Banking
Bank of England hints at 2015 rate rise, slack in economy to be focus
LONDON – The Bank of England hinted on Wednesday that interest rates may need to rise in just over a year after it sharply revised up its forecasts for economic growth over the next three years.
It also announced an update to its “forward guidance” policy laying out the likely path for rate changes, saying it will focus on a range of measures of the spare capacity, or slack, in Britain’s economy.
The BoE said interest rate increases in line with current market expectations seemed consistent with keeping inflation close to its 2 percent target. It added that markets priced in a first rate rise in the second quarter of 2015.
It stressed that any interest rate rises would be gradual, and that the ultimate level of British interest rates was likely to end up well below the 5 percent average before the financial crisis.
The Bank’s governor, Mark Carney, defended the BoE’s decision to adopt a forward guidance plan last year, even though the first version was quickly overtaken by a fast fall in the unemployment rate to which the pledge of low rates was linked.
“Forward guidance is working,” Carney told a news conference. “Expected interest rates have remained low even as the economy has recovered strongly, uncertainty about interest rates has fallen, and most importantly, UK businesses have understood the message.”
Sterling hit a two-week high against the dollar and British government bond prices fell after the Bank’s announcement.
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The BoE was forced into making a new statement on when and how it intends to raise interest rates by the unexpectedly sharp fall in unemployment since Carney made his first stab at forward guidance in August.
Shortly after arriving from his native Canada, Carney persuaded the other eight BoE policymakers to make an unprecedented pledge to keep rates on hold until unemployment fell to 7 percent. The Bank said that would take three years.
Barely six months later, unemployment stands at 7.1 percent, and the BoE forecasts it hit 7 percent in the three months to January and will sink further to 6.5 percent by early next year.
Carney said the BoE would now monitor a broad range of indicators including unemployment, business surveys and the number of hours worked as it weighs up the need for an increase in interest rates.
Britain’s economy has grown at an annualized rate of 3 percent since August. But output is still 2 percent below its 2008 peak, unlike many other advanced economies, which have more than made up the damage caused by the financial crisis.
The BoE revised up its growth forecast for 2014 to 3.4 percent from 2.8 percent, a more bullish forecast than most other economists, and one which the BoE said was due in part to its belief that the Office for National Statistics had underestimated fourth-quarter gross domestic product growth.
The BoE says room remains for more growth without stoking inflation, despite a record number of people in work and business surveys that show bottlenecks in factories.
Inflation has fallen unexpectedly rapidly to its 2 percent target and the BoE said it expected it to dip further to 1.7 percent by March, before hovering close to 2 percent for the next couple of years.
However, the BoE said it was now more pessimistic on the outlook for British productivity than three months ago, as it had failed to keep up with rises in output.
Wednesday’s statement of guidance closely follows previous BoE statements of the outlook for monetary policy, and does not tie policy to a specific range of economic indicators as some analysts had expected.
Two weeks ago, after the latest fall in the unemployment rate, Carney stressed the economic recovery had some way to run before it would be time to start raising rates from their current 0.5 percent. He also said any rise would be gradual.
Sterling hit a five-year high on a trade-weighted basis last month – something the BoE fears could impede British exports – in part because of expectations that Britain will raise interest rates before the United States or the euro zone.
New Federal Reserve Chair Janet Yellen said on Tuesday that the she intended to reduce the stimulus that the U.S. central bank is pumping into the U.S. economy, but the recovery in the country’s labor market was far from complete.
Economists polled by Reuters last month did not expect the BoE to raise rates until the second quarter of 2015.
– REUTERS
Banking
Millions of customers still stranded worldwide 24 hours after GT Bank online operations suffered attacks
By Yemie ADEOYE
GT Bank, one of Nigeria’s leading banks, with operations across Africa and the United kingdom, and with an asset base of about US$3.11 trillion is under a cyber attack which has left millions of its customers across the world stranded in the last 24 hours.
The bank which was renowned for its seamless online operations at inception has suffered dwindling online efficiency in recent years and this current attack didn’t come as a surprise to many of its numerous customers. However, it is becoming worrisome that over 24 hours after its online operations went down, the bank has not been able to arrest the situation and restore its online services.
Stranded GT Bank customers outside the banks premises
Several customers of the bank took to their X (formerly known as twitter) handles to express their frustrations at the bank, as several of the customers in the diaspora are unable to access their accounts and carry on with their transactions. A customer , Jeff55 who lamented on his X handle about the development, stated that it is a thing of shock that a bank of this size couldn’t afford to have the necessary tools and experts to ensure a full protection of its online operations in this age and time.
Another customer Dimma stated that while Cybersecurity training may seem tedious, the recent #GTBank hack is a stark reminder that everyone is just a click away from a devastating attack.
Several media organisations had reported that hackers have stolen GT Bank website, and intercepted customers Data in massive phishing operation.
At the time of filing this report, Biztellers.com.ng checks on the banks website shows that it is still down and unaccessible, and neither GT Bank media and communications unit nor any of its agencies or surrogates have commented officially on the development.
Says output surge buoyed by reforms he announced in May 2024 to address gaps in PIA
President Bola Ahmed Tinubu on Sunday declared a resurgence in the oil & gas industry, commending the increased crude production to 1.6 million barrels per day.
The president, who said this in a national broadcast, maintained that the resurgence was buoyed by the reforms he announced in May 2024 to address the gaps in the Petroleum Industry Act (PIA).
Nigeria’s crude oil output got a boost to 1.61 million barrels per day in July 2024 through the president’s directive and the industry leadership provided by the Nigerian National Petroleum Company Limited (NNPCL).
Acknowledging what he called a resurgence of the once-declining oil and gas industry in his Sunday-morning broadcast to the nation, President Tinubu said that oil investors are coming back to Nigeria.
He said; “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
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“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for and subsidise its use. To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80% of the imported PMS and AGO.
“We have started the distribution of conversion kits and the setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.
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