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The City View: Bank of England hike rates once more

2 1 0
05.05.2022

Today Andy Silvester talks to Jack Barnett, City A.M.’s Economics and Markets reporter. Together they go through the thinking behind the Bank of England’s 25 basis point rate rise earlier today, which brought the UK’s interest rate to 1%. They take a look at the Bank’s forecasts, and explain why a recession is almost inevitable.

And in other news — Shell and BP have announced bumper Q1 profits, and Elon Musk has lined up investors to help with his purchase of Twitter.

Episode transcript (auto-generated)

Andy Silvester 0:08 Good afternoon and welcome to the City View podcast on a fairly momentous day in the city, thanks to the Bank of England are hiking rates by 0.25 basis points this afternoon. Ascending, the interest rates are 1% highest for 13 years, although obviously historically low at at any kind of historic standard, and other corporate news around about some on the side of the Atlantic, some on the other side shell joining BP and announcing bumper first quarter profits. Shell made 7.3 billion in the first three months of the year. That’s nearly triple what it announced last year. Of course, that’s driven by extremely high energy prices right now across the world as well as demand still being significantly high. We haven’t yet seen that demand destruction. And on the other side of the pond, Elon Musk finally putting some meat on the bones of his Twitter purchase as he lined up investors to help with the purchase of Twitter around 5 billion pounds worth of commitments, biggest one made by Oracle’s chief as well as Mr. Musk’s friend, and then other bits and pieces around there including investments from Sequoia Capital. And interestingly by Nance the cryptocurrency firm. All of that somewhat pales in comparison to the big economic news of the day. It has to be said Jack Barnett is here with me our economics and markets correspond here it says em, Jack, you are the bank this morning. And just talk us through before we get to the details, talk us through the choreography of what it’s like being a hacker at the bank on decision day

Jack Barnett 1:39 It’s pretty uncomfortable, I think it’s probably it’s probably the word to use. Everyone’s kind of thrown into what can be described as a pen, I think maybe into a room you’re locked away, your phones are taken away from you. And then obviously, you’re given the the crucial document switch ahead of time when they were announced at midday. Everyone then frantically scrambled through the big report and then typically finds out the top line that one of which I’m sure we’re going to touch on in a second. Everyone in France with the rights that their stories and and at midday, the countdown comes down and given access to the to the Wi Fi and and everyone publishes their story. Then we all turn it up to the conference room. We listen to the governor deliver his remarks. And then each respective journalist has given in turn to grill the governor. So it’s quite a it’s there’s a lot of pageantry to the day. But nonetheless, it’s obviously a very, it’s an important event but only comes around every quarter as well. So…

Andy Silvester 2:39 Indeed, all........

© City A.M.


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