Rachel Reeves warned that deregulation risks financial crisis
Andrew Bailey told a group of influential MPs on Tuesday that rolling back restrictions on the City and ditching bank ringfencing guidelines could destabilise the UK financial system and 'would not be [a] sensible' decision for the time being.
In a near two-hour long session with the Treasury select committee before the parliamentary summer recess, Bailey also said that the rise in long-term government debt costs was not 'unique' to the UK. He said investors were ditching US assets to curb their exposure to the dollar owing to concerns about the economy since President Trump returned to the White House.
The governor, who, alongside his role at the central bank, recently took up the chairmanship of the Financial Stability Board, said he could understand why some people would think that 'the financial crisis is now way in the past, we've got past that, that's all solved, that's all out of the way, move on'.
However, he said that 'for those of us who were veterans of sorting the problems of [the financial crisis] out' there remained a live threat to financial stability which required lawmakers to retain robust regulations.
His comments come after the chancellor told bankers at the annual Mansion House dinner this month that the UK's regulatory regime was a 'boot on the neck' of businesses which risked 'choking [them] off'. Bailey, 66, said he would not have used such phrasing.
Reeves announced that the government would reform laws that require lenders to separate their retail and investment banking businesses, a requirement put in place after the 2008 global financial crisis to shield depositors from banks' riskier activities.
Several City grandees, including Sir John Vickers, the architect of the ringfencing rules, have expressed concern at the government's deregulation drive, which is intended to reverse weak economic growth.
Bailey also downplayed the rise in UK government borrowing costs and said that it was part of a worldwide trend created by Trump's volatile tariff policymaking and a general rise in public deficit spending.
'We've seen an increase in term premium in government bond markets… yield curves have steepened', Bailey said, adding this was 'a global phenomenon, it is not in any sense unique [to the UK]'.
The rate on the 30-year UK government bond, or gilt, stands at 5.43 per cent, up from 4.67 per cent compared to a year ago. The yield, which moves inversely to prices, on the US equivalent has risen to 4.93 per cent from 4.48 per cent over the same period.
Bailey's comments come as figures from the Office for National Statistics on Tuesday showed that UK debt interest spending jumped to £16.4 billion in June, the second-highest for that month since the records began in 1997. Government borrowing topped £20 billion in the month also, above the Office for Budget Responsibility's projection for the month, strengthening expectations for tax increases at the autumn budget.
Trump's erratic decision-making on how much to tax imports from specific countries had led to 'rebalancing' among markets 'which involves a reduction in exposure to dollar assets', Bailey said. The dollar index, which measures the greenback against six comparable currencies, is down nearly 10 per cent since the start of the year.
The governor said that, judging by conversations with market participants and based on granular data, 'the most crowded trade in the market at the moment is short dollar'.
He said that since Trump first announced his 'reciprocal tariffs' in April, there had been 'a breakdown in established correlations in markets'.
Stock markets globally jolted lower in the immediate aftermath of Trump's first tariff announcements, with the S&P 500 index posting one of its largest losses since the Great Depression. However, an equity rally has since pushed several indices to a record high. This week, the FTSE 100 closed at its highest-ever level of just over 9,000 points.
Taxes on goods imported to the US from most countries will increase sharply from August 1 after Trump delayed the implementation of his 'reciprocal tariffs' several times.
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Scottish Sun
10 minutes ago
- Scottish Sun
Outrage as luxury £425 a night hotel paid for by YOU taken over to house asylum seekers in ‘insult to law-abiding Brits
Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) BRITAIN'S borders fiasco worsened last night when the Home Office took over a four-star hotel that costs tourists up to £425 a night. Rooms at the Britannia International, which boasts 'superb views over London', are being readied for asylum seekers at taxpayers' expense in anticipation of a summer surge in Channel crossings. Sign up for Scottish Sun newsletter Sign up 7 A luxury £425 a night London hotel funded by taxpayers has been handed over to house asylum seekers Credit: Ray Collins 7 The Britannia International — in flash financial district Canary Wharf The move was last night branded an 'insult'. Residents and business owners said they fear for their safety, and that it would attract protests. A demo was held there on Tuesday and yesterday police guarded the hotel, while a fence had been thrown up around its entrance. Workers hauled beds inside, as Tower Hamlets Council confirmed it would be used for migrants — and said they should get the 'full package of support'. Britannia Hotels has hailed its biggest and flagship residence — as a 'modern, glass-fronted building close to the internationally famous business district'. When open to the public, a standard room can cost as much as £425 a night. They are said to have 'superb views over London'. The hotel offers two restaurants and bars, making it the 'perfect base for a city break'. Amenities include a games room with a pool table and gym. It is unclear if migrants will be allowed to use them. Farage fury as cops admit ESCORTING pro-migrant protesters to Essex asylum hotel An indoor pool and sauna are thought to have been shut down. Shadow Home Secretary Chris Philp told The Sun: 'It is outrageous that the Government is splurging taxpayers' hard-earned money on luxury hotels for illegal immigrants when most people in this country would struggle to afford a hotel in central London. 'This is one of the most luxurious hotels people can only dream of staying in, right in the heart of London's financial centre. 'No wonder illegal immigrants are flooding across the channel in record numbers when this weak Labour government welcomes them with hotel accommodation funded by hard-working taxpayers. 'This is an insult to law-abiding citizens. 'The Government must urgently act to deport every single illegal arrival, then the crossings would rapidly stop but Keir Starmer is too weak to do this.' Susan Hall, Tory leader in London's City Hall, added: 'It's incredible that four-star hotels like this are being used to house migrants. 'This move will damage every small firm in Canary Wharf trying to survive. 'Women and children, I can tell you, don't feel safe around these hotels in London. 'It shows things are getting worse and worse for hard-working Brits, who are trying to keep their families going. 'This is the damage it is doing to society, and I think it is going to cause a really serious problem.' Some 23,534 migrants have already arrived on small boats this year — 48 per cent higher than this time in 2024. Sources indicated the International will remain empty until necessary, with the Home Office striking a deal to rent 400 rooms for £81 a night. Britannia Hotel The Britannia International Hotel is a modern, glass-fronted building close to the internationally famous business district. It sports superb views over the London skyline, two on-site restaurants, bars and en-suite bedrooms, making it the perfect base for a city break. It means the weekly bill for the hotel could be up to £226,800 if every room is used. Yesterday labourers were seen carrying mattresses into the hotel shortly after 8am. A team flanked by private security also brought in metal bed frames and a pallet of orange juice and food. We've lost our jobs at the hotel. We are taxpayers and have done nothing wrong Cleaner at the hotel It is thought agency staff have been drafted in to run it, with existing contractors let go. A cleaner and mum of two arrived for her last shift yesterday and said: 'I don't think it's right that I and all the staff have been given redundancy letters. 'We are taxpayers and have done nothing wrong. 'Now we will struggle to make ends meet. 'We are gutted.' On Tuesday 150 anti-migrant activists protested outside the International until 9pm. Just five took part in a counter protest. Some flocked there amid false rumours circulated by far-right thug Tommy Robinson that migrants had arrived there from the Bell Hotel in Epping, Essex — also the scene of demos. Around 50 cops were drafted in to Canary Wharf, with no arrests. 7 Workers hauled beds inside, as Tower Hamlets Council confirmed it would be used for migrants Credit: SelwynPics 7 Inside the expensive hotel Credit: Reform's chief whip Lee Anderson was at the International demo and said he was 'absolutely furious' at the hotel's closure. The MP added: 'This hotel here — it must cost a couple of hundred quid a night to stay there. 'Most normal people in this country would not be able to afford to stay here for a weekend, but we have illegals coming here.' Yesterday local homeowners told of their fears that a migrant hotel would tank property values. Software engineer Matt, who declined to give his surname, said: 'The houses here go for £1million, though probably not any more. 'I'm really worried about house prices going down. 'Now seems a bad time to sell up.' Mary, 58, who lives five minutes away, fumed: 'This used to be the best place in the world but it's gone to the dogs. 'I struggle on my pension. 'I paid taxes all my life. And they are in a four-star hotel?' It is thought there are 210 asylum hotels in the UK. It is important that the Government ensures that there is a full package of support for those staying at the hotel The council Chancellor Rachel Reeves and Home Secretary Yvette Cooper have pledged to cut their use entirely by 2029. The Britannia Hotel group was approached for comment. It has a portfolio of 64 UK hotels and is a major provider of asylum accommodation. A cost-cutting drive has seen the average price of a migrant hotel room fall to £118.87, down from £162.16 in March 2023. Last month we told how the annual asylum support bill of £4.7billion was equivalent to the annual taxes forked out by a city the size of Manchester. Tower Hamlets Council said: 'We are aware of the Government's decision to use the Britannia Hotel in Canary Wharf to provide temporary accommodation for asylum seekers. 'It is important the Government ensures there is a full package of support for those staying at the hotel. 'We are working with the Home Office and partners to make sure that all necessary safety and safeguarding arrangements are in place.' The Home Office said: 'We inherited a broken asylum system from the Tories with costs spiralling out of control. 'As part of the plan to restore order and close all asylum hotels by the end of the parliament, we are boosting border security, substantially increasing removals of those with no right to be here. 'We are also tackling the Tories' wasteful contracts by ending the use of more expensive accommodation and moving to cheaper options.' 7 Anti-migrant demonstrators at the hotel on Tuesday evening Credit: UKNIP 7 Police officers guard the hotel entrance Credit: Ray Collins
Daily Mail
11 minutes ago
- Daily Mail
Americans swoop on yet another UK fintech champion: Corpay to buy FTSE 250 Alpha Group in £1.8bn deal
Another British fintech champion is to be bought by American predators – in a deal worth £1.8billion. The board of Alpha Group – led by former Virgin Money boss Jayne-Anne Gadhia – has accepted a bid from US payments giant Corpay. Shares in the FTSE 250 payments company soared more than 25 per cent after bosses recommended that investors back a sweetened 4250p-per-share offer. The deal comes amid a mounting crisis as a takeover frenzy accelerates. Research from broker Peel Hunt shows the UK is on course for the biggest year of takeovers since 2021, after £74billion of offers in the first half of 2025. Scientific testing firm Spectris has agreed to be bought by American private equity firm KKR for £4.7billion in the biggest deal of the year after a bidding war with Advent International. US semiconductor group Qualcomm is to buy British chipmaker Alphawave for £1.8billion and Deliveroo was swooped on by DoorDash with a £2.9billion offer. Another takeover battle saw Primary Health Properties beat KKR to buy GP surgery owner Assura for £1.8billion. And companies are switching listings to New York, with fintech darling Wise the latest planning to defect. Meanwhile, a lack of fresh listings through initial public offerings means they are not being replaced. Alpha turned down Corpay's initial £1.2billion offer in May but, after talks, the latest bid is a 55 per cent premium to Alpha's undisturbed share price of 2745p on May 1, before news of the takeover interest became public. Dan Coatsworth, an investment analyst at AJ Bell, said: 'The market completely misjudged how much Corpay would offer, judging by the share price jump on the formal bid. 'While the shares enjoyed a little bump on the initial approach, the market didn't price in a successful bid. The fact Alpha rejected a proposal made it clear to Corpay that it would have to dig a lot deeper or walk away. 'It got the message loud and clear and Corpay looks to have gone in with its best offer. 'The 55 per cent bid premium is much more generous than the 40 per cent average seen across UK-listed takeovers so far in 2025.' Corpay, an S&P 500 company with a market capitalisation of around £17billion, has its headquarters in Atlanta, Georgia. Following the sale, Alpha will continue to be based in London. But there could be 'possible role overlaps' in some administrative and head office functions, the companies have warned. If job cuts are made solely within Alpha's business, it could affect up to 13 per cent of staff. The takeover, which must be approved by 75 per cent of shareholders, is expected to complete in the final quarter of the year. Alpha chairman Gadhia said: 'I am delighted Corpay has made an offer which the board considers to be in the best interests of shareholders, clients and staff.' Corpay boss Ronald Clarke said: 'We couldn't be happier to acquire Alpha.'
The Sun
11 minutes ago
- The Sun
Outrage as luxury £425 a night hotel paid for by YOU taken over to house asylum seekers in ‘insult to law-abiding Brits
BRITAIN'S borders fiasco worsened last night when the Home Office took over a four-star hotel that costs tourists up to £425 a night. Rooms at the Britannia International, which boasts 'superb views over London', are being readied for asylum seekers at taxpayers' expense in anticipation of a summer surge in Channel crossings. 7 7 The move was last night branded an 'insult'. Residents and business owners said they fear for their safety, and that it would attract protests. A demo was held there on Tuesday and yesterday police guarded the hotel, while a fence had been thrown up around its entrance. Workers hauled beds inside, as Tower Hamlets Council confirmed it would be used for migrants — and said they should get the 'full package of support'. Britannia Hotels has hailed its biggest and flagship residence — as a 'modern, glass-fronted building close to the internationally famous business district'. When open to the public, a standard room can cost as much as £425 a night. They are said to have 'superb views over London'. The hotel offers two restaurants and bars, making it the 'perfect base for a city break'. Amenities include a games room with a pool table and gym. It is unclear if migrants will be allowed to use them. An indoor pool and sauna are thought to have been shut down. Shadow Home Secretary Chris Philp told The Sun: 'It is outrageous that the Government is splurging taxpayers' hard-earned money on luxury hotels for illegal immigrants when most people in this country would struggle to afford a hotel in central London. 'This is one of the most luxurious hotels people can only dream of staying in, right in the heart of London's financial centre. 'No wonder illegal immigrants are flooding across the channel in record numbers when this weak Labour government welcomes them with hotel accommodation funded by hard-working taxpayers. 'This is an insult to law-abiding citizens. 'The Government must urgently act to deport every single illegal arrival, then the crossings would rapidly stop but Keir Starmer is too weak to do this.' Susan Hall, Tory leader in London's City Hall, added: 'It's incredible that four-star hotels like this are being used to house migrants. 'This move will damage every small firm in Canary Wharf trying to survive. 'Women and children, I can tell you, don't feel safe around these hotels in London. 'It shows things are getting worse and worse for hard-working Brits, who are trying to keep their families going. 'This is the damage it is doing to society, and I think it is going to cause a really serious problem.' Some 23,534 migrants have already arrived on small boats this year — 48 per cent higher than this time in 2024. Sources indicated the International will remain empty until necessary, with the Home Office striking a deal to rent 400 rooms for £81 a night. It means the weekly bill for the hotel could be up to £226,800 if every room is used. Yesterday labourers were seen carrying mattresses into the hotel shortly after 8am. A team flanked by private security also brought in metal bed frames and a pallet of orange juice and food. It is thought agency staff have been drafted in to run it, with existing contractors let go. A cleaner and mum of two arrived for her last shift yesterday and said: 'I don't think it's right that I and all the staff have been given redundancy letters. 'We are taxpayers and have done nothing wrong. 'Now we will struggle to make ends meet. 'We are gutted.' On Tuesday 150 anti-migrant activists protested outside the International until 9pm. Just five took part in a counter protest. Some flocked there amid false rumours circulated by far-right thug Tommy Robinson that migrants had arrived there from the Bell Hotel in Epping, Essex — also the scene of demos. Around 50 cops were drafted in to Canary Wharf, with no arrests. 7 7 Reform's chief whip Lee Anderson was at the International demo and said he was 'absolutely furious' at the hotel's closure. The MP added: 'This hotel here — it must cost a couple of hundred quid a night to stay there. 'Most normal people in this country would not be able to afford to stay here for a weekend, but we have illegals coming here.' Yesterday local homeowners told of their fears that a migrant hotel would tank property values. Software engineer Matt, who declined to give his surname, said: 'The houses here go for £1million, though probably not any more. 'I'm really worried about house prices going down. 'Now seems a bad time to sell up.' Mary, 58, who lives five minutes away, fumed: 'This used to be the best place in the world but it's gone to the dogs. 'I struggle on my pension. 'I paid taxes all my life. And they are in a four-star hotel?' It is thought there are 210 asylum hotels in the UK. It is important that the Government ensures that there is a full package of support for those staying at the hotel The council Chancellor Rachel Reeves and Home Secretary Yvette Cooper have pledged to cut their use entirely by 2029. The Britannia Hotel group was approached for comment. It has a portfolio of 64 UK hotels and is a major provider of asylum accommodation. A cost-cutting drive has seen the average price of a migrant hotel room fall to £118.87, down from £162.16 in March 2023. Last month we told how the annual asylum support bill of £4.7billion was equivalent to the annual taxes forked out by a city the size of Manchester. Tower Hamlets Council said: 'We are aware of the Government's decision to use the Britannia Hotel in Canary Wharf to provide temporary accommodation for asylum seekers. 'It is important the Government ensures there is a full package of support for those staying at the hotel. 'We are working with the Home Office and partners to make sure that all necessary safety and safeguarding arrangements are in place.' The Home Office said: 'We inherited a broken asylum system from the Tories with costs spiralling out of control. 'As part of the plan to restore order and close all asylum hotels by the end of the parliament, we are boosting border security, substantially increasing removals of those with no right to be here. 'We are also tackling the Tories' wasteful contracts by ending the use of more expensive accommodation and moving to cheaper options.' 7 7 7
