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GOVERNOR SAYS UK BANKS ARE ‘ROBUST’ AND MONETARY POLICY COMMITTEE WILL FOCUS ON REDUCING INFLATION JACK BARNETT AND CHRISTOPHER DORRELL ANDREW BAILEY poured cold water on the idea that wobbles in the banking sector should affect the Bank’s decisions on interest rates last night. Speaking at the end of a day in which under-pressure banking stocks on both sides of the Atlantic showed signs of life, Bailey said the UK banking system is “resilient” and “well-placed to support the economy”. “The Monetary Policy Committee can focus on its own important job of returning inflation to target,” he continued, in an apparent rebuke of those who called on the country’s rate-setters not to increase the interest rate last week lest it spook investors in banking stocks. After last week’s 25 basis point rise to 4.25 per cent – a post-financial crisis high – economists had roundly interpreted the rise as the Bank’s last in its
aggressive tightening cycle. However, Bailey signalled the Bank is still “very alert to any signs of persistent inflationary pressures”. “If they become evident, further monetary tightening would be required,” he cautioned.
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The governor said that any future rate rises “will be firmly anchored in the emerging evidence”, hinting the Bank will react to higher than expected inflation figures. Inflation raced to 10.4 per cent last month, above the City and Threadneedle Street’s expectations, and marked the first rise in inflation in several months. Meanwhile, concerns in the banking sector waned yesterday. Deutsche Bank, which slipped significantly last week, began to recover its losses. In the US, embattled First Republic also enjoyed a day firmly in the green. Rupert Thompson, chief economist at Kingswood, said last week’s Deutsche drama was “overdone”. “The banks both in the UK and Europe are in pretty good health, and (now collapsed) Credit Suisse was a special case,” he said. £ CONTINUED ON PAGE 2
JAMES SILVER A PLANNED strike by Heathrow security guards has forced British Airways to pull a number of flights over the crucial Easter weekend. Staff at Terminal 5, BA’s Heathrow hub, will walk out the week before Easter and remain off through the four-day weekend. BA said they “regrettably had to make a small number of adjustments
to our schedule” while the airport said it had brought in contingency plans, though warned passengers it may take a “little longer than usual to get through security”. Around 300 flights have been affected. The airport has been hit by industrial action over recent months, which has itself followed chaotic scenes at the Hounslow hub due to staffing levels failing to keep up with rebounding passenger demand.
Office space: Deutsche’s London base sold off as investors bet big on City market JAMES SILVER A MALAYSIAN property fund has teamed up with London-based Castleforge to buy Deutsche Bank’s current London base in Moorgate for just over a quarter of a billion pounds – in what amounts to a big bet on the capital’s commercial property market.
Castleforge and its Malaysian partner Gamuda plan to refurbish and upgrade the building – which is due to be vacated by the German bank next year – to provide a “bestin-class, top-rated, environmentally sustainable ESG office space catering to... financial institutions, legal firms and mega-tech corporations”. Gamuda said they then plan to
sell the building no later than five years after, having locked in “quality tenants”. The plans include bumping up the building from an existing eight storeys to eleven. Deutsche is leaving the building, which had been owned by an
English property partnership, for a new UK headquarters atop Moorgate station. Last night, Antony Antoniou, chief executive of real estate agency and investment specialists Robert Irving Burns, told City A.M. that
London remained “the ‘go-to’ place to invest” in Europe. “While the office market has not been immune to the wider downturns, there is a real flight to quality in the sector, and those buildings with state of the art sustainable features or capable of being upgraded are most in demand,” he said.
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