Latest news with #borrowingCosts
Reuters
22-07-2025
- Business
- Reuters
Bank of England's Bailey says rise in borrowing costs is not just a UK issue
LONDON, July 22 (Reuters) - Bank of England Governor Andrew Bailey said on Tuesday that a rise in British government borrowing costs was not out of line with increases in other countries. "We have seen steepening of yield curves going on now," Bailey told lawmakers on parliament's Treasury Committee. "I think the important thing to say is that is a global phenomenon. It's not in any sense unique to this country. In fact, the pattern in this country is not in any sense out of line with what we've seen in other markets, and we've seen steeper increases in some other markets." Rising borrowing costs were being driven by concerns about the impact on global trade from trade policy decisions and uncertainty about fiscal policy, he said. U.S. President Donald Trump has imposed tariffs on imports of many goods and has also won approval in Congress for tax cuts that are forecast to push up U.S. public debt. Bailey was speaking to the Treasury Committee alongside other members of the BoE's Financial Policy Committee. Randall Kroszner, a former U.S. Federal Reserve official who is a member of the FPC, said he saw no clash between financial stability and a relaxation of regulations announced by finance minister Rachel Reeves. "But always the devil is in the detail," Kroszner said.
Yahoo
22-07-2025
- Business
- Yahoo
Bank of England's Bailey says rise in borrowing costs is not just a UK issue
LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Tuesday that a rise in British government borrowing costs was not out of line with increases in other countries. "We have seen steepening of yield curves going on now," Bailey told lawmakers on parliament's Treasury Committee. "I think the important thing to say is that is a global phenomenon. It's not in any sense unique to this country. In fact, the pattern in this country is not in any sense out of line with what we've seen in other markets, and we've seen steeper increases in some other markets." Rising borrowing costs were being driven by concerns about the impact on global trade from trade policy decisions and uncertainty about fiscal policy, he said. U.S. President Donald Trump has imposed tariffs on imports of many goods and has also won approval in Congress for tax cuts that are forecast to push up U.S. public debt. Bailey was speaking to the Treasury Committee alongside other members of the BoE's Financial Policy Committee. Randall Kroszner, a former U.S. Federal Reserve official who is a member of the FPC, said he saw no clash between financial stability and a relaxation of regulations announced by finance minister Rachel Reeves. "But always the devil is in the detail," Kroszner said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
08-07-2025
- Business
- Bloomberg
Romania to Hold Rates as Tax Changes Hit Prices: Decision Guide
Romania's central bank is likely to leave borrowing costs unchanged as the government's recently announced tax hikes are expected to trigger a new spike in inflation over the coming months. The National Bank of Romania will hold the benchmark rate at 6.5% for a seventh meeting, according to all 13 economists in a Bloomberg survey.
Sky News
07-07-2025
- Business
- Sky News
Building societies step up protest against Reeves's cash ISA reforms
Building society chiefs will this week intensify their protests against the chancellor's plans to cut cash ISA limits by warning that it will push up borrowing costs for homeowners and businesses. Sky News has obtained the draft of a letter being circulated by the Building Societies Association (BSA) among its members which will demand that Rachel Reeves abandons a proposed move to slash savers' annual cash ISA allowance from the existing £20,000 threshold. The draft letter, which is expected to be published this week, warns the chancellor that her decision would deter savers, disrupt Labour's housebuilding ambitions and potentially present an obstacle to economic growth by triggering higher funding costs. "Cash ISAs are a cornerstone of personal savings for millions across the UK, helping people from all walks of life to build financial resilience and achieve their savings goals," the draft letter said. "Beyond their personal benefits, Cash ISAs play a vital role in the broader economy. "The funds deposited in these accounts support lending, helping to keep mortgages and loans affordable and accessible. "Cutting Cash ISA limits would make this funding more scarce which would have the knock-on effect of making loans to households and businesses more expensive and harder to come by. "This would undermine efforts to stimulate economic growth, including the Government's commitment to delivering 1.5 million new homes. "Cutting the Cash ISA limit would send a discouraging message to savers, who are sensibly trying to plan for the future and undermine a product that has stood the test of time." The chancellor is reportedly preparing to announce a review of cash ISA limits as part of her Mansion House speech next week. While individual building society bosses have come out publicly to express their opposition to the move, the BSA letter is likely to be viewed with concern by Treasury officials. The Nationwide is by far Britain's biggest building society, with the likes of the Coventry, Yorkshire and Skipton also ranking among the sector's largest players. In the draft letter, which is likely to be signed by dozens of building society bosses, the BSA said the chancellor's proposals "would make the whole ISA regime more complex and make it harder for people to transfer money between cash and investments". "Restricting Cash ISAs won't encourage people to invest, as it won't suddenly change their appetite to take on risk," it said. "We know that barriers to investing are primarily behavioural, therefore building confidence and awareness are far more important." The BSA called on Ms Reeves to back "a long-term consumer awareness and information campaign to educate people about the benefits of investing, alongside maintaining strong support for saving". "We therefore urge you to affirm your support for Cash ISAs by maintaining the current £20,000 limit. "Preserving this threshold will enable households to continue building financial security while supporting broader economic stability and growth." The BSA declined to comment on Monday on the leaked letter, although one source said the final version was subject to revision.
Daily Mail
04-07-2025
- Business
- Daily Mail
Roller-coaster week sends UK yields higher
UK borrowing costs have seen their first weekly rise since May after a 'rollercoaster' ride sparked by growing fears about Labour's handling of the public finances. Ten-year borrowing costs shot close to 4.7 per cent on Wednesday after a tearful House of Commons appearance by Chancellor Rachel Reeves sparked doubts about her future. And though the moves in UK bonds – known as gilts – were mainly reversed in the following days as the Prime Minister backed Reeves, the episode added to worries sparked by the Government's humiliating climbdown on welfare reforms on Tuesday. Yields last night ended the week at 4.56 per cent, up from 4.5 per cent the previous Friday. It was the first weekly increase after a steady run of declines since mid-May. That partly reflected global moves as US bond yields turned higher thanks to worries about America's ballooning debt and trade tariffs. Nevertheless, it will pile further pressure on the beleaguered Chancellor as the increased borrowing costs will make it even harder to balance the books. Oliver Faizallah, head of fixed income research at wealth advisers Charles Stanley, said: 'This week's blowout was a reminder that the gilt market will not take kindly to excess borrowing.' Yields on UK ten-year bonds, known as gilts, began the week at around 4.5 per cent and eased close to 4.4 per cent ahead of the welfare vote in Parliament on Tuesday night – when it seemed Labour would manage largely to push through its plans. But last-minute concessions that helped the Government win the vote wiped out the intended savings. That blew a £5billion hole in the Chancellor's plans and sending yields racing towards 4.5 per cent the next day, before they climbed even further after Reeves' Commons appearance. It added to the damage to public finances caused by a previous U-turn on winter fuel payments, a deteriorating growth outlook and an increased commitment to defence spending. Andrew Goodwin, of Oxford Economics, said the volatility in gilts 'emphasises the need for fiscal discipline'. The sharp rise in yields reflected anxiety in the markets that, despite the Labour Chancellor's dismal economic record so far, her successor might prove even more of a worry by loosening the Government's commitment to balancing the books. Instead, ministers will need to try to find the missing billions elsewhere. Goodwin said: 'The experience will have demonstrated to the Government that markets will likely look unfavourably on any further loosening of the fiscal rules, increasing the chances that we see large tax rises in the Budget this autumn.'
