Latest news with #DavidMilliken
Yahoo
09-07-2025
- Business
- Yahoo
Bank of England sees ongoing financial stability risks from global tensions
By David Milliken and Lawrence White LONDON, July 9 (Reuters) - Risks to financial markets remain high despite an easing of tensions after the United States paused implementing tariffs announced in April, the Bank of England said on Wednesday. The British central bank said it continued to see dangers from "geopolitical tensions, global fragmentation of trade and financial markets and pressures on sovereign debt" in a half-yearly assessment of threats to financial stability. "The risk of sharp falls in risky asset prices, abrupt shifts in asset allocation and a more prolonged breakdown in historical correlations remains high," the BoE's Financial Policy Committee said. Global share prices tumbled at the start of April and British 30-year government borrowing costs rose to their highest since the late 1990s after President Donald Trump announced wide-ranging tariffs on exports to the United States. While share prices have largely recovered, bond markets remain nervous about the scale of future borrowing possible in the United States, Britain and elsewhere. Last week British bond prices fell sharply after the government had to scale back plans to cut welfare payments in the face of parliamentary opposition and doubts briefly swirled about the future of finance minister Rachel Reeves. On Tuesday, Britain's Office for Budget Responsibility described the country's public finances as being in a "relatively vulnerable position" after the COVID-19 pandemic and that the government had failed to scale back spending since. The BoE said Britain's government bond market had functioned efficiently during market tension in April, but noted that the external stress was relatively short-lived. "Conditions might have become more strained had the episode of volatility lasted longer," the BoE said. The central bank said it was releasing more data on aggregate market positions so firms could better guard against risks. British households and businesses overall remained resilient and the domestic banking system was well placed to keep lending even if there was a sharp economic deterioration, it said. As a result, there were no domestic reasons to change the counter-cyclical capital buffer from 2%, the FPC said. The CCyB is varied over the credit cycle to ensure banks build up a cushion against future losses during good times and are able to keep lending during a downturn. (( +44 20 7513 4034)) Keywords: BRITAIN BOE/ Sign in to access your portfolio
Reuters
09-07-2025
- Business
- Reuters
UK banks can increase riskier mortgage lending, BoE says
By Lawrence White and David Milliken LONDON, July 9 (Reuters) - British banks and building societies will be able issue more mortgages at high loan-to-income levels, the Bank of England said on Wednesday. Individual lenders will now be able to have more than 15% of their lending at a high LTI ratio, although the sector as a whole will continue to have a 15% cap, the BoE said. The BoE said the move should allow more first-time buyers to get a mortgage, although it added that lenders' deposit requirements were a bigger barrier for most borrowers. The loosening of the cap on lending to riskier borrowers comes after a call by Britain's Labour government for regulators to look for ways to encourage economic growth, without risking the stability of the financial system. The loan-to-income limit was introduced in 2014 as part of measures to discourage excessively risky mortgage lending by banks which contributed to the 2008 global financial crisis. Lenders have since become better capitalised and introduced more stringent checks on borrowers. The regulators' rules define riskier mortgages as those with a loan value above 4.5 times the borrower's income. The BoE said banks' unwillingness to risk a breach of the 15% cap on such loans meant individual lenders had stayed well below the threshold, constraining growth of the mortgage market. Banks' aggregate share of high loan-to-income lending hit 9.7% in the first quarter, the BoE said, meaning few individual lenders were in any case likely to reach the 15% aggregate sectoral limit. Allowing some individual lenders to go above that threshold would likely only lead to an overall share of such riskier lending hitting 11% by the end of 2025, the BoE said. The BoE will also refresh its assessment of banks' overall capital requirements and update the market on that at its next financial stability report in December, it said, the first such review in five years. However, the BoE noted that it currently judged the overall level of capital in the system to be "broadly appropriate". (Reporting by Lawrence White and David Milliken) (( opens new tab; +44 20 7513 4034)) Keywords: BRITAIN BOE/MORTGAGES
Zawya
24-06-2025
- Business
- Zawya
ECB's Lane says fight against inflation 'largely' over
The European Central Bank has "largely" completed its fight against high inflation in the euro zone even if prices in the services sector are still growing too fast, ECB chief economist Philip Lane said on Tuesday. "While headline inflation is currently around the target, services inflation still has some distance to travel to make sure that inflation stabilises at the target on a sustainable basis," Lane told an event in London. "Still, there has been sufficient progress in returning inflation to target to consider that this monetary policy challenge is largely completed." (Reporting By David Milliken; Writing by Francesco Canepa in Frankfurt; Editing by Jan Harvey)
Yahoo
20-06-2025
- Business
- Yahoo
UK retail sales record biggest monthly drop since 2023
By David Milliken LONDON (Reuters) -British retail sales volumes recorded their sharpest drop since December 2023 last month, as demand fell after shoppers splurged on food, summer clothes and home improvements the month before, official figures showed on Friday. Retail sales volumes dropped by 2.7% in May, the Office for National Statistics said, a much sharper decline than the median forecast of 0.5% in a Reuters poll. Sales volumes were also 1.3% lower than a year earlier, the biggest annual drop since April 2024 and well below a Reuters poll forecast for 1.7% annual sales growth. The monthly decline was mainly due to what ONS statistician Hannah Finselbach described as a "dismal month for food retailers" with lower spending on alcohol and tobacco, as well as reduced footfall at clothing stores and less demand for DIY items as dry weather had allowed work to be done earlier. "The sharp 2.7% m/m drop back in retail sales volumes in May adds to other evidence that the burst of economic growth in Q1 is over. That said, consumer spending may still outperform other areas of the economy this year," Capital Economics' Chief UK Economist Paul Dales said. Sterling dropped by about a quarter of a cent against the U.S. dollar after the data, which came alongside government borrowing figures which showed a slightly larger than expected budget deficit of 17.7 billion pounds ($23.85 billion) for May. Britain's economy grew a faster-than-expected 0.7% in the first quarter of 2025 but shrank in April - due to the end of a property tax break and an initial hit from U.S. tariffs - and the Bank of England forecasts overall growth of 1% for 2025. April's retail data had shown robust 1.3% sales growth after demand was boosted by unusually sunny weather for the time of year and GfK consumer sentiment data for June, released earlier on Friday, showed the highest sentiment so far this year. However, reports from retailers have been more mixed. The British Retail Consortium said earlier this month that sales growth slowed sharply in May as shoppers had done much of their summer purchases a month earlier. Updates this month from major British retailers have been mixed. Tesco, the country's biggest food retailer, beat expectations for first quarter sales, despite what it called an "intensely competitive" market. However, struggling discounter Poundland said it plans to close 68 stores. ($1 = 0.7422 pounds)
Yahoo
12-06-2025
- Business
- Yahoo
British exports to US suffer record hit from Trump tariffs
By David Milliken LONDON (Reuters) -British goods exports to the United States suffered a record fall in April after U.S. President Donald Trump imposed new tariffs, official figures showed on Thursday, pushing Britain's goods trade deficit to its widest in more than three years. Britain exported 4.1 billion pounds ($5.6 billion) of goods to the United States in April, down from 6.1 billion pounds in March, Britain's Office for National Statistics said, the lowest amount since February 2022 and the sharpest decline since monthly records began in 1997. The 2 billion pound fall - a 33% drop in percentage terms - contributed to a bigger-than-expected drop in British gross domestic product in April. Last week Germany said its exports to the United States fell by 10.5% in April although that figure, unlike Britain's, is seasonally adjusted. The British Chambers of Commerce said the scale of the fall partly reflected manufacturers shipping extra goods in March to avoid an expected increase in tariffs. Even so, April's goods exports were 15% lower than a year earlier. "The economic effects of the U.S. tariffs are now a reality. Thousands of UK exporters are dealing with lower orders and higher supply chain and customer costs," the BCC's head of trade policy, William Bain, said. The United States is Britain's largest single goods export destination and is especially important for car makers, although total British exports to countries in the European Union are higher. Britain exported 59.3 billion pounds of goods to the United States last year and imported 57.1 billion pounds. The United States imposed 25% tariffs on British steel and aluminium on March 12 and in early April increased tariffs on imports of cars to 27.5% as well as a blanket tariff of 10% on other goods. Last month Britain agreed the outline of a deal to remove the extra tariffs on steel, aluminium and cars - the only country to do so - but it has yet to be implemented and the 10% tariff remains in place for other goods. Before the deal, the Bank of England estimated the impact of the tariffs on Britain would be relatively modest, reducing economic output by 0.3% in three years' time. BIGGER TRADE DEFICIT Thursday's data also showed that the fall in exports to the United States pushed Britain's global goods trade deficit to 23.2 billion pounds in April from 19.9 billion pounds in March, its widest since January 2022 and nearly 3 billion pounds more than had been expected by economists polled by Reuters. Excluding trade in precious metals, which the ONS says adds volatility to the data, the goods trade deficit was the widest since May 2023 at 21.6 billion pounds. Britain's total trade deficit narrowed to 5.4 billion pounds in April - also the widest since May 2023 - once the country's surplus in services exports is taken into account. ($1 = 0.7364 pounds)
