{"id":5859,"date":"2022-05-11T11:08:58","date_gmt":"2022-05-11T10:08:58","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/05\/11\/news-in-review-55\/"},"modified":"2022-07-05T14:09:48","modified_gmt":"2022-07-05T13:09:48","slug":"news-in-review-55","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/05\/11\/news-in-review-55\/","title":{"rendered":"News in Review"},"content":{"rendered":"
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\u201cMonetary\npolicy must\u2026 navigate a narrow path\u201d<\/em><\/strong><\/em><\/strong><\/p>\n<\/div>\n\n

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Interest rate rises were big news last week on home shores,\nacross the pond and in Australia, as central banks acted in an effort to curb\ninflation. The Monetary Policy Committee voted by a 6-3 majority to\nincrease Bank Rate by 0.25 percentage points to 1%, with further tightening\nexpected in the coming months. Interestingly, the three members in the minority\nfavoured increasing Bank Rate by 0.5 percentage points to 1.25%. This is\nthe fourth consecutive increase since December last year; at 1%, the rate has\nreached its highest level in 13 years. <\/strong><\/p>\n<\/div>\n\n

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Bank of England (BoE) Governor Andrew Bailey defended the rate rise\nat a time when the cost of living is increasing, saying that the risk of\nletting inflation get out of control was higher. The BoE are expecting the UK\neconomy to contract by nearly 1% in Q4 2022 and stay\nflat next year.<\/p>\n<\/div>\n\n

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Mr Bailey spoke about the impact of\nintensifying global inflationary pressures amid rising supply chain disruption\nconcerns due to the Ukraine invasion and COVID developments in China, \u201cThese\ndevelopments have exacerbated greatly the challenges already facing the UK, and\nmany other economies… monetary policy must, therefore, navigate a narrow path\nbetween the increased risks from elevated inflation and a tight labour market\non one hand, and the further hit to activity from the reduction in real incomes\non the other.\u201d <\/em><\/p>\n<\/div>\n\n

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The MPC\u2019s central projection for\nCPI inflation is a rise over the remainder of the year. The rate is expected to\nreach 9% in the coming months, before reaching 10.25% by the end of Q4. The next MPC meeting is\nscheduled for 16 June.<\/p>\n<\/div>\n\n

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On\nTuesday, Prince Charles delivered the Queen\u2019s Speech in Parliament, setting out\nthe government\u2019s agenda for the coming year. He said the government\u2019s priority\n\u201cis to grow and strengthen the economy and help ease the cost of living for\nfamilies.\u201d<\/em><\/p>\n<\/div>\n\n

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Largest US interest rate rise since 2000 \u2013 but labour\nstats hold steady<\/strong><\/p>\n<\/div>\n\n

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Last Wednesday, the Federal\nReserve moved to raise interest rates by 50 basis points \u2013 the largest rate\nrise in 22 years, with similar moves likely for June and July. US central bank chair Jerome Powell appealed to Americans to be\npatient while officials take measures to control inflation. During a post-meeting\npress conference in Washington, Mr Powell justified the move, \u201cInflation is\nmuch too high and we understand the hardship it is causing, and we\u2019re moving\nexpeditiously to bring it back down.\u201d<\/em><\/em><\/p>\n<\/div>\n\n

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Despite concerns over price rises, employers added 428,000 jobs in April, marking the\n16th month of expansion. After wiping out 22\nmillion jobs in the early months of the pandemic, the US economy has recovered\nmore quickly than expected.<\/p>\n<\/div>\n\n

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Also last week, Australia’s\ncentral bank, the Reserve Bank of Australia, raised the nation’s interest rates\nfor the first time in over a decade.<\/p>\n<\/div>\n\n

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Travel recovery prompted by pent-up\ndemand<\/strong><\/p>\n<\/div>\n\n

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People appear keen to get travelling again, recent\ninsight has indicated. Pent-up demand and the easing of curbs have led to an\nupswing in both short and medium-haul trips, and hotel bookings. Chief\nExecutive of the Egan-Jones Ratings Company, Sean Egan commented, \u201cThe big\noverlay is that air travel demand is back, and it is back in a massive way.\u201d <\/em><\/p>\n<\/div>\n\n

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Even with rising costs and staff shortages, airlines\nexpect a return to profitability this year. IAG, the owner of British Airways, expects\nto be profitable from Q2 onwards and for the whole year, despite having to cut\ncapacity in Q1. Luis Gallego, IAG Chief Executive commented, \u201cPremium\nleisure continues to be the strongest performing segment and business travel is\nat its highest level since the <\/em>start of the pandemic.\u201d<\/em><\/p>\n<\/div>\n\n

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IAG, which also owns Iberia, Vueling and Aer Lingus,\nforecasts passenger capacity to be around 80% of 2019 levels in Q2, rising to\n90% by Q4. Lufthansa said they expect to return to an operating profit in\nQ2, while Air France-KLM has seen a recovery in ticket sales and strong\nsummer bookings.<\/p>\n<\/div>\n\n

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Positive\nnews for household finances \u2013 average cost of car insurance falls 5%<\/strong><\/p>\n<\/div>\n\n

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With household finances feeling the squeeze, some good\nfinancial news at last! After the Financial Conduct Authority ended loyalty\npremiums for existing customers at the start of January, according to the\nABI\u2019s latest Motor Insurance Premium Tracker, the average price paid by motorists for their motor insurance\nin Q1 reduced by 5% to its lowest level in almost seven years (since Q3 2015).<\/p>\n<\/div>\n\n

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

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Financial advice is key, so please do not hesitate\nto get in contact with any questions or concerns you may have.<\/p>\n<\/div>\n\n

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

\u201cMonetary policy must\u2026 navigate a narrow path\u201d Interest rate rises were big news last week on home shores, across the pond and in Australia, as central banks acted in an effort to curb inflation. The Monetary Policy Committee voted by a 6-3 majority to increase Bank Rate by 0.25 percentage points to 1%, with further […]<\/p>\n","protected":false},"author":12,"featured_media":6377,"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\/5859"}],"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=5859"}],"version-history":[{"count":1,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/5859\/revisions"}],"predecessor-version":[{"id":6376,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/5859\/revisions\/6376"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/6377"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=5859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=5859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=5859"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=5859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}