17 April 2023 - Bailey predicts more rate hikes
Bank of England Governor Andrew Bailey speaking at the IMF last Friday, played down the risk of further disruption to the UK banking sector. Turmoil created by the collapse of two U.S. regional banks and the issues that led to Credit Suisse having to accept a forced takeover by Union Bank of Switzerland, Bailey is fading, and believes that the reforms that have taken place since 2008 have reinforced the sector. However, he still acknowledged the risk inherent in the overall financial sector due to the growth of non-bank institutions such as hedge funds and pension companies. He believes that there will need to be fresh legislation brought in by the Financial Conduct Authority and approved by the Government in order to better control their affairs. Bailey acknowledged that this is a difficult path to negotiate since these funds contribute a significant amount to the UK economy in tax. Last week, Sterling continued its recent rise against a weakening dollar. The overall situation created by G7 Central Banks considering bringing to an end their recent cycles of tiger monetary policy is the overriding driver of the currency market currently. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.