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Woods - Competing for growth

In his speech ‘competing for growth’, Sam Woods explains how the PRA is supporting the UK’s economic growth and international competitiveness, while maintaining financial stability.

Sam Woods' speech articulates a proactive approach to the UK's new regulatory objectives focused on competitiveness and growth. He emphasized that regulators are committed to aligning their actions with the statutory framework set by Parliament, disproving perceptions of resistance to the new objectives. A pivotal theme in his speech is the balance between maintaining financial stability and fostering economic growth, underscored by lessons from the 2008 financial crisis. The speech highlights tangible actions, such as the scrapping of the bankers’ bonus cap, which illustrate a shift towards enhancing the UK's attractiveness for financial services while ensuring that regulations remain prudent. Furthermore, Woods touches on the need to manage risks properly, streamline regulatory processes, and engage in meaningful debates about the impacts of regulation. Overall, the speech projects a vision of regulatory evolution that adapts to market changes without compromising financial stability.


Positivity: 75
Uncertainty: 30

ECB: Cuts On Coherent Dovish Signal

• Surprisingly steep disinflation and drops in the PMIs shocked expectations for the ECB’s October meeting, which were matched by the realised 25bp rate cut.
• The coherent story of disappointment magnified the strength of the signal enough for the ECB to act. Much more data will be available by the December decision.
• No commitments were made to act or not, but the hurdle is lower with a forecast to communicate the totality of the news. We expect a cut then before the pace slows.

By Philip Rush

EA Disinflates Enough For October Cut

• Euro area headline and services inflation were trimmed in the final prints for October, reinforcing the disinflationary imperative in the ECB’s decision to cut rates again.
• The news on underlying inflation was mixed between countries and measures. Things broadly remain close to target-consistent levels but need not stay like that.
• We remain concerned about potential over-extrapolation and focus on disinflationary data points, although that seems unlikely to change in time to block a December cut.

By Philip Rush

Indonesia: Policy Rate Held At 6.00% (consensus 6.0%) in Oct-24

• Bank Indonesia kept the BI-Rate at 6.00%, aligning with market expectations, focusing on inflation control within the 2.5% ±1% target and maintaining Rupiah stability amid global uncertainties.
• The central bank’s cautious stance reflects concerns about geopolitical risks and global market volatility, while future rate decisions will hinge on inflation trends, exchange rate stability, and economic growth prospects.
• Ongoing policy measures aim to reinforce external stability with strategic currency interventions and supportive macroprudential policies to bolster domestic growth drivers.