers later Wednesday for approval.