Bank of England cuts UK growth forecast and warns over no-deal Brexit

The Bank of England has cut its forecasts for UK growth over the next two years and also warned that a no-deal Brexit would hit the economy and trigger a further drop in the value of the pound.

The Bank left interest rates unchanged at 0.75% against a backdrop of weaker global growth and ongoing trade tensions between the US and China.

It said the UK economy was expected to grow by 1.3% this year, down from a previous projection of 1.5% in May.

The Bank also cut its outlook for growth in 2020 to 1.3%, from a previous projection of 1.6%.

The forecasts are based on the assumption that the UK leaves the EU with a Brexit deal – however it suggested growth could be much slower in the event of no deal.

Why has the Bank cut its forecasts?

The Bank’s Monetary Policy Committee (MPC) that sets interest rates said the UK was likely to have stagnated in the three months to June.

Its quarterly Inflation Report predicted only modest growth in the coming months due to ongoing uncertainty over the UK’s future relationship with the European Union.

It said there was a one-in-three chance that the economy will shrink at the start of next year, with global trade tensions also weighing on the UK outlook.

And it said there had been a “material and broad-based slowdown” in world growth since the end of 2017.

How is Brexit affecting business?

The Bank said UK economic growth was “likely to remain subdued over the coming year, with Brexit-related uncertainties weighing on spending to a greater extent than in May”.

Its latest survey of businesses showed that 90% of them had implemented contingency plans ahead of a previous March Brexit deadline.

Three quarters of respondents said they were also “as ready as they can be” for a no-deal scenario.

However, the Bank warned that “material risks of economic disruption remain”.

It noted that 240,000 businesses that currently trade solely with the EU were not ready for sudden EU border inspections in the event of no deal.

Many others did not have the right documents to keep selling to the EU if the UK left the bloc without a deal.

MPs attack government over lack of post-Brexit investment policy

MPs have strongly criticised the government for failing to prepare a policy on international investment agreements ready for Brexit, which the new administration has pledged will happen “come what may” on 31 October.

The International Trade Committee (ITC) said it was “alarmed” that ministers have not set out “even basic lines of policy” on issues such as the degree of regulation there should be on investment from firms that might pose a security risk.

Britain will have to negotiate all of its trade and investment agreements for itself once it leaves the European Union. International investment agreements are treaties that set out the rights of investors and responsibilities of governments.

They have been highly controversial in recent years due to rules on protecting and liberalising investment. For example, the US-EU TTIP deal, which has been put on hold, drew fire for proposing that companies could sue governments for lost profits.

The ITC, which scrutinises the Department for International Trade (DIT), said in a report today that the UK must work out its position on foreign investment “so it is ready to strike deals in the event of a no-deal Brexit”.

A spokesperson for investment managers body the Investment Association said: “The report makes important recommendations on investment protections and we know that it is an issue the government are looking at closely.”

DIT has said it cannot establish a policy on international investment until it has left the EU due to the bloc’s rules. But the report said there is “no credible legal basis for this argument”.

A DIT spokesperson said: “The UK is an incredibly attractive destination for foreign direct investment, as shown by a range of analysis by independent experts.

“As the Prime Minister has said, we are ready for no deal. We are building on the 90 bilateral investment agreements we have already secured with countries across the world.”

The report also argued for a degree of regulation concerning inward investment that risks economic harm or damage to national security, as is alleged by some in the case of Huawei’s potential involvement in the UK’s 5G network.

The Committee’s report says it is important to “balance promotion of inward investment with safeguarding national security”. It recommends the government sets out an “investment screening regime” and picks a minister who will take “the ultimate decision on whether to block an investment”.

How to start investing in forex: A beginner’s guide

You may have heard severally people saying that forex is highly volatile and is a risky investment to get into.

Although, the statement is partly, forex, can only get crazy and very risky if you have not developed some virtues like self-control and very high discipline.

There are people who are making millions of dollars using this type of investment and if you cultivate the discipline needed you can join the club. However, as a newbie, there are some tips to keep in mind if you want to be a forex expert. Here are some of the important tips in the forex world:

1. Understand what is forex

Do you know what really this investment mean? Well, most newbies are just attracted to forex because of the great history they hear successful people giving. However, if you don’t have a thorough knowledge of exactly what forex is you will end up making huge losses and eventually losing your capital.

In simple terms, we can say that forex is the act of exchanging currencies. Basically, you will be dealing with USD, Euros, CAD, JPY, and other popular currencies. The reason why people say that this investment is risky is because of the volatility of currencies.

In understanding forex, you will need to know the factors that will affect your investment and when not to trade with a certain currency. Of course, you can make moneywhen you know the parameters that govern the forex world. Factors like political instability, trade wars, UN meetings, wars, elections, and others can easily affect the forex market. You have to be updated always with the global news and the anticipation of many traders.

2. Understand the terms used here

This will make your life easier when trading. Some of the words you will have over and over again include quote currency, base currency, ask price, bid price, pip, and spread. Bid price refers to the price that your broker is willing to buy the money you are holding. Base currency refers to the currency that you are holding most in US dollars, Euros, Japanese Yen, and others.

Quote Currency refers to the currency that you will purchase. Ask price refers to the price your broker will ask for in exchange to the currency you are holding. Spread is that difference between the bid and ask prices. This is where the broker gets his commission. Pip refers to the percentage in point which is the smallest measurable value of your money.

You can then get informed by reading forex materials. There are various books and online videos that can help you become better in forex as a beginner.

3. Choose a broker

Here you have to be careful about the kind of the broker you choose. There are thousands of brokerage firms out there that will hunt you to win your trust, as usual, there are genuine ones and illegitimate ones that will advertise themselves as the best but in the real sense, they will make your investment go to the drain.

You need a brokerage firm to help you make accurate trades and get some financial services. It is always advisable to conduct thorough research on a certain broker before entrusting them with your trade. Go for a reputable broker who will help you make better profits in your bid price. It is crucial you go for a broker with multiple outlets in their customer services.

4. Have an understanding of the global economy

Forex involves currencies of different countries across the globe. Your profits will be based on your accurate prediction of the global economic movement. You have to understand how to check at the value of your base currency and the quote currency and how to convert them without making a loss. Do some research on the political climate, GDPs, and other factors of the countries in which you want to purchase their currency. This will give you a lead and a direction to follow.

5. Now you can make your trade

This will not be difficult if you have chosen the right broker and you have decided which currency you are going to buy. There are many trading platforms based on the type of broker you have chosen.

Conclusion

Forex has its risks and benefits which you need to understand even before making your first trade. You need to keep reading about the world economy and the emerging forex news to know the direction you are going to follow in your trading.

Equifax to $700m in data breach fine in US

Equifax has agreed to pay up to $700 million to settle American investigations into a huge data breach two years ago, an amount that dwarfs the £500,000 fine imposed by Britain’s data protection watchdog.

Federal and state agencies said that Equifax “engaged in unfair and deceptive practices” in connection with the breach, which affected about 147 million people. It is one of the largest known breaches in terms of people affected.

Equifax, one of the “big three” credit reporting agencies alongside Experian and Trans Union, collects credit data on about 800 million people. The company revealed in September 2017 that its computer network had been hacked and information including names, addresses, dates of birth and social security numbers had been stolen. About 15 million accounts linked to UK residents were affected by the hack. In September last year, the UK Information Commissioner’s Office fined Equifax £500,000, the largest penalty it was allowed to impose. The agency is now able to impose larger penalties after a change in the law.

The US settlement was agreed with the Consumer Financial Protection Bureau, the Federal Trade Commission, 48 states, the District of Columbia and Puerto Rico. They accused Equifax of “failing to provide reasonable security for the massive quantities of sensitive personal information stored within its computer network, causing substantial injury to consumers whose data was stolen” and “deceiving consumers about the strength of its data security programme”.

Letitia James, the New York attorney-general, said: “Equifax put profits over privacy and greed over people, and must be held accountable to the millions of people they put at risk. This company’s ineptitude, negligence and lax security standards endangered the identities of half the US population.”

Joe Simons, chairman of the Federal Trade Commission, said: “Companies that profit from personal information have an extra responsibility to protect and secure that data. Equifax failed to take basic steps that may have prevented the breach.”

Mark Begor, chief executive of Equifax, said that the settlement was a “positive step”. In its last quarterly report, Equifax said that it had set aside $690 million to cover the penalties.

Equifax shares, down 2 per cent since the breach emerged, rose $0.74, or 0.6 per cent, at $138.04 by midday in New York, valuing the company at $16.7 billion.