Stimulating news. At the second time of asking, the Bank of England has launched a massive stimulus package, unprecedented except for once during the global financial crisis. Describing it as ‘an exceptional package of measures’ Mark Carney announced: (a) a cut in interest rates to 0.25%, (b) £60bn of gilt purchases, (c) £10bn of corporate bond purchases and (d) a £100bn ‘Term Funding Scheme’ for banks designed to encourage lending. This is a planned series of measures clearly aimed at provoking growth, whilst cognisant of the risk of inflation. Job done – over to you Philip Hammond.
Emerald exports. Northern Ireland voted to remain within the EU, and for a part of the Union now faced with the reinstatement of border controls, this was understandable. Despite soothing words from Theresa May and Enda Kenny, the prospect of a ‘hard border’ between Northern Ireland and The Republic of Ireland seems inevitable, which could be politically unsettling. Meanwhile, exports from Ireland to the UK (its biggest export market) are faltering as the weak pound reduces margins. In spite of this S&P published a view this week that house price growth in the Republic would continue its strong recovery.
Tracking deals. Our deal tracker shows continued progression on closing for those investments being marketed pre-referendum. Three weeks following the vote, 4% of such opportunities had completed, with the figure now rising to 13%. The average discount to offer price was just 2%. There has been little change in the percentage of transactions confirmed as not proceeding.
Christmas every day. With only 141 shopping days to go until Christmas, and the UK’s tourism industry booming, Selfridges opened its Christmas Shop last week. The North Pole sits outside both the Schengen Area, and the EU, and so has been able to impose strict border controls; choosing for instance to limit the height of its immigrant workers. It seemingly also avoids application of the Common External Tariff when exporting goods into the EU. However, playing down the prospect of a precedent being set for the UK’s new treaty, a white-bearded spokesman confirmed that trading with the EU is limited to a single day each year.