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Mervyn King

The King speech

Today is the last inflation report for Mervyn King, Governor of the Bank of England. He has served the bank for many years and has been the key figure at the bank for the past eight years.

King’s abdication (retirement) is a time to reflect on his achievements at the top. A keen football fan who happily uses soccer analogies, King would probably recognise his time as Governor has been a game of…

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The Bank: Inside the Bank of England: the 10 competition winners are…

The answer was the Bank of England’s Inflation Report cost £4 when it was first published in 1993, and now costs £3, deflation of 25%.

Congratulations to the ten winners picked randomly:

  1. Tim Cockram – Chetwood Wealth Management
  2. Simon Bird  – Brewin  Dolphin
  3. Alex Brandreth – Brown Shipley
  4. Robert Harper – Brewin Dolphin
  5. Ali Treharne –  SFP Plymouth
  6. Mark Dobson – Charles Stanley
  7. R Knight – from A…

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The Bank: Inside the Bank of England by Dan Conaghan. Thoughts and a competition.

I’ve just finished reading Dan Conaghan’s newly published book The Bank: Inside the Bank of England.  It’s very good – and essential reading for all bond geeks.  We met with Dan a couple of weeks ago (he’s coming in for a lunch with a few clients next week) to talk through some of the themes in the book.  First of all it’s a big surprise just how little has been written about the Bank of Englan…

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B(l)ank cheques

Rating agency Moody’s today downgraded a swathe of UK banks. The reasoning behind this was not the weakening of the economy, nor the fact that, according to Mervyn King, we are in possibly the worst financial crisis ever. It was due to the changing nature of the blank cheque that banks receive from their implicit support from the state.

The rating agencies have recognised that government policy…

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UK inflation falls, but potentially worrying signs

The good news was that UK CPI fell from 3.2% to 3.1%.  The less good news was that this was 0.1% higher than expectations and remains above the 3.0% upper bound (inflation hasn’t been below 3% since December last year).  The worrying news was that the Core CPI measure, which excludes food, alcohol, tobacco and energy prices, jumped 0.2% to 3.1%, and was 0.3% above expectations. Core inflation s…

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Dear George…

Mervyn King introduced himself to George Osborne last night by writing him a letter, not to wish him luck in his new and frankly unenviable role, nor to advise him on just how much austerity is needed on 22nd June to keep the markets supportive of gilts, but instead to explain why he has again overseen a rate of inflation of more than 1% above the target rate of 2%. The letter states that the G…

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Gordon Brown – a bit less keen on an independent Bank of England

At a time when the gilt market is desperately interested in the future of Quantitative Easing, the Prime Minister yesterday sent a shot across the bows of the Bank of England’s MPC by saying that ending QE would put the UK into a “very deep recession”.  Whilst his words were, on the face of it, aimed at the Conservative Party’s perceived reputation as Great Depression puritans who would remove …

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Mervyn loses his Talons

The Minutes from the Bank of England’s Monetary Policy Committee meeting of two weeks ago were released earlier today. They show that the motion to increase the Quantitative Easing program by £50bn was carried with a vote of six to three. Interestingly, Governor Mervyn King was one of the dissenters. Not too long ago one would have assumed that this would have been due to him worrying that infl…

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Save the banks, save 5130 lives

Our banking analyst pointed out this academic paper to us. The joint work by the Universities of Cambridge and California shows that banking crises cause a significant increase in deaths from heart disease. In developed countries the increase is 6.4%, and for poor countries 26.0%. The authors estimate that a severe UK banking crisis would result in up to an additional 5130 deaths. It concludes … Read the article

The Beautiful (expensive) Game

With all eyes on tomorrow’s inflation data (will Mervyn be forced to write a somewhat embarrassing letter explaining why inflation has breached its upper target ?) a report from the Virgin Money Group show football fans are suffering more than most. The Football Fans Price Index shows that the cost of attending games has risen 8.3% in the last three months and a whopping 17.1% in the last twelv…

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