Rush to hike interest rates: Mortgage lenders and other borrowers should brace for shock, says ALEX BRUMMER

Markets typically don’t rely on interest rate leadership from Sweden’s Riksbank, even though it has a legacy older than the Bank of England.

The full percentage point rise to 1.75 percent, as Stockholm struggles with 9 percent inflation, reflects a tighter approach to monetary policy in the G20.

The Riksbank’s intervention comes amid political uncertainty as a coalition government is formed, which includes the far-right Sweden Democrats.

Fighting inflation: The Bank of England’s monetary policy committee, which sets interest rates, may feel the need to go bolder than the half-point hike many had predicted

Sweden’s new administration plans to cut taxes. He shares this with Liz Truss, who makes it clear that when it comes to taxation in the UK, everything is considered.

We already know that the rise in national insurance will be extended alongside the rise in corporation tax next year.

When Truss was Chief Secretary to the Treasury under Philip Hammond, her radical instincts were suppressed by the Mandarins. Now she takes revenge.

Among the consequences of the loosening of fiscal policy is that monetary policy must take on more tightening. In the US, the Federal Reserve is expected to raise the key federal funds rate by at least 0.75 percentage point from the current 2.25 percent to 2.5 percent today. There are currently some market predictions that US rates could rise to 4.5 percent by early next year.

Britain is far from an island when it comes to global finance. The Bank of England does not seek to manage the exchange rate.

But at 1985 lows against the dollar, it would be surprising if he wasn’t paying attention.

The Bank’s monetary policy committee, which sets interest rates, will – if the practice continues – be informed by non-voting representatives of the Ministry of Finance about the direction of the future mini-budget.

A £140bn bailout package to pay electricity bills will have a big impact on consumer prices, reducing them by 4-5 per cent.

Abolishing the National Insurance Supplement will also reduce pressure on the cost of living.

However, with borrowing and arrears rising, the Bank, which was so timid at the start of the new inflationary spiral, may well feel the need to go bolder than the half-point increase many had predicted. Five-year and two-year UK government bond yields are rising.

Mortgage and other borrowers should prepare for a shock.

Sports life

The Changing of the Guard at the Frasers looks pretty much unchanged.

Mike Ashley will still own a 69 per cent stake in the company he founded, called Sports Direct, and will no doubt enjoy the occasional pint with his son-in-law Michael Murray, who now holds the tiller.

Ashley’s departure will be seen by critics as a good moment. His freeloading management clashed with managers and the treatment of some colleagues at the Shirebrook warehouse in Derbyshire was disgraceful.

But one cannot help but admire his entrepreneurship. He was the buyer of last resort on the High Street, snapping up franchises and brands from Evans Cycles to House of Fraser that might otherwise have died.

He has also never been afraid to invest in his suppliers and has at various times held stakes in Adidas and most recently Hugo Boss. Its no-frills retail model may have upset some sensibilities.

The conversion of the ground floor of the fancy Lillywhites sports center into a cheap center for T-shirts and tracksuits was seen as sacrilegious.

But in an era when so many High Street businesses have perished in the clutches of business rates and online competitors, it has survived. Indeed, Frasers, with its deep discounting, is well suited to an era of squeezed incomes.

If he really disappeared over the horizon, he could be missed.

Creative tension

Channel 4’s ownership structure and business model have always been interesting.

Technically owned by the government, its revenue comes mainly from advertising and the sale of programs commissioned by independent producers.

The less-than-kind coverage of Tory politics in news and documentaries made him an easy target for Boris Johnson’s government.

The actual sales process undertaken by JP Morgan may prove to be more work than it’s worth in the current uncertain markets. The likelihood of C4 ending up in the hands of ITV or a foreign buyer.

This would not be the best outcome for Britain’s creative industries.


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