Welcome to Peston’s Picks - the home of my reports and analysis of the issues in business that matter to us all
5 hours ago
Antonio Horta-Osorio, the chief executive of Lloyds who took a leave of absence from the bank because of exhaustion, wishes to return to work, I am reliably informed.
However he is in effect having to re-apply for his job, because the board of Lloyds needs to be reassured that he won't again become incapable of working.
7 hours ago
I can't move at the moment without someone bending my ear about the vulnerabilities of the eurozone's central banking payments system, TARGET2.
It hasn't quite got to the stage where the driver on the W3 bus won't let me on without a lecture about how the German Bundesbank - in spite of protestations that it would never do this - has found itself in effect financing the massive debts of Greece, Italy, Portugal and so on.
08:47 UK time, Wednesday, 7 December 2011
When the Treasury said yesterday it was consulting on how to force the disclosure of bumper pay awards by banks with large UK operations, this was hailed as some kind of surprise.
In fact, if there was a surprise, it would be why the launch of the consultation has taken so long - since the Treasury promised to do this back in early February, when it reached its Project Merlin deal with the UK's biggest banks on lending to business.
23:40 UK time, Monday, 5 December 2011
The reasons given by Standard and Poor's for warning that it may downgrade the credit ratings of all but one of the eurozone's member governments - the exception being Greece, which already has an exceptionally low junk rating - are in a sense uncontroversial.
As the leading ratings agency points out, eurozone banks have been struggling to borrow, a number of eurozone economies are buckling under the burden of big government and household debts, there is a significant risk of recession, there is a bitter dispute between eurozone leaders about how best to help governments finding it hard to obtain loans, and investors are in general increasingly wary of lending to the eurozone's public sector.
19:46 UK time, Monday, 5 December 2011
The cost for Italy and Spain of borrowing fell sharply today.
The implied interest rate on 10-year loans to the Italian government fell more than half a percentage point - a remarkable drop - to less than 6%. Which is well below the 7% danger zone for the first time in six weeks.
08:22 UK time, Monday, 5 December 2011
One of the more counter-intuitive predictions in the Office for Budget Responsibility's recent forecasts for the British economy was that the government would borrow £112bn more in the coming five years than it expected in March, but would shell out £22.2bn less than anticipated in interest payments.
Or to put it another way, the OBR assumed that although the UK's public finances were deteriorating, so that that the national debt will be just shy of £1.5 trillion pounds in less than five years, investors would remain unprecedentedly keen to lend to the British Treasury.
17:20 UK time, Sunday, 4 December 2011
What did the deputy prime minister mean when he told the BBC that the government is about to "get tough" on companies that award pay rises to bosses that are deemed to be excessive?
Well, Business Secretary Vince Cable's department is looking at three ideas:
08:52 UK time, Thursday, 1 December 2011
The idea that China could be decoupled from the woes in the eurozone, a huge market for its stuff, has been blown up.
The latest official survey of Chinese purchasing managers showed that manufacturing in the world's second biggest and strongest economy is contracting - the worst performance since the tail-end of the last recession in 2009.
16:31 UK time, Wednesday, 30 November 2011
The central banks of the world's biggest developed economies have taken pre-emptive action, to prevent a domino effect of banks collapsing in the event that they find themselves unable to borrow the major currencies they need.
In recent weeks, there has been evidence that major eurozone banks have found it increasingly difficult and expensive to borrow dollars, as huge US money-market funds have become wary of lending to them - because of the widespread perception that the eurozone could be moving from crisis to meltdown.
08:40 UK time, Wednesday, 30 November 2011
The Office of Budget Responsibility's gloomy forecasts of lacklustre economic growth, living standards squeezed more than at any time since the 1930s and rising government debt could - it admits - turn out to be optimistic.
How so? Well, those forecasts assume (in its own words) that "the euro area finds a way through the current crisis and that [eurozone] policymakers eventually find a solution that delivers debt sustainability."
17:04 UK time, Tuesday, 29 November 2011
Italy has reached a moment of truth.
The 7.89% interest the Italian government had to pay this morning to borrow 3.5bn euros for three years, and the 7.56% interest that investors demanded when lending to Italy for 10 years: well, those rates would be completely unaffordable if applied to all 1.9tn euros of its public-sector debts.
08:43 UK time, Tuesday, 29 November 2011
The scale of the downward revisions to Britain's growth prospects and of upward revisions to government deficit forecasts are plainly going to overshadow everything else that emanates from today's Autumn Statement.
But in the course of the day, as you peer through the economic gloom, you may be able to make out some luminescent red ovals - which will be the faces of British bankers incandescent with fury.
19:31 UK time, Monday, 28 November 2011
Many would say that the UK's main structural economic flaw is that year after year we consume more than we earn - which in turn explains why our collective indebtedness has been rising year after year, to dangerous levels (and please read UK's debts biggest in the world).
That is why the government is trying to reorient the economy towards investment and exports.
09:00 UK time, Monday, 28 November 2011
If it's a Monday in late November, it must be another messy day in the eurozone.
In Asia overnight, shares bounced on reports and rumours that reforms to limit the ability of eurozone members to indulge in spending and borrowing binges are being fast-tracked, and that a 600bn euros IMF bailout of Italy is close at hand.
10:48 UK time, Sunday, 27 November 2011
Too-clever banking may have played a role in getting us into the economic and financial mess we're in.
But the Treasury hopes that a bit of financial engineering of its own will help to get us out.
10:29 UK time, Friday, 25 November 2011
I've got some good news, and some bad news.
The good news is that if we get through 2012 without the financial collapse of a big bank or a eurozone government, our economy will probably muddle through, flatlining rather than falling back into acute recession.
08:54 UK time, Wednesday, 23 November 2011
Has concern about whether eurozone governments can repay their debts elevated fears about the health of eurozone banks?
You would expect that to happen, given the way that banks both provide financial support to governments and are supported by them (as I discussed yesterday).
08:30 UK time, Tuesday, 22 November 2011
A newish narrative for why the eurozone faces a stark choice between break-up and transforming itself into a federal super-state has been given by the chairman of the Financial Services Authority, Lord Turner.
The analysis in the speech he gave last night in Frankfurt, "Debt and deleveraging, long-term and short-term challenges", also implies that - on the basis of the eurozone's current rules and structure - it is rational for investors to charge more for lending to any eurozone government (even Germany's) than to governments such as those of the US or UK which have their own respective currencies and central banks.
19:17 UK time, Monday, 21 November 2011
At the beginning of 2010, I highlighted a fascinating analysis by the consultants McKinsey called Debt and Deleveraging, which showed quite how indebted the economies of the developed west had become.
McKinsey said that the UK had by 2008 become the most indebted of all the big, rich economies, more indebted even than debt-engulfed Japan.
09:22 UK time, Friday, 18 November 2011
The implicit interest rate that investors charge for lending to Spain for ten years - what's known as the yield on the benchmark ten-year bonds - has in the past 24 hours exceeded what they demand of Italy, and is now more or less the same.
Or to put it another way, investors are now a little more anxious about lending to Spain than to Italy.
Robert has won numerous awards for his journalism, including Journalist of the Year, Specialist Journalist of the Year and Scoop of the Year (twice) from the Royal Television Society, Performer of the Year from the Broadcasting Press Guild, and Broadcaster of the Year and Journalist of the Year from the Wincott Foundation.
Prior to joining the BBC, he was political editor and financial editor of the Financial Times, City Editor of the Sunday Telegraph and a columnist for the New Statesman and Sunday Times.
He broadcast and published a series of influential reports about the causes and consequences of the global financial crisis.
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