View more on these topics

Editor’s Note: Is a rate cut better than nothing?

Few senior figures have emerged well from the Brexit vote turmoil but Bank of England boss Mark Carney seems to be growing in stature by the day.

The Leave campaign has received heavy criticism for not having a plan in place to deal with Britain’s potential exit from the EU and its economic consequences. Many of the key Brexiters have either run for the hills or been sidelined as the repercussions of the referendum result hit home.

Those on the side of Remain have been able to shrug their shoulders and say ‘We told you so’ as sterling plummets and property funds suspend withdrawals. But that attitude will not help restore confidence in the British economy.

The UK has a vacuum in leadership as we wait to discover whether Theresa May or Andrea Leadsom will get the keys to Number 10.

In the meantime, it feels almost as if Carney is acting prime minister, such is the weight attributed to his every word in this febrile climate. Or perhaps ‘economic babysitter-in-chief’ is a better analogy given the number of toys being chucked out of prams by our elected officials.

It cannot be an easy task for Carney to maintain his composure, particularly after he spent recent months warning that a vote to leave the EU could trigger a recession, alongside job losses, higher costs and a drop in the value of the pound.

He has shown willingness to use all the tools at his disposal to stimulate the market and stave off a downturn, and a cut in interest rate this week is looking increasingly likely.

Financial journalists have written the same news story on the second Thursday of every month for more than seven years, so it will be a break from the normal routine if predictions of a cut prove accurate.

However, Clayton Euro Risk president Tony Ward says a base rate cut would be “a complete waste of time”, further weakening sterling and serving only to import inflationary pressure as it costs the UK more to buy foreign goods and services.

Yet with the country in limbo and a huge burden of responsibility resting on Carney and his MPC colleagues, there is a sense that they have to try something…

Recommended

UK-Great-Britain-Bunting-700x450.jpg

Mortgage market braced for Brexit fallout

Britain’s vote to leave the EU could freeze the housing market in the short term and hit interest rates and house prices in the long term, say industry experts. Last week the UK voted ‘Out’ and Prime Minister David Cameron announced he would resign over the issue. Some believe the immediate outcome of the vote […]

Scissors-Cut-Tailor-Measure-Measurement-700.jpg

Brexit price-cutting could push fixes down to 0.95%

Brexit uncertainty, low swap rates and a possible future base rate drop are causing a wave of price-cutting by mortgage lenders that could push two-year fixed rates as low as 0.95 per cent, say mortgage experts. Several lenders announced lower rates or made other competitive changes following Britain’s vote to leave the European Union last […]

George-Osborne-Tory-Conference-700x450.jpg

Osborne to slash corporation tax to less than 15%

Chancellor George Osborne is to cut corporation tax from 20 per cent to less than 15 per cent in an attempt to win back investors’ business confidence following the Brexit vote. Osborne says Britain must show the world it is “still open for business” and outlined a new five-point plan to build a “super competitive […]

Finance is only one hurdle for small developers

The housebuilding market in its current form simply isn’t working. We are completely over-reliant on the biggest players in the industry – the largest nine are responsible for more than 50 per cent of the new homes built in the UK. But there is a reluctance to do more, particularly in this uncertain post-Brexit world. And with […]

How to use wills to protect your clients’ wishes

March was Free Wills Month! Free Wills Month brings together a group of well-respected charities to offer members of the public aged 55 and over the opportunity to have their simple wills written or updated free of charge by using participating solicitors in selected locations around England and Wales. Research by the Law Society* highlighted that only 64 […]