If credit-card rates are at a 12-year peak but card usage is at record levels, why do we think interest rates are a tool for controlling the economy and inflation? Consumers appear insensitive to rates.
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When will UK interest rates rise? Not before the general election but they could well be increased before the end of the year. And if there is a run on the pound, the pressure will be for higher rates sooner rather than later.
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The government’s losses from Black Wednesday are legion, but already quantitative easing has cost us more than that doomed attempt to save sterling in 1992. The QE losses have reached £8bn and the Bank of England hasn’t yet started to unwind the programme.
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Nevermind that the Bank of England kept secret for a year its massive loan to HBoS and RBS (LON:RBS), why on earth did it choose to break its silence on the day Lloyds Banking Group (LON:LLOY) announces its record rights issue?
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The period of falling prices and low inflation was novel but all good things come to an end: from now on it looks like business as normal as prices rise again. And why would any government or central bank want otherwise?
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The government’s promise of three new banks looks attractive for an industry that has retreated to a Big Four offering little competition. But one of the three newcomers isn’t new and the other two are tiddlers.
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If banks shouldn’t be “too big to fail” how small must they be before we allow them to collapse? It’s the question the Bank of England’s governor must answer.
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Getting your insurance company to give you the money to pay its premium is a clever wheeze, but that’s what Lloyds Banking Group is planning. If it finances its participation in the government’s bad-debt insurance scheme with a rights issue, the state, as largest shareholder, will have to stump up the biggest part of the £16bn cost.
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Does the bank of England have a secret policy to devalue the pound? It’s being highly successful if it has.
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Dare one ask, amid all the comment to mark the year since the collapse of Lehman Brothers, were the financial regulators wrong in refusing to rescue the bank?
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