The Bank of England is consumed with preparing contingency plans for Britain to leave the EU, with staff across its financial stability, monetary policy and regulatory wings ready to calm any turmoil.
In the days leading up to the June 23 poll, the Bank will hold additional auctions of sterling to ensure the banking system has sufficient funds to operate in a potentially chaotic moment.
Three exceptional auctions of cash have already been planned for June 14, 21 and 28. But stuffing the banks full of cash will not prevent foreigners and UK households and companies dumping sterling in the event of a Brexit vote. Continue reading
With the annual Jackson Hole, Wyoming, Economic Policy Symposium approaching this week, economists are expressing nervousness on whether the U.S. Federal Reserve will begin to raise interest rates before inflation sets in. With the U.S. unemployment rate at 6.2 percent in July — more than a full point lower than July 2013 — and private-sector earnings up 2 percent for hourly workers, a handful of Fed officials admit worry is justified, the Wall Street Journal reported Sunday.
“The idea that the Fed might get behind the curve is a powerful one, and that’s certainly been the history of the institution. People are right to worry about that,” St. Louis Fed President James Bullard told the Journal. Continue reading