The UK economy expanded at a slightly faster pace in the fourth quarter on services and manufacturing output, but the full-year growth was the weakest in five years, preliminary data from the Office for National Statistics showed. GDP grew 0.5% sequentially in the fourth quarter, while the rate was forecast to remain unchanged at 0.4%.
A deeper relationship with Europe will benefit the UK economy, the governor of the Bank of England has argued. Mark Carney's comments follow claims by chancellor Philip Hammond that the UK and EU economies will only move very modestly apart after Brexit.
The anti-money laundering regulations should be updated to include Bitcoin and other virtual currencies, the UK Treasury has said. The Metropolitan Police says criminals are using crypto-currency cash machines to launder money in London.
Britain’s regulators will convert banking and insurance rules inherited from the European Union after Brexit to make them more tailored to the British market, Bank of England Governor Mark Carney said on Wednesday. Carney said Britain had long expressed opposition to the EU’s cap on banker bonuses, the full application of banking capital rules on smaller lenders and the bloc’s insurance capital rules.
European regulators have warned banks working on post-Brexit plans that they will need to have substance locally to serve European clients. The European Central Bank said some of the proposals it has reviewed are inadequate and risk creating empty shells.
The Bank of England has raised interest rates for the first time in a decade to contain an increase in inflation stoked by the Brexit vote, in what is otherwise a moment of high uncertainty for the economy. In a statement Thursday, the bank said it had lifted its benchmark rate, which affects the cost of loans and savings rates in the wider economy, to 0.50% from the record low of 0.25%.
Bank of England is expected to reverse emergency action taken following the Brexit referendum, when it cut rates from 0.5% to 0.25% to avert a recession. While a slump has not materialized, the British economy appears in worse health than most other major countries, with potential to be blown further off course by faltering talks to leave the EU.
The UK's key inflation rate hit its highest for more than five years in September, driven up by increases in transport and food prices. The Consumer Prices Index (CPI) climbed to 3%, a level it last reached in April 2012, and up from 2.9% in August. The pick-up in inflation raises the likelihood of an increase in interest rates - currently 0.25% - next month.
Uncertainty over Theresa May's future as prime minister helped send sterling down nearly 1% against the dollar on Thursday. The pound fell 0.9% against the greenback at $1.3127 and declined 0.45% against the euro to €1.1217. The fall reflected concern about the Conservative Party leadership following Mrs. May speech on Wednesday.
United Kingdom and Europe must agree on a Brexit transition deal by Christmas or risk banks triggering their contingency plans, the Bank of England has warned. Deputy governor Sam Woods said that while the UK is committed to a implementation period, the EU's position is not yet clear.