WEAKENING FINANCIAL REGULATION COULD COST THE ECONOMY WARNS BANK OF ENGLAND

An easing of regulations introduced following the 2008 financial crisis ?would bring serious costs to the economy in bad times?, Alex Brazier, executive director for financial stability, strategy and risk at the Bank of England said yesterday (The Times, p36, £). In a speech in Edinburgh, Mr Brazier said that the Bank was ready for a ?no-deal? Brexit and added that the UK's departure from the EU could bring the potential benefit of flexibility in rule setting, provided this was not used to reduce the level of oversight.

Meanwhile, Reuters (online only) reports on Mr Brazier's comments that more realistic rules for investors wanting to move cash from funds could make investing in infrastructure more attractive and bolster economic growth. The comments follow British fund manager Neil Woodford's decision to suspend his flagship equities fund this year.

BRITISH MANUFACTURING ACTIVITY AT SEVEN-YEAR LOW

Manufacturing activity fell at the fastest rate since 2012 in August with concerns over economic and political uncertainty as well as trade tensions being the root cause, according to the latest data from IHS Markit (The Times, p34, £; Financial Times, p4, £). The organisation's purchasing managers index fell to 47.4 last month, down from 48 in July and the fourth consecutive monthly decline. Any reading below 50 means more firms reporting a contraction than expansion.

Separate figures from the British Retail Consortium and KPMG found that retail sales last month declined by 0.5 per cent on a like-for-like basis compared to August 2018. The average sales growth over the last 12 months has been the lowest since the survey began in 1995 (Daily Telegraph, B5, £).

NEWS IN BRIEF

Two fraudsters who stole almost £500,000 from bank customers to live 'Premier League footballers' lifestyles have been jailed thanks to the work of the industry-funded Dedicated Card Payment Crime Unit (DCPCU) (Daily Mail, online only).

The Financial Times (£, p2) reports on a meeting between the chancellor and senior figures from the banking and finance industry yesterday, at which Mr Javid is reported to have stressed that the sector should be able to continue to employ skilled staff from across the EU within a ?light touch? immigration regime.

John Lewis alerted customers yesterday to the potential changes they may see when making payments in store or via its website, with the start of the rollout of the new Strong Customer Authentication rules by banks and card companies to help reduce card fraud (BBC News, online only).

More than a quarter of people aged 55 believe they will still be making mortgage repayments when they reach 70 years of age and two in five first time buyers in 2017 will still be repaying home loans when they are 65, according to research by the Financial Conduct Authority (The Daily Mirror, p.20).

Facebook's Libra digital currency could ?reduce the ECB's control over the Euro' and ?undermine the single currency's international role? depending on it's level of acceptance and referencing of the Euro in its reserve basket, Yves Mersch, a board member of the European Central Bank, said in a speech in Frankfurt yesterday (Daily Telegraph, B3, £).

China's economic growth is likely slow to 5.7 per cent in the last quarter of 2019 and remain broadly at that pace in 2020, even with increased stimulus from policymakers, according to Oxford Economics (Bloomberg, online only). 

WHAT THE COMMENTATORS SAY

Writing in the Financial Times (p13, £), Philipp Hildebrand, vice-chairman of BlackRock and a former chairman of the governing board of the Swiss National Bank, argues that monetary policy no longer provides the ?ammunition? that central banks need to respond to a recession and instead new tools are required. Hildebrand proposes the adoption of new ?going direct? policies whereby central banks would give bank funds directly to the public and private sectors to stimulate the economy, rather than relying on interest rates to do so.

LATEST BLOGS

Matthew Drage from Huntswood discusses the keys needed to ensure a satisfying complaints experience, and the high value that can be unlocked by holding on to loyal customers.

LATEST VIDEOS

Stephen Jones, CEO, UK Finance discusses some of the progress we have made working with our membership across key policy areas in the first half of 2019. Watch here.