Central banks remained in the spotlight last week with the Bank of England (BoE) raising UK interest rates for the first time in 10 years, and President Trump unveiling Jerome Powell as the next chair of the Federal Reserve.
The latest Federal Open Market Committee (FOMC) meeting also refreshed expectations of a December rate hike in the US with the latest economic data there also contributing to the likelihood of another step in the path of monetary policy normalisation.
The BoE’s move to raise UK rates was no major surprise, as a hike had been flagged by its governor Mark Carney back in September, with subsequent economic data only validating such expectations. The Bank’s 25 basis point (bps) hike to 0.5 per cent was effectively a reversal of the ‘emergency’ post-Brexit referendum rate cut from last summer, and so represents less of a ‘tightening’ and more of a decision by the Bank to take its foot just slightly off the accelerator.
The rise in UK inflation to 3 per cent, on the back of the post-Brexit referendum slide in sterling, was clearly the catalyst that prompted the BoE to move, but other economic data has also not been as bad as many (including the bank) had feared, allowing it to act without prompting too much alarm among consumers and businesses.
Going forward the BoE was at pains to emphasise the gradual nature of any further tightening saying that after last week’s hike, "inflation is expected to fall back over the next year, and conditioned on the gently rising path of Bank Rate implied by current market yields, to approach the 2 per cent target by the end of the forecast period".
A gradual rise in the Bank Rate to 1 per cent by the end of 2020 is what is implied by market yields, and the BoE apparently sees nothing to argue with this trajectory. So just another 50bps of hikes over the next three years, but probably nothing much more for the time being.
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Read more from Tim Fox:
Equities have outperformed other assets classes in 2017
Uncertainty over the Fed chair's future leaves markets on edge
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This also fits in well with the moderate tightening that is underway across the Atlantic in the US and with the cautious approach being taken by the European Central Bank across the English Channel. Major central banks are proceeding with policy normalisation with the utmost care, preparing markets for any adjustments, however small, a long time in advance so as not to destabilise the recoveries that are underway.
The ECB’s cautious messaging the previous week was a case in point, while last week’s FOMC meeting in the US also delivered a carefully calibrated message. The US Fed left interest rates unchanged within a 1 per cent to 1.25 per cent rate band as widely expected, but the economic outlook was upgraded slightly highlighting that ‘economic activity has been rising at a solid rate despite hurricane-related disruptions’. Near term risks to the outlook were said to be balanced, but the statement was consistent with a December tightening conditional on the economic data remaining favourable.
Economic data released since the Fed meeting served to underline the economy’s ‘solid’ credentials, with October employment growth bouncing back strongly from September’s weaker levels, factory orders increasing and service sector activity hitting a 12-year high.
Choosing a Fed chair, who would not rock the boat, may understandably have been one of the main criteria that president Trump had in mind when he selected Fed governor Jerome Powell to be his nomination for the post.
Mr Powell was very much seen as the continuity candidate, and is expected to maintain Ms Yellen's gradualist approach to monetary policy tightening in 2018 at least, having never dissented from major Fed decisions during his tenure. He is also seen as a moderate when it comes to regulation and will probably have a relatively easy confirmation process being a sitting governor.
However, Mr Powell’s promotion means that there will still be four vacancies on the Fed’s board, including the vice chair position. Thus his management of a relatively newly constituted board will quickly come under scrutiny. This may make it less easy for him to simply execute the policies of his predecessor, and could create challenges that are unexpected. Jerome Powell may have come from relative obscurity to lead the Federal Reserve, but it may well be the other appointees at the Fed that remain to be made that will determine whether he succeeds.
Tim Fox is chief economist and head of research at Emirates NBD
CRICKET%20WORLD%20CUP%20LEAGUE%202
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MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
Company%20Profile
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
COMPANY%20PROFILE
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The specs
Engine: 2.0-litre 4-cyl, 48V hybrid
Transmission: eight-speed automatic
Power: 325bhp
Torque: 450Nm
Price: Dh289,000
AL%20BOOM
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Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
TEACHERS' PAY - WHAT YOU NEED TO KNOW
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
COMPANY%20PROFILE
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SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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EA%20Sports%20FC%2024
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Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Company%20Profile
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COMPANY%20PROFILE%20
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The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
Film: In Syria
Dir: Philippe Van Leeuw
Starring: Hiam Abbass, Diamand Bo Abboud, Mohsen Abbas and Juliette Navis
Verdict: Four stars
SUE%20GRAY'S%20FINDINGS
%3Cp%3E%22Whatever%20the%20initial%20intent%2C%20what%20took%20place%20at%20many%20of%20these%20gatherings%20and%20the%3Cbr%3Eway%20in%20which%20they%20developed%20was%20not%20in%20line%20with%20Covid%20guidance%20at%20the%20time.%3C%2Fp%3E%0A%3Cp%3E%22Many%20of%20these%20events%20should%20not%20have%20been%20allowed%20to%20happen.%20It%20is%20also%20the%20case%20that%20some%20of%20the%3Cbr%3Emore%20junior%20civil%20servants%20believed%20that%20their%20involvement%20in%20some%20of%20these%20events%20was%20permitted%20given%20the%20attendance%20of%20senior%20leaders.%C2%A0%3C%2Fp%3E%0A%3Cp%3E%22The%20senior%20leadership%20at%20the%20centre%2C%20both%20political%20and%20official%2C%20must%20bear%20responsibility%20for%20this%20culture.%C2%A0%3C%2Fp%3E%0A%3Cp%3E%22I%20found%20that%20some%20staff%20had%20witnessed%20or%20been%20subjected%20to%20behaviours%20at%20work%20which%20they%20had%20felt%20concerned%20about%20but%20at%20times%20felt%20unable%20to%20raise%20properly.%3C%2Fp%3E%0A%3Cp%3E%22I%20was%20made%20aware%20of%20multiple%20examples%20of%20a%20lack%20of%20respect%20and%20poor%20treatment%20of%20security%20and%20cleaning%20staff.%20This%20was%20unacceptable.%22%C2%A0%3C%2Fp%3E%0A
The specs: 2019 Aston Martin DBS Superleggera
Price, base: Dh1.2 million
Engine: 5.2-litre twin-turbo V12
Transmission: Eight-speed automatic
Power: 725hp @ 6,500pm
Torque: 900Nm @ 1,800rpm
Fuel economy, combined: 12.3L / 100km (estimate)
The biog
Favourite colour: Brown
Favourite Movie: Resident Evil
Hobbies: Painting, Cooking, Imitating Voices
Favourite food: Pizza
Trivia: Was the voice of three characters in the Emirati animation, Shaabiyat Al Cartoon
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
UAE currency: the story behind the money in your pockets
Napoleon
%3Cp%3E%3Cstrong%3EDirector%3C%2Fstrong%3E%3A%20Ridley%20Scott%3Cbr%3E%3Cstrong%3EStars%3C%2Fstrong%3E%3A%20Joaquin%20Phoenix%2C%20Vanessa%20Kirby%2C%20Tahar%20Rahim%3Cbr%3E%3Cstrong%3ERating%3C%2Fstrong%3E%3A%202%2F5%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
if you go
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Killing of Qassem Suleimani
Company Profile
Company name: Yeepeey
Started: Soft launch in November, 2020
Founders: Sagar Chandiramani, Jatin Sharma and Monish Chandiramani
Based: Dubai
Industry: E-grocery
Initial investment: $150,000
Future plan: Raise $1.5m and enter Saudi Arabia next year
