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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (2545)	11/22/2007 9:15:44 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 71479

BoE's Lomax suggests she may be leaning towards rate cut Thu, Nov 22 2007, 21:55 GMT afxnews.com HULL (Thomson Financial) - Bank of England rate setter Rachel Lomax today underlined the uncertainty facing the path of UK interest rates but also signalled that she may be leaning towards a pre-emptive rate reduction. "We can, and should respond quickly and flexibly to early signs of the changing economic weather," she said in a wide ranging speech to businessmen here today. But gauging the weather has become a tough task, she said, continuing the metaphor. "According to most recent official economic statistics, the weather is still set fair. But we know fouler weather is brewing offshore. What is still far from clear is whether we are in for a force 6 strong breeze or a full force 8 gale." Against this backdrop, she said upcoming economic data will take on added importance. "We need to be very alert to the risk that the economy may be slowing too abruptly. At current interest rate levels, monetary policy may be on the restrictive side," she said. At the rate setting panel's meeting earlier this month, Lomax voted with the majority to keep the UK base rate unchanged at 5.75 pct. But while she did not opt for a cut then, the majority appear to have been simply biding their time before delivering a reduction. Today, Lomax identified some key uncertainties facing the UK. Firstly, whether the tightening in liquidity conditions will lead to a full scale credit crunch. Secondly, how consumers will respond and thirdly just how long any impact of the first two uncertainties will last. While consumers appear to be in a relatively string position, tightening credit conditions "should act as a brake on consumer spending and investment," she said. Still, the size of this effect is highly uncertain, she stressed, adding that much will depend on how far recent developments dent future confidence although so far that does not seem to have happened. She also noted that the current problems in the credit market may have wider, long term implications. "My guess is that over the next 3-5 years, we will see a sustained -- though not necessarily complete -- reversal in these trends, as banks re-appraise the risks around certain business models and complex financial instruments," she said. On the other hand, higher energy prices are driving inflation higher, she said, citing crude oil prices which are nearing the 100 usd level. She also made one key observation -- that she and other rate setters were reluctant to lower rates in 2005 even as the economy was slowing because oil prices were also surging then. And, highlighting the dilemma facing rate setters, Lomax said: "There are always risks in signalling that policy will be eased, at a time of rising energy prices. This is all the more after a year when inflation has been above target and on some measures remains uncomfortably high." sivakumar.sithraputhran@thomson.com ss/ajb COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

To: Giordano Bruno who wrote (2545)	12/6/2007 7:34:21 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 71479

Oh, they did... BoE cuts base rate by a quarter point to 5.50 pct; 1st cut in over 2 yrs UPDATE Thu, Dec 6 2007, 12:28 GMT afxnews.com (adds BoE comments) LONDON (Thomson Financial) - The Bank of England has cut borrowing costs for the first time in over two years. The rate-setting Monetary Policy Committee (MPC) cut its benchmark Bank rate by a quarter point to 5.50 pct, its first reduction since August 2005. The MPC said that although output has expanded at a brisk pace for the past two years, there are now signs that growth has begun to slow. It cited forward-looking surveys of households and businesses which suggest spending is moderating. Furthermore, it said conditions in financial markets have deteriorated, adding that it expects a tightening in the supply of credit to households and businesses. These factors, the MPC believes, pose downside risks to the outlook for both output and inflation further ahead. It predicts that inflation will stay above the 2 pct target in the short term led by higher energy and food prices. While upside risks to inflation remain, slowing demand growth should ease the pressures on supply capacity, bringing inflation back to target in the medium term, it added. Today's vote to lower borrowing costs is likely to have been close. Though the markets moved to price in a cut after a run of softer economic data, the economists' fraternity was less sure given ongoing concerns about inflation. Less than a half of the economists polled by Thomson Financial News predicted the MPC would lower the benchmark rate although there was widespread agreement that the decision would have been one of the closest since the BoE was granted independence a decade ago. Minutes to the meeting will be published on Wednesday, Dec 19. pan.pylas@thomson.com pp/ss/ss/pp COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

To: Giordano Bruno who wrote (2545)	1/6/2008 7:24:09 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 71479

Cutting again, the British Pound continues to lose ground. looking for levels ahead of GBP 0.75/EUR, still a rocky ride... Survey Shows UK Fincl Sector Hit Hard, Confidence Plummets Mon, Jan 7 2008, 00:01 GMT djnewswires.com Survey Shows UK Fincl Sector Hit Hard, Confidence Plummets By Laurence Norman and Joe Parkinson DOW JONES NEWSWIRES LONDON (Dow Jones)--The jewel in the U.K.'s economic crown - the financial services sector - experienced its toughest quarter in years in late 2007, with business volumes falling to a 17-year low and sentiment plummeting. In their quarterly financial services survey released Monday, the Confederation of British Industry and accountancy firm PriceWaterHouseCoopers reported a balance of 49% of companies were less optimistic than three months earlier, the worst reading since 2003. Meanwhile, a balance of 33% saw business volumes, loosely defined as sales revenue, decline over the past three months and a net 23% believed volumes would decline again in the first months of 2008. A separate report from Lloyds' TSB Monday also showed U.K. firms' confidence about the outlook fell to a five-year low. "After two years of strong growth there has been a clear turnaround within the financial services sector. The credit squeeze has delivered a sharp shock to business volumes over the past three months and it seems that difficulties are likely to persist for some time yet," said Ian McCafferty, Chief Economic Adviser at the CBI, Britain's biggest business lobby group. The survey of 83 companies was carried out between Nov. 22 and Dec. 5, at the height of the recent global credit market crunch. McCafferty noted that the results therefore don't reflect the moderate easing in financial market conditions seen since global central banks carried out coordinated liquidity injections in mid-December. The survey found seven out of 10 financial service companies thought it would take more than six months for normal market conditions to resume while many firms believed there was a high chance of a further deterioration in financial market conditions over the next half year. "The financial services industry is concerned about the lasting implications of the credit squeeze and how long these ripple effects will be felt," said Andrew Gray, banking partner at PricewaterhouseCoopers. Banks and building societies were hit by higher borrowing costs and a sharp decline in income from net interest, trading and investment. The survey also noted a recordlevel of concern among banks that further business expansion could be curbed by an inability to raise funds. However, the survey also showed a balance of 6% of financial companies saw profits grow in the latest quarter while the value of non-performing loans held was unchanged. New jobs also continued to be created and more companies planned capital investment increases than three months earlier. Moreover, while business volumes with private individuals and between financial institutions declined, lending to companies held up. That contrasts with last week's Bank of England financial quarterly credit conditions survey, which showed a tightening in lending conditions for companies. Overall, the survey showed considerable divergence in performance across the financial service industry, although there was near uniform pessimism looking ahead. Banks, building societies and securities traders were among the hardest hit, but general insurance companies saw their profitability grow strongly, while fund managers reported "robust growth" in business volumes, fees and commissions, the report said. Meanwhile, Monday's Lloyds TSB Corporate Markets Barometer showed pessimism is more widespread than the financial service sector. According to the survey of more than 200 firms, the percentage feeling pessimistic about the economy soared to 51% from 28%, which matches the worst ever survey outcome in December 2002. "There has been a steady trend towards economic pessimism during the last four months, but firms became far more cynical in December," said Trevor Williams, chief economist at Lloyds TSB. "This would indicate the U.K. is set for a period of below trend growth." The surveys come amid a raft of data signaling a sharp decline in business and consumer sentiment amid tightening in credit markets. Next week, the Bank of England Monetary Policy Committee meets to decide whether to lower interest rate for the second month running. The rate currently stands at 5.50%. A Dow Jones Newswires survey found 15 of 18 economists believed the bank will not ease again this month, although many expect another rate cut soon. -By Laurence Norman and Joe Parkinson, Dow Jones Newswires; 44 (0)207-842-9270; laurence.norman@dowjones.com (END) Dow Jones Newswires January 06, 2008 19:01 ET (00:01 GMT) Copyright 2008 Dow Jones & Company, Inc.