MARK CARNEY WARNS OF ?LIQUIDITY TRAP?

Mark Carney, governor of the Bank of England, has said the global economy is heading towards a ?liquidity trap? that would undermine central banks? efforts to avoid a future recession (Financial Times, £, p1). The Telegraph (online only) explains that a global liquidity trap occurs when central banks lose all ability to manage the economy effectively because demand is weak and looser policy does not encourage any additional spending.

Despite his concerns, Mr Carney is optimistic about the City's prospects after Brexit and argues there is no point in London, as a world financial centre, being a rule taker from Brussels (Reuters).

PRIME MINISTER TO MEET WITH EUROPEAN COMMISSION PRESIDENT

Boris Johnson will today meet with Ursula von der Leyen, president of the European Commission, to map out his vision of an ?ambitious free trade agreement? (Financial Times, p2, £). The prime minister's insistence that Britain must have the right to diverge from EU rules has received some criticism from British industry because it would introduce new friction and costs at the border, the paper reports.

The Daily Mail reports that Mr Johnson will tell Mrs von der Leyen he wants a looser Canada-style free trade agreement without the close political alignment once planned by Theresa May.

NEWS IN BRIEF

Hackers are reportedly holding foreign exchange company Travelex to ransom after a cyber-attack forced the firm to turn off all computer systems (BBC News).

The Treasury has launched a review of the proposed changes to off-payroll working rules, known as IR35 (The Times, p36, £).

HMRC failed to warn people it had launched investigations into the administrators of fraudulent pension schemes registered with it, meaning victims continued to transfer money into the schemes (Daily Mail, Money Mail, p37).

Homes have become less affordable over the past ten years as house prices grew significantly ahead of wages, according to data from Nationwide (The Times, p36, £).

The Bank of England and the Financial Conduct Authority have set out plans to put data at the centre of their supervision strategy for the City of London (Financial News).

WHAT THE COMMENTATORS SAY

Katherine Griffiths, Banking Editor at The Times (£, p37), writes that someone tough but fair is required to replace Andrew Bailey at the Financial Conduct Authority (FCA). As the FCA regulates almost 60,000 companies, Ms Griffiths says that Mr Bailey's replacement should go further in acting decisively against a few companies to send a clear message to the City.

Ms Griffiths says a big advantage for the next FCA boss would be someone with a sharp commercial nose, or an asset manager who could reform the industry's standards on fees and performance.

She notes that privacy, data and the role of internet giants in the financial sphere will be key challenges for the future chief executive, as well as traditional questions about fairness in pricing and terms, and the impact of Brexit (The Times, £, B37).

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In our latest blog post, Stephen Pegge, our Managing Director of Commercial Finance, reflects on the year ahead for UK businesses and their working capital requirements.  

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Katy Worobec, Managing Director of Economic Crime at UK Finance, looks ahead to February's Economic Crime Congress.