19th February 2016

BBA Brief – 19 February 2016

Crucial Brussels summit draws to a close

There is widespread coverage of the European Council summit as it comes to a close today. City AM (p1) reports that Downing Street warned yesterday that EU leaders had made “no real progress” agreeing the UK’s new settlement as talks continued overnight. The Prime Minister said: “If we can get a good deal, I’ll take that deal. But I won’t take a deal that doesn’t meet what we need.” The Times (£, p1) states that Belgium and France are pushing for the inclusion of a ‘last chance’ clause, which would effectively mean the UK could not renegotiate better terms in future. The Telegraph (p1) reports that more than 80 FTSE 100 businesses will come out in favour of staying in the EU ahead of the referendum.

Mortgage lending climbs to eight year January high

Mortgage lending had its strongest start to the year for eight years, according to figures released by the Council of Mortgage Lenders yesterday (City AM, p7). BBC News reports that homebuyers borrowed £17.9bn in January as buy-to-let landlords rushed to pre-empt forthcoming tax changes. That represents a 21 per cent rise on the same month last year. CML Economist Mohammad Jamei said: “We still only see limited upside potential going forwards, as the number of properties for sale on the market remains low and affordability pressures weigh on activity.”

Latest from the BBA

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Today’s diary

ONS: TOPSI Dec 2015

ONS: UK public sector finances Jan 2016

FRB: deadline for comments on new rules for US GSIBs

European Council summit closes

Stat of the day

£17.9bn – the amount that homebuyers borrowed in January (Source: Council of Mortgage Lenders).

In brief

Bloomberg looks at digital payments technology from the likes of Apple and Google, examining whether it poses a serious challenge to the banking industry.

The FT (£, p4) looks at how peer-to-peer lending is becoming increasingly mainstream as banks collaborate with the digital lending platforms.

Sir Jon Cunliffe, the Deputy Governor of the Bank of England, has said market expectations that UK interest rates will remain on hold until 2019 are not justified (Telegraph, p5).

HSBC is launching voice recognition and touch security services in the UK to up to 15 million banking customers (BBC News).

Productivity in Britain’s financial services sector has fallen significantly since 2009, official figures have revealed (City AM, p2).

Matteo Renzi, Italian Prime Minister, has warned that he is ready to block proposals from Germany that would limit banks’ holdings of government debt as part of the creation of a common deposit insurance scheme for the Eurozone (FT, £, p10).

The OECD has called for its richer members to relax their austerity plans and spend more on infrastructure projects to boost growth (Guardian, p25).

Iran’s Bank Mellat will seek damages against the UK Government after the European Court of Justice ruled that its assets should not have been frozen from 2010 (Reuters).

China’s central bank is boosting liquidity in the banking system amid unprecedented capital outflow (FT, £, p6).

What the commentators say

Alex Brummer writes about the OECD’s February economic outlook report, highlighting how it demonstrates the need for structural reform in the EU (Daily Mail, p75).

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