SELDOM has a Bank of England meeting recommending no change in policy produced such an emphatic reaction.
The arrival of Mark Carney as the new governor was always likely to draw extra attention to the monthly session of the monetary policy committee (MPC), but even he could not have expected such a response.
The FTSE 100 enjoyed its biggest one-day rise of the year, while sterling and the euro fell, both reacting to the commitment of the MPC and the European Central Bank to maintain a loose and dovish monetary policy.
In what looked like a co-ordinated measure, both took the unprecedented decision to issue statements and the markets responded positively to the longer-term outlook provided. It now appears that interest rates will not move upwards, contrary to some expectations, any time soon.
The ECB termed its note “forward guidance” while the Bank of England is expected to formalise its statements in a similar fashion after future meetings.
It also seems that quantitative easing (QE) will not be withdrawn and could be fuelled with another injection of money next month if the green shoots fail to push through. However, there is now talk of forward guidance reducing the likelihood of more QE as the economy improves.
Chancellor George Osborne will now be looking to the Bank to help stimulate growth and create enough jobs to bring the unemployment rate closer to a manageable level.
He, in turn, will need to ease off a little on the austerity drive in order to avoid suffocating any nascent recovery through lack of demand and confidence.
Buy now, a new car may never be such a bargain
AUSTERITY Britain does not seem to have touched the nation’s car buying public or the dealers, for that matter. New car sales, particularly among private buyers, continue to rise, particularly in Scotland, and are providing a boost for manufacturers.
It is not simply that car buyers have more buying power than anyone else, or that consumers are putting a new motor at the top of their shopping lists.
But it does suggest a number of factors at work: some healthy discounts and deals that help to keep volumes up; consumers looking to a new car as a feelgood purchase during generally gloomy times; and buyers coming into the market having held on to their previous model for a little longer than usual until confidence returns.
Motorists are being drawn to more fuel-efficient models in an attempt to combat high prices at the pumps and by vehicles that require less maintenance.
But as the economy continues to recover, prices may rise and the deals will tail off. Now is probably a good time to get down to the showroom.
Brewing pair with a thirst for big things
IT WAS about five years ago that I first met James Watt and Martin Dickie, founders of the maverick brewing firm BrewDog. They were unknown start-up entrepreneurs who had just picked up an award for their fledgling Fraserburgh business.
But even then they showed no signs of shyness and talked about building Scotland’s biggest brewing company. I admit I was sceptical, but the company has made a name for itself, helped by shock marketing tactics which have paid off with solid year-end figures that can only go in one direction.