He Carn’t Believe It
A tightly drawn navy tie and perfectly placed plump poppy could do little to hide the grave concern upon the face of Mark Carney this week, as he announced the first interest rate rise in the UK for ten years. While this news should come of no shock to anybody who has picked up a newspaper over the past two months, the decision appears to have done little to achieve the objectives intended by the Bank of England.
Following the announcement on Thursday, sterling fell 1.4% against the dollar while the FTSE 100 jumped 0.9%, finishing 1.3% up by the close-of-play on Friday. This perhaps highlights the fact that markets have taken this decision as more of a one-off rather than the precursor to further hawkish demonstrations.
It is certainly clear that the unpredictability of UK markets is continuing to baffle the Bank, however, for now, just like Mr Carney’s tie, Monetary policy is only getting tighter.
A Slippery Slope
While it may not have been the best week for certain Saudi Arabian princes, those that have survived the recent anti-corruption purge will have rejoiced at the news of Brent Crude hitting $64 this week, the highest it has been since June 2015.
Mohammad bin Salman, the crown prince of Saudi Arabia, has detained over 20 senior figures, including 11 princes, in an effort to reform the political and economic corruption that has come to define the country in recent years, in a move that has worried not only Manchester City fans but also those concerned about the long-term stability of oil. The continued surge in the price of oil has been fuelled mainly by political uncertainty in Iraq and OPEC’s extension of restricted supply, which has so far forced the price up by nearly $20 since June.
However, with stockpiles remaining historically large and with US oil production near its highest in two years, many expect the current pricing to be unsustainable in current conditions.