{"id":6586,"date":"2022-06-22T10:29:49","date_gmt":"2022-06-22T09:29:49","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/06\/22\/news-in-review-60\/"},"modified":"2022-07-05T14:18:32","modified_gmt":"2022-07-05T13:18:32","slug":"news-in-review-60","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/06\/22\/news-in-review-60\/","title":{"rendered":"News in Review"},"content":{"rendered":"
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\u2018We have the tools and\ndetermination we need to reduce inflation and I am confident the Bank will play\ntheir part in making that happen\u2019<\/em><\/strong><\/p>\n<\/div>\n\n

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The Monetary Policy\nCommittee (MPC) voted to raise Bank Rate last week, hiking the rate from 1% to\n1.25%, the fifth consecutive rate rise. The MPC voted six to three to raise the\nrate by 0.25 percentage points, with the members in the minority voting for a 0.5\npercentage point rise to 1.5%. Pushing the Bank of England\u2019s (BoE) benchmark rate\nabove 1% for the first time since 2009; the increase was w<\/strong>idely expected, with analysts believing\nanother hike was necessary to rein in inflation.<\/strong><\/strong><\/p>\n<\/div>\n\n

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The\nMPC revised its inflation forecast to \u2018slightly\u2019<\/em> above 11% in October,\nan increase on a previous estimate of 10% and the eighth time the Bank has had\nto alter its predictions. If this estimate of 11% plays out in the coming\nmonths, the 2% inflation target will be overshot almost six-fold. The anticipated increase in October reflects higher projected\nhousehold energy prices following an additional rise in the Ofgem price cap,\nplus rising food prices and a tight labour market.<\/p>\n<\/div>\n\n

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Responding to a\nletter from BoE Chairman Andrew Bailey, Chancellor Rishi Sunak said that he\nrecognised \u2018the impact that high inflation has on households and that it is\nchallenging for households up and down the country to meet their living costs,\nwhich is why it is imperative to bring inflation back down to target and to\nkeep it anchored there. I welcome that the Bank is prepared to take firm and\ndecisive action to achieve this.\u2019<\/em><\/p>\n<\/div>\n\n

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Referring to a trio\nof tools; independent monetary policy, fiscal responsibility and supply side\nreform, the Chancellor concluded, \u2018We have the tools and determination we\nneed to reduce inflation and I am confident the Bank will play their part in\nmaking that happen.\u2019<\/em><\/p>\n<\/div>\n\n

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Further rate increases are\nexpected this year, with commentary suggesting that investors are pricing in a\n3% base rate by year end. This would require three half-point rate increases\nand a quarter-point increase at the four remaining meetings of 2022. The next MPC meeting is scheduled for 4 August 2022.<\/p>\n<\/div>\n\n

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Fed approves largest interest rate rise\nsince 1994<\/strong><\/strong><\/p>\n<\/div>\n\n

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Central banks around the world are taking similar steps, including in\nthe US. Across the pond, Federal Reserve officials agreed a 0.75 percentage\npoint rate rise last Wednesday, increasing the Fed\u2019s benchmark federal-funds rate to a range between 1.5% and 1.75%. The largest US interest rate increase in\n28 years, the Fed signposted that it would continue lifting rates in 2022 as it\nstrives to tackle surging inflation. The third rate rise since March, more are expected,\nwith the median Fed policymaker indicating interest rates to sit at around 3.4%\nby the end of 2022. <\/p>\n<\/div>\n\n

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At a press\nconference following the two-day meeting, Fed Chairman Jerome Powell described\nthe rate rise as \u201cunusually large,\u201d <\/em>adding, “It is essential\nthat we bring inflation down\u2026 Inflation has obviously surprised to the upside\nover the past year and further surprises could be in store. We therefore will\nneed to be nimble.”<\/em><\/p>\n<\/div>\n\n

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By choosing to raise rates more aggressively, the Fed is seeking\nwhat it calls a \u2018soft landing\u2019 <\/em>which would slow inflation without\ncausing a recession. The next Federal Open Market Committee (FOMC) meeting will\nbe held during the last week of July.<\/p>\n<\/div>\n\n

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Travel woes<\/strong><\/strong><\/p>\n<\/div>\n\n

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Railway workers kicked off three days of strikes on Tuesday\n(21st<\/sup>), with Thursday (23rd) and Saturday (25th) also earmarked, in\nwhat is due to be the biggest national rail strikes in 30 years. With only half of Britain\u2019s rail network expected\nbe open on the strike days, with a very limited service, economists expect the strike to cost the\nnation around \u00a3100m.  Kate Nicholls, Chief Executive of\nUKHospitality, said this is a \u201chuge blow\u201d<\/em> to businesses already dealing\nwith staff shortages and soaring energy prices, she continued, “Our\ncustomers and staff rely heavily on public transport to visit our venues,\nespecially in towns and cities, where recovery is proving most difficult.”<\/em><\/p>\n<\/div>\n\n

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Meanwhile, chaos at UK\nairports continues, as the\naviation industry is still in the process of ramping up staff levels, after\nmany workers were made redundant or changed jobs during the pandemic.<\/p>\n<\/div>\n\n

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

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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 as\nup 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><\/p>\n<\/div>\n\n

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All details are\ncorrect at time of writing (22 June 2022)<\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

\u2018We have the tools and determination we need to reduce inflation and I am confident the Bank will play their part in making that happen\u2019 The Monetary Policy Committee (MPC) voted to raise Bank Rate last week, hiking the rate from 1% to 1.25%, the fifth consecutive rate rise. The MPC voted six to three […]<\/p>\n","protected":false},"author":12,"featured_media":6707,"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\/6586"}],"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=6586"}],"version-history":[{"count":1,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/6586\/revisions"}],"predecessor-version":[{"id":6692,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/6586\/revisions\/6692"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/6707"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=6586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=6586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=6586"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=6586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}