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Zilch: Reform giving City a listing boost
EXCLUSIVE CHARLIE CONCHIE
POUND SINKS AFTER BAILEY SAYS WE’VE ‘MOVED ON’ FROM RATE RISES – BUT GOVERNOR SAYS HE’S NOT OFFERING FORWARD GUIDANCE AHEAD OF THIS MONTH’S RATES DECISION CHRIS DORRELL THE BANK OF ENGLAND is nearing the end of its monetary-tightening cycle, the Bank’s governor suggested yesterday, adding that there will be a “quite marked” fall in inflation by the end of the year. “There was a period when it was clear rates needed to rise going forwards, and the question for us was how much and over what time frame. We’re not, I think, in that phase anymore,” Andrew Bailey said when he was questioned by MPs yesterday. “We’re much nearer the top of the cycle... on the basis of current evidence,”
he added. His comments prompted the pound to fall to a three-month low, dropping 0.6 per cent to trade below $1.25, as markets bet that the Bank might not lift rates as high as previously thought. Markets are currently pricing in a further two 25 basis point rate hikes, which would see the Bank rate reach a peak of 5.75 per cent. Bailey stressed, however, that his comments should not be taken as an indication for which way he will vote in the upcoming Monetary Policy Committee (MPC) meeting in September. The Bank is growing increasingly confident that rising rates are helping to
tame inflation. Inflation came down to 6.8 per cent in July, having peaked at over 11 per cent last year. While Bailey said August inflation might see a slight rise due to rising fuel prices, he said it would continue falling over the rest of the year. “Many of the indicators are now moving as we would expect them to move and are signalling that the fall in inflation will continue and, as I’ve said a number of times, I think will be quite marked by the end of this year,” he said. However, Bailey said the strength of wage bargaining had surprised the Bank and it will look to see whether pay rise
demands ease off going forward. Swati Dhingra, another member of the MPC, said there were “very promising signs” that inflation is falling. She pointed out that producer price inflation has fallen significantly and that “almost every item” in the consumer price index has turned negative. Although interest rates are likely nearing their peak, the Bank’s rate-setters have increasingly signalled that rates will have to be left higher for longer than markets expect. Bailey said the decision of when to start cutting rates will be “an important judgement”.
BUY-NOW pay-later firm Zilch could shift onto the public markets as soon as next year after a slew of reforms have boosted London’s appeal as a listing destination, the firm’s chief has said. Speaking with City A.M. in a video interview to be published today, Zilch founder Philip Belamant said the fintech outfit was gearing up for a move onto the public markets “in the next year or so” and London had ramped up its appeal after pushing through a major reform agenda in the past two years. “When we think about listing, we think about liquidity, policy and perception. And if you had asked me this question 24 months ago or before that, the answer really was that it would be difficult to see that you would get all those things from the London Stock Exchange,” Belamant said. “But a lot has changed, and we’re really excited to have this dialogue with [London Stock Exchange chief] Julia [Hoggett] and the team. Government is leaning in heavily here in the UK and you’re starting to see a lot of reform happening,” Belamant added. £ CONTINUED ON PAGE 3
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