{"id":5085,"date":"2022-03-23T14:10:11","date_gmt":"2022-03-23T14:10:11","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/03\/23\/news-in-review-48\/"},"modified":"2022-07-05T14:35:00","modified_gmt":"2022-07-05T13:35:00","slug":"news-in-review-48","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/03\/23\/news-in-review-48\/","title":{"rendered":"News in Review"},"content":{"rendered":"
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‘<\/strong>The economy has recently been subject to a succession of very large shocks\u2019<\/em><\/p>\n<\/div>\n\n

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Last Thursday, as highly anticipated, the Bank of\nEngland (BoE) announced the third increase in Bank Rate in four months, placing\nmore pressure on household finances. The Monetary Policy Committee (MPC)\nmembers voted by an eight to one majority in favour of the 0.25 percentage\npoint rise<\/strong> from 0.5% to 0.75%, in a bid to dampen\nsoaring inflation. <\/strong><\/strong><\/p>\n<\/div>\n\n

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Bank Rate is now at its highest level since March\n2020, at the start of the pandemic. The\npolicymakers felt that the rate rise was justified \u2018given the current\ntightness of the labour market, continuing signs of robust domestic cost and\nprice pressures, and the risk that those pressures will persist.\u2019<\/em><\/p>\n<\/div>\n\n

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The Committee\nsaid that depending on how medium-term prospects evolve, including the economic\nimplications of geopolitical events, \u2018<\/em>some further modest tightening in monetary policy may be\nappropriate in the coming months.\u2019<\/em>\nThe next MPC meeting will take place in early May. <\/p>\n<\/div>\n\n

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The Bank cautioned that the annual inflation rate\nmay rise to around 8% in Q2 and potentially even higher later in the year,\npossibly reaching double digits if energy prices push up the energy price cap\nwhen it\u2019s reset in October. Prices have already increased\nby 6.2% in the year to February, a new 30- year high and well above the BoE\u2019s\n2% inflation target. The Bank outlined that the Ukraine invasion has\nexacerbated supply chain disruption, placed upward pressure on energy,\ncommodity and food prices, and has significantly increased uncertainty around\nthe economic outlook, commenting, \u2018The economy has\nrecently been subject to a succession of very large shocks. Russia\u2019s invasion\nof Ukraine is another such shock\u2026 should recent movements prove persistent, the\nvery elevated levels of global energy and tradable goods prices, of which the\nUnited Kingdom is a net importer, will necessarily weigh further on UK real\naggregate income and spending. This is something monetary policy is unable to\nprevent.\u2019<\/em><\/p>\n<\/div>\n\n

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The cost of\ndoing business<\/strong><\/p>\n<\/div>\n\n

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Set against a\nbackdrop of growing domestic and global headwinds, Head of Economics at the\nBritish Chambers of Commerce (BCC) Suren Thiru, said that although\nexpected, the decision to raise interest rates was mistimed, arguing that higher rates will do little to curb some of the\nglobal causes behind the surge in prices and risk intensifying the financial\nsqueeze on consumers and businesses, \u201cWhile\ninterest rates remain low by historic standards, the latest rise will be viewed\nby many as a further step in a prolonged period of aggressive monetary\ntightening at a time when consumers and businesses are struggling under a\nmyriad of rising cost pressures\u2026 intensifying the headwinds facing the UK\neconomy by damaging confidence and deepening the financial squeeze on consumers\nand businesses.\u201d<\/em> He urged the Chancellor to take the opportunity to use the\nSpring Forecast Statement on 23 March to address the \u201cescalating cost of\ndoing business crisis\u201d<\/em> and suggested that a delay in the National Insurance\nrise and introducing a temporary energy price cap for small businesses, would\nbe enough to provide firms with the \u201cheadroom to keep a lid on prices,\nprotect jobs and make investment that is so vital to sustaining our economic\nprospects.\u201d<\/em><\/p>\n<\/div>\n\n

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The Chancellor has pledged to help \u201cwhere\nwe can make a difference<\/em>\u201d as he faces pressure to assist struggling\nhouseholds. There have been reports that this could include a temporary cut in\nfuel duty.<\/p>\n<\/div>\n\n

\n

Markets<\/strong><\/strong><\/p>\n<\/div>\n\n

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Toward the end of last week, both US and European markets\ncontinued their recovery, delivering solid weekly advances, as investors\npositively regarded the certainty of the Federal Reserve\u2019s monetary policy\nannouncement on Wednesday. The Fed adopted a measured approach, raising\ninterest rates 25 basis points and plotted out a route toward six additional\nrate hikes during 2022. This is the first time the US central bank has raised the interest rates since\n2018.<\/p>\n<\/div>\n\n

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On Tuesday, the price of Brent Crude reached over $118 a\nbarrel as concerns persist over potential shortfalls in supplies. London stocks\nfinished in positive territory following news from the Office for National\nStatistics (ONS) that government borrowing in February was \u00a313.1bn, a drop of\n\u00a32.4bn from February 2021. <\/p>\n<\/div>\n\n

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Here to help<\/strong><\/p>\n<\/div>\n\n

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It is essential\nthat investors focus on longer-term timescales instead of focusing too intently\non short-term volatility. Rest assured we will continue to monitor events\nclosely. Financial\nadvice is key, so please do not hesitate to get in contact with any questions\nor concerns you may have.<\/p>\n<\/div>\n\n

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The value of investments can go down as well\nas up and you may not get back the full amount you invested. The past is not a\nguide to future performance and past performance may not necessarily be\nrepeated.<\/strong><\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

‘The economy has recently been subject to a succession of very large shocks\u2019 Last Thursday, as highly anticipated, the Bank of England (BoE) announced the third increase in Bank Rate in four months, placing more pressure on household finances. The Monetary Policy Committee (MPC) members voted by an eight to one majority in favour of […]<\/p>\n","protected":false},"author":12,"featured_media":6759,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,112],"tags":[],"hd_content_source":[116],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/5085"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=5085"}],"version-history":[{"count":3,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/5085\/revisions"}],"predecessor-version":[{"id":6697,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/5085\/revisions\/6697"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/6759"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=5085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=5085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=5085"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=5085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}