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UK powers away from recession JACK BARNETT
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GLOBAL BANK STOCKS GO GREEN AS INVESTORS BEGIN TO FEEL HOPEFUL CHRISTOPHER DORRELL GLOBAL bank stocks continued to recover yesterday after US Treasury Secretary Janet Yellen said the government was prepared to protect regional US lenders if necessary. Referring to the Federal Deposit Insurance Corporation’s recent intervention to guarantee all deposits at Silicon Valley Bank, Yellen yesterday said: “Our intervention was necessary to
protect the broader US banking system. And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.” Investors around the world seemed to breathe a collective sigh of relief, with bank stocks in the UK, US and Europe all finishing in the green. In the UK, Lloyds, Natwest, Barclays and Standard Chartered all closed up around the five per cent mark, while HSBC also gained two per cent.
Meanwhile in Europe, BNP Paribas rose 4.15 per cent and Deutsche Bank was up 6.05 per cent. The European wide Stoxx 600 banking index was up 3.79 per cent. UBS climbed an encouraging 12.12 per cent, despite its outlook being downgraded to negative by both S&P and Moody’s over the last couple of days. “UBS’s takeover of Credit Suisse has blunted the risk of a Lehman-style event engulfing European banks, and though contagion fears continue to drag on
confidence, the focus is gradually returning to fundamentals, which we think are strong across the sector,” Philip Richards, a senior analyst at Bloomberg Intelligence, said. Across the pond, the picture was equally hopeful, with Citigroup, JP Morgan and Goldman Sachs all gaining over two per cent. £ BANK AND FED SET TO HIKE RATES DESPITE WEEK OF MARKET UNREST: P3
NEARLY every sector of the UK economy is powering away from a recession that was muchtipped at the turn of the year, a new survey out today shows. Some 11 of the 14 sectors monitored by Lloyds Bank are producing more than they did a month ago, the highest number in nearly a year. The figures crystalise opinion switching from Britain slipping into a long recession to the economy holding up reasonably well. Last week, the country’s official forecaster canned its recession forecast, but said the economy is still on track to shrink 0.2 per cent this year. At the turn of the year, experts including the Bank of England and International Monetary Fund were warning the UK was on track for a much tougher slump. However, stronger than expected consumer spending, alongside measures taken by Chancellor Jeremy Hunt to boost business investment with tax reliefs, is expected to drag economic growth away from those dire forecasts.
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