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TAKING ON THE CANDY SHOPS... LAURA MCGUIRE THE BOSS of Westminster City Council has called for “greater transparency” about who operates businesses in the city, as he looks to crack down on the illicit American Candy stores which have seen Oxford Street branded a “national embarrassment”. In a council meeting last night, Cllr Adam Hug revealed that he was looking to ramp up engagement with HMRC and the National Crime Agency to bring a halt to 27 stores which operate on the West End and now account for £9m of unpaid business rates.
“Everyone [landlords and government forces] is letting the side down if you let a candy store into your property,” he said, describing their boom as a symptom of a “deeper problem” in the UK economy. Westminster has long called for an end to trade for the candy stores which have become a brutal eyesore in the capital’s most popular shopping district since the pandemic when landlords needed to fill up vacant lots. Marks & Spencer boss Stuart Machin last week slammed the “proliferation of tacky candy stores” which he said had turned Oxford Street into a “national embarrassment”.
POWELL PUMPS IT UP AGAIN
BANKING TURMOIL
Bank runs amplified by social media CHRIS DORRELL
FEDERAL RESERVE BUMPS INTEREST RATES 25 BPS IN WHAT MAY BE ITS FINAL HIKE
JACK BARNETT THE US Federal Reserve last night hiked interest rates for the tenth time in a row in what may be the world’s most influential central bank’s final increase. Chair Jerome Powell and the rest of the federal open market committee (FOMC) sent borrowing costs up 25 basis points to a range of five and 5.25 per cent. The move was widely expected by markets, but speculation had grown recently over the Fed pausing its rate hike cycle at this meeting or the next to avoid igniting further banking failures by piling more pressure on the US financial system.
The Fed seemed to justify those bets, opening the door to pausing interest rate rises at its next meeting by dropping wording in an older FOMC statement that signalled it anticipated further hikes would be needed to tackle inflation. “In determining the extent to which additional policy firming may be appropriate to return inflation to two per cent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation,” yesterday’s statement read, a more dovish tone than its previous meeting statement.
At a press conference after the rate announcement, Powell described the language shift as a “meaningful change”. “The Fed’s new policy statement provides the clearest hint yet that the 25 basis point rate hike today is likely to be the last,” Andrew Hunter, deputy chief US economist at consultancy Capital Economics, said. Collectively, Powell and co have raised US borrowing costs 500 basis points in a little over a year, the quickest and steepest increase in rates since former Fed Chair Paul Volcker led the charge against inflation in the 1980s. US inflation has been on a downward
trend since the summer, falling from a peak of just over nine per cent to five per cent. The FOMC also moved to calm market fears about the strength of the US banking system, stressing it is “sound and resilient” despite the recent collapses of First Republic and Silicon Valley Bank. The Fed’s move could set the tone for other central banks, with the Bank of England (BoE) and European Central Bank also thought to be nearing the end of their hiking cycles. BoE officials are tipped to raise rates 25 basis points next Thursday to 4.5 per cent, in what some economists reckon could be their final hike.
SOCIAL media and new technologies have the power to “turbocharge” bank runs, former Barclays boss Antony Jenkins (pictured) has said, commenting on the collapse of Silicon Valley Bank (SVB). Speaking to City A.M., Jenkins said “technology is a wonderful thing” that has drastically improved the experience for financial services customers in many different ways. But while these advances have been positive, Jenkins, who left the lender in 2015, noted they have also increased “the ability to move money at speed”. “When you put those things together, what we’ve seen is that the traditional bank run… just gets turbocharged,” he said. His comments follow the collapse of SVB in March, when $42bn was pulled from the bank in a single day – the largest bank run in history. Regulators are now considering how to adapt regulations to face the new reality. CONTINUED ON P2
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