Pound drops back towards $1.24 after uk jobs data – but dollar index hits 14-year high on inflation expectations

Interest rates will start to rise in coming years as the population ages and the middle-aged savers who dominate the economy start to retire and become spenders, according to Sir Charlie Bean, a former deputy Governor of the Bank of England.

Big demographic changes in recent decades have forced interest rates down, central bankers argue, a position which was pushed to the current extremes by the financial crisis and the slow economic recovery which followed.

But the rich world’s population is now past the peak ratio of middle aged workers to older pensioners, as those savers in their 40s and 50s move into retirement, and start spending their savings.

“It is the middle aged who do most of the saving for retirement, and then you dis-save when you are retired,” he told the UBS European Conference.


“We are now going into a period where the size of the old cohort relative to the savers in middle age will be steadily increasing, and that will put downward pressure on savings at a global level.

“That is one reason why the underlying real interest rate will shift up over time – but this will move slowly, it is not something that will happen in a year or two, we are talking about slow-moving tectonic forces here.”

The British economy probably still needed interest rates to be negative in ‘real’ or inflation-adjusted terms, but the fall in sterling meant the BoE would not necessarily be able to stick to this, Cunliffe said in the text of a speech to be delivered at the University of Manchester.

“The policy rate may need to depart from the natural rate if the policymaker is faced with a shock that creates a trade off – for example between bringing inflation to target and smoothing output volatility,” Cunliffe said.

Brexit is unlikely to lead to a sudden weakening of London’s “gravitational pull” as one of the leading centres for the global capital markets, according to the boss of Barclays.

The vote in June to leave the European Union has sparked fears that the UK will quit the single market and damage the City’s status as a hub for banking and investment.

Jes Staley, the chief executive of Barclays, told a banking conference today that while Brexit would lead to a great deal of uncertainty for the sector, it would not result in the City losing its influence in the capital markets overnight.

“The users of capital find the providers of capital, not the other way around, and the providers of capital, by and large, are resident in London and New York,” Mr Staley told the FT Banking Summit. High profit low cost business ideas “I don’t think London will lose its gravitational pull in terms of management of capital in any reasonable timeframe.”

Mr Staley, a US citizen who spent much of his career at Wall Street giant JPMorgan, said that the election of Donald Trump was likely to result in pressure on the US Federal Reserve to pursue tighter monetary policy.

“You’ll see political pressure on the Fed to be less accommodative,” the Barclays chief predicted, adding that “influence on the Fed is going to be another significant consequence of the presidential election”.

Trump’s plans to cut tax and increase spending is seen as boosting economic activity, but his protectionist policies are seen as driving inflation higher.

Strategists at Amplify Trading pointed out that markets are pricing in 94pc chance of a rate hike next month – but added Trump doesn’t take office until January 2017.

“This means we are in a bit of a state of limbo where news flow regarding what Trump might or might not do as he takes his seat in the Oval office will be the main driver of sentiment rather than any economic measures.”

Adnan Akant, head of foreign exchange at Fischer Francis Trees and Watts, a New York based institutional currency manager owned by BNP Paribas, thinks it probably can.

“Under Trump, we are looking at fiscal policy divergence (with Europe and Japan) which should be very positive for the dollar. Low cost high profit items Protectionism is a risk, but if that is focused on emerging markets, it may perversely also be a dollar positive.”

Mike van Dulken, of Accendo Markets, said: “Equities are nursing small losses as excitement eases about US Trumpflationary policies representing a turning point and looming political risk in Europe attracts fresh attention. Low cost high profit business in india An Italian referendum on constitutional reform could see PM Renzi ousted.

“Austrian elections (third attempt) could see the far-right Freedom Party take power. What products have high profit margins Both take place on 4 Dec and, after Brexit and Trump, could add important populist precedents ahead of 2017 French and German elections given rising popularity for Le Pen’s National Front and the Alternative for Germany party, respectively.”

“Growth is being fuelled by full-time professional jobs while wages are continuing to perform strongly, which underlines the resilience of the UK labour market.

“The measures we have taken have put our economy in a position of strength, and we will work to ensure more people can benefit from these opportunities as we build a country that works for everyone.”

“The claimant count – which in a quirk of the data is a more recent figure than the unemployment rate – jumped by 9,800 in October, with September’s figure revised upwards from 700 to 5,600. Small business with low investment and high profit in india All in all, it does seem likely that unemployment could tick up somewhat during the coming months, though dire predictions made in the immediate aftermath of the vote appear wide of the mark.

“Wage growth held steady at 2.3pc, but it’s probable pay will fall in real terms over the coming year or so. Small business with high profit margin An industry survey released earlier in the week showed employers expect to make pay settlements of 1.1pc at present – well below many predictions for inflation, which the Bank of England forecasts will hit 2.7pc next year.”

Britain’s unemployment rate fell in the first three months after the Brexit vote to its lowest level in 11 years but there were some signs that a slowdown in the labour market could be coming.

Meanwhile, Fiona Cincotta, of City Index, said today’s report is expected to show an increase in October of 2.3k people claiming unemployment benefits, whilst average wage growth in the three months to September is expected to have increased 2.3pc year on year.

“Anything short of these figures could again fuel expectation of further easing by the Bank of England and therefore put renewed downward pressure on sterling, with a decisive break through 1.2400 possibly dragging cable back to 1.2350. Companies with high profit margins

Lukman Otunuga, of FXTM, said investors may direct their attention towards the pending UK labor report which could provide some clarity on how the UK economy is faring in the aftermath of the Brexit vote.

“The number of new claimants for unemployment has been predicted to edge higher in October, and if such becomes a reality then concerns could elevate over the Brexit woes contaminating the UK labor markets. High profit items to resell Another batch of soft domestic economic releases from the UK could be the catalyst bears need to install another heavy round of selling on the GBPUSD during Tuesday’s trading session.”

The news sent Ocado shares tumbling more than 6pc in early trade, to £2.65, amid concerns that Amazon is now making a serious attempt to seize a share of the UK’s online grocery market. Morrisons’ shares rose 0.6pc.

Morrisons already has an online service in partnership with Ocado, which it renegotiated August, extending its coverage nationwide and adding more products.

The Trump transition trade looks to be in reverse, Rebecca O’Keeffe, of Interactive Investor, said this morning, as equities dip into the red.

“As the initial shock wears off, expectations have waned and the huge sector moves seen over the past week are starting to unwind a little. Small business with low investment and high profit Industrial metal prices remain volatile, having potentially overpriced the infrastructure impact and moved too far, too fast. Small business high profit in india Technology companies, which had fallen sharply, are seeing investors move back into the sector. High profit margin Emerging markets are also paring losses from last week, as investors start to rethink some of the early reaction and reality returns to the market.

However, Mike van Dulken, of Accendo Markets, flagged that sentiment remains positively biased towards a Trump presidency, potentially representing a welcome turning point for markets after a decade of stagnation.

Looking back at the action overnight, he said: “Japan’s Nikkei is leading Asian bourses higher thanks to continued Yen weakness derived from USD strength and disposal of the currency as an alternative safe haven to the Gold. High profit service business There is also some fresh excitement surrounding Mario, but from Nintendo not the ECB. Australia’s ASX is flat with Miners held back by the correction in metals offsetting gains in Energy from the Oil rebound.”

China’s yuan weakened to an eight-year low on Wednesday as expectations of higher U.S. Low investment high profit business in delhi interest rates buoyed the dollar, putting Beijing’s commitment to market-oriented reforms in the spotlight as fierce critic Donald Trump prepares to take office.

The yuan has now depreciated 5.4pc against the dollar so far this year, with its descent gathering speed since Trump’s election in the presidential race on Nov. Low cost business ideas with high profit in india 8, which has boosted the greenback against most other global currencies.

Trump has threatened to label China a currency manipulator on his first day in office and has threatened to slap punitive tariffs on Chinese imports.

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