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Post-LIBOR Settle Update


CHF LIBOR - 08/12/2021


JPY LIBOR - 08/12/2021

MNI (London)
By David Robinson
     LONDON (MNI) - UK Chancellor of the Exchequer Philip Hammond said Wednesday
that he would prefer that the next Bank of England Governor serves a full eight
year term but that he was prepared to consider a shorter appointment for an
exceptional candidate.
     Current Governor Mark Carney's eight year term runs until 30 June 2021 but
he has chosen not to serve the full term and he is set to leave on 31 January
2020. Hammond announced earlier in the day that the open recruitment to appoint
Carney's replacement was now underway.
     The following are key points from Hammond's evidence session to the
Treasury Select Committee:
     -Hammond made it clear that Carney's successor would be an established
figure. He said that it was very important that "we have someone who commands
respect in the international arena." While he wanted the new governor to serve
for eight years he noted that Carney had negotiated special terms when he was
appointed and he left the door open for his successor to do  the same.
     -He noted that it was clear Brexit uncertainty was hampering business
investment. "It is definitely the case that business investment is significantly
below where we would expect it to be at this stage of the cycle," Hammond said.
Both the anecdotal evidence given to the Treasury and the reports of BOE agents
supported the view that business were holding back on investment because of
Brexit, Hammond said, while calling on lawmakers to resolve the Brexit impasse.
"The sooner we can resolve this by giving citizens and businesses clarity, the
better," he said.
     -Hammond made clear that the UK fiscal rules are set to be changed yet
again. The Institute for Fiscal Studies has noted that there have been a dozen
different fiscal rules since 1997 and 10 of these have been broken or abandoned.
Hammond's current goals are to achieve a balanced budget by the middle of the
next decade with public sector net debt falling as a share of GDP in 2020-21 and
public sector net borrowing coming in below 2% of GDP in the same fiscal year.
     Hammond said that "pretty soon" the Treasury would need new rules to cover
the period beyond 2021. He said that the finances were on track to meet the
current net debt and balanced budget goals. Figures out Wednesday showed that in
March the budget deficit was 1.2% of GDP.
     -The Chancellor said that his planned three year government spending review
could be delayed if Brexit uncertainty continued. If there was no solution to
Brexit in coming months, with the end October deadline looming, he said that it
would not be appropriate to set out medium term spending plans. If it was
unclear if the UK was going to get a deal with the EU or "crash out with no
deal" Hammond said that fixing spending plans for the next three years "would be
an unwise thing to do."
--MNI London Bureau; tel: +44 203-586-2223; email:
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MNI London Bureau | +44 203-865-3812 |