Monday 16th September 2019
Not the sports results – but not so very different….
The pound is bouncing around day-to-day – reacting to each new twist and turn in every developing news story….
Brexit (or lack of it); Donald Trump’s on-off trade war with China; renewed tensions in the Middle East – all these issues and many more have an effect on the present value and future outlook of pound sterling….
Every official pronouncement, every fresh unfounded rumor and every new element of media speculation adds yet another variable to the simmering pot – leading to another revised market calculation of what the pound is worth against other currencies….
Who knows what the pound might be worth tomorrow morning?
All I can tell you is that this morning the pound was down 15% against the dollar, 13.7% against the euro and 12% against the Japanese yen since the eve of the European Union membership referendum in June 2016….
To put at least one of those figures into its proper context – the pound recently hit a 34-year low against the dollar….
- A writing down of values….
Back in the day when I was a young fool (as opposed to an older one) they had a short segment towards the end of News at Ten when Sandy Gall or Alastair Burnett would report what the pound was worth against the dollar….… Click here to read more
Wednesday, 15th August 2018
It’s all over! Or is it?
The Daily Mail’s Alex Brummer was in no doubt. He said this:
‘The Bank of England has signaled the financial crisis is finally over with the decision to lift interest rates to the highest level in a decade….’
You can imagine the sheer relief that swept through the Gibson household once Brummer had issued his resounding all-clear….
At last! Thank goodness! The ‘emergency’ that began a decade ago and took interest rates to the lowest level in the Bank of England’s 300+ year history is finally over….
The Bank has raised the base rate of interest all the way from 0.5% to the dizzying heights of 0.75%….
Things can finally get back to ‘normal’….
Or can they?
What about the financial crisis that lies just around the next corner?
It was last September when the Bank of England’s Financial Policy Committee (FPC) described the burgeoning consumer credit market as a ‘pocket of risk’….
The consumer debt pile in Britain at that time amounted to £200 billion….
The FPC issued some stark warnings that, if the economy took a turn for the worse, rising defaults on that consumer borrowing could result in High Street banks losing up to £30 billion….… Click here to read more
Wednesday, 16th May 2018
No closer to normality….
Cast your mind back to this day in 2007….
Can you remember what you were doing? Probably not….
Can you remember what interest rates looked like back then?
Allow me to refresh your memory….
Back in May 2007, the interest rate set by the Bank of England’s (BoE) Monetary Policy Committee (MPC) had just hit 5.5%….
Don’t worry, that’s not a typo….
I know it sounds fanciful, but I really do mean 5.5%….
- A 6-year high and more to follow….
That figure represented a 6-year high….
It was the result of the BoE increasing the rate for the fourth time in just 9-months….
The rate is the baseline figure that (to some extent) informs borrowers what they can expect to pay for credit and tells savers what they can expect to be paid on deposits….
The bank had been increasing the rate in a bid to curb an inflation figure that in March 2007 had been running at 3.1%….
The hope was that a rising interest rate would encourage consumers to stop spending money and start saving it instead – taking heat out of rising prices….
I don’t tell you these things because I think you’ll enjoy a trip down Memory Lane.… Click here to read more