INFLATION LEVELS MAY LEAD TO AN EARLIER RISE IN INTEREST RATES

UK inflation is expected to rise above four per cent by the end of the year, in part driven by rising energy costs, the Bank of England has said (BBC News). The Bank's Monetary Policy Committee (MPC) held interest rates at 0.1 per cent yesterday, but economists are now predicting that rates will start to rise as soon as February next year (Telegraph). The MPC minutes also included downgrades to growth forecasts: third quarter growth was reduced from 2.9 per cent to 2.1 per cent, which would leave the economy about 2.5 per cent below its pre-pandemic level (The Times).

CHANCELLOR TO MAKE REGULATORY CHANGES IN RESPONSE TO GREENSILL CAPITAL COLLAPSE

The Financial Times reports that chancellor Rishi Sunak will conduct two reviews of financial regulation pertaining to the collapse of Greensill Capital. Mr Sunak was responding to a report made by the Treasury Committee and said there would be reform of the appointed representatives regime and a change in control process that regulates who can acquire the ownership of a bank. He did not accept all their recommendations however, arguing that the government does not believe supply chain finance posed systemic risk to the wider economy.

NEWS IN BRIEF

BP has said it has temporarily closed some of its petrol stations due to a shortage of lorry drivers (BBC News).

Restaurant owners will be banned from keeping customer tips and service charge payments from workers under legislation being introduced by the government (Guardian).

London has continued to be ranked as the second best financial centre, behind New York, according to the 30th edition of Z/Yen Group and the China Development Institute's global financial centre index (CityAM).

The GfK consumer confidence index, used by the Bank of England and HM Treasury, fell five points in September, which means it has fallen back to the level recorded in April this year (The Times).

LATEST BLOGS

Ayesha Ghafoor, Manager, Capital Markets and Wholesale, UK Finance, discusses the future of UK wholesale capital markets following our response to the HM Treasury Wholesale Markets Review.