UK Inflation Rate

sevenhills

Thrugelmir wrote: »

What's the connection between QE and bank profitability?

The Bank of England creates new money to buy government bonds, or gilts, from banks. It is hoped they will invest the cash they get in other assets like corporate debt, lowering long-term interest rates ('gilt yields'), boosting business borrowing and getting the economy moving again.

QE also pushes up asset prices and boosts the stock market, by diverting new funds into equities, thereby creating a 'wealth effect' that cascades through the economy – or so the Bank hopes.

Read more: http://www.thisismoney.co.uk/money/news/article-2169137/Quantitative-easing-does-just-boost-bank-profits-alternatives-QE.html#ixzz4iCpAOUFf
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Thrugelmir

sevenhills wrote: »

The Bank of England creates new money to buy government bonds, or gilts, from banks. It is hoped they will invest the cash they get in other assets like corporate debt, lowering long-term interest rates ('gilt yields'), boosting business borrowing and getting the economy moving again.

QE also pushes up asset prices and boosts the stock market, by diverting new funds into equities, thereby creating a 'wealth effect' that cascades through the economy – or so the Bank hopes.

I'm aware of that. I'm interested in the connection with bank profitability? RBS hasn't made a profit in 10 years for example.

michaels

Thrugelmir wrote: »

I'm aware of that. I'm interested in the connection with bank profitability? RBS hasn't made a profit in 10 years for example.

Well I guess you could argue that by stopping the economy from going tits up it kept borrowers in business and thus avoided bad debts which are losses to the bank. Fairly indirect though.....

michaels

antrobus wrote: »

No, the actual answer would be "practically everything".

See here.

Taxpayer support for UK banks: FAQs
https://www.nao.org.uk/highlights/taxpayer-support-for-uk-banks-faqs/

Click on the question 'Which banks received support from the UK government?' and you will see that 'peak support' for the banks was £1,116 bn; the amount outsanding at 31 March 2016 was £85 bn. It will be even less now.

Please check your facts before posting. Don't make things up.:)

And you are ignoring income from the banking levy, it is unlikely that banks would be taxed more highly than other companies had it not been for the gfc.

worldtraveller

Inflation, as measured by the Office for National Statistics' Consumer Prices Index (CPI), rose to 2.9% in May - up from 2.7% in April.

Main points

• The Consumer Prices Index including owner occupiers’ housing costs (CPIH, not a National Statistic) 12-month inflation rate was 2.7% in May 2017, up from 2.6% in April.

• The rate has been steadily increasing following a period of relatively low inflation in 2015 and is at its highest since April 2012.

• Rising prices for recreational and cultural goods and services (particularly games, toys and hobbies) was the main contributor to the increase in the rate.

• There were smaller upward contributions from increased electricity and food prices.

• These upward contributions were partially offset by falls in motor fuel prices, and air and sea fares, the latter two influenced by the timing of Easter in April this year.

• The Consumer Prices Index (CPI) 12-month rate was 2.9% in May 2017, up from 2.7% in April.

ONS

gfplux

Thank you world traveller for the update.

mayonnaise

inflating away personal and national debt is economically beneficial to the uk.

BobQ

Thrugelmir wrote: »

You cannot summise on what may or may not have happened. The only fact that matters historically is that Brown got it wrong. Despite claims for prudence along with abolishing boom and bust. The UK economy was left in a dire state. The years of economic prosperity being a mirage. Fuelled by debt and low interest rates.

True, but who said:

"The City is a great example of using our advantages.The City of London is a great UK success story. It’s the biggest international financial centre on earth.
The London foreign exchange market is the largest in the world, with an average daily turnover of $504 billion. That’s more than New York and Tokyo combined.
Far from being based on the old school tie, it is supremely meritocratic. It is also highly innovative. You cannot simply set in stone a tax or regulatory regime for the City as it is today because it’s always changing, adapting and mutating.
The lessons from the City are clear. Low tax. Low regulation. Meritocracy. Openness. Innovation. These are the keys to success. "

You probably know but it was in 2006 and he was not a Labour supporter.

Thrugelmir

BobQ wrote: »

True, but who said:

"The City is a great example of using our advantages.The City of London is a great UK success story. It’s the biggest international financial centre on earth.
The London foreign exchange market is the largest in the world, with an average daily turnover of $504 billion. That’s more than New York and Tokyo combined.
Far from being based on the old school tie, it is supremely meritocratic. It is also highly innovative. You cannot simply set in stone a tax or regulatory regime for the City as it is today because it’s always changing, adapting and mutating.
The lessons from the City are clear. Low tax. Low regulation. Meritocracy. Openness. Innovation. These are the keys to success. "

You probably know but it was in 2006 and he was not a Labour supporter.

Blair and Brown had already fallen out by 2005 over Brown's welfare spending plans. Wasn't just the regulation of the banks. Brown made serious misjudgements.

BobQ

BobQ wrote: »

True, but who said:

"The City is a great example of using our advantages.The City of London is a great UK success story. It’s the biggest international financial centre on earth.
The London foreign exchange market is the largest in the world, with an average daily turnover of $504 billion. That’s more than New York and Tokyo combined.
Far from being based on the old school tie, it is supremely meritocratic. It is also highly innovative. You cannot simply set in stone a tax or regulatory regime for the City as it is today because it’s always changing, adapting and mutating.
The lessons from the City are clear. Low tax. Low regulation. Meritocracy. Openness. Innovation. These are the keys to success. "

You probably know but it was in 2006 and he was not a Labour supporter.

This was David Cameron advocating low regulation.

I am not saying Blair and Brown did not make mistakes, only that the culture of low regulation of financial industry was supported by both main parties. People forget that Osborne and Cameron were all for low regulation until the GFC.

Also people kept voting for the candy.

Indeed the 2005 Tory Manifesto said "We will set regulatory budgets for each department, capping and then cutting the cost of the regulations that they can introduce in any one year. All new regulation will have to have benefits exceeding costs, and
regulations will be given ‘Sunset Reviews’ to check that this remains the case. A Conservative Government will end the elaboration or ‘goldplating’ of EU directives.

Less regulation was seen as virture......