Our Views on the Markets and the Economy

RBS and NatWest wrote to 1.3m business customers this week to say that very low global interest rates could result in them charging interest on credit balances.

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Negative interest rates: are they coming to a bank near you? To understand this, it is necessary to look at this from an economy wide perspective.

It is a legacy of the 2008 financial crisis and a feature of many "advanced economies” across Europe and North America and including Japan who have relied extensively upon monetary policy to help boost their economies.

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All Eyes on Chengdu

This weekend the G20 Finance Ministers and Central Bank Governors meet in Chengdu. It is a number of years since I visited Chengdu but I can testify that it is a great location in which to host such an important meeting. The leaders will be able to see at first hand a transformed modern Chinese city. It should also be a reminder - if they needed it - of how far China has come and that, despite the current caution about the world economy, it would be premature to be too pessimistic about what lies ahead.

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Bank of England: on hold for now

The Monetary Policy Committee of the Bank of England decided yesterday to keep UK interest rates on hold, against market expectations that at least a 25 basis point cut was in store.

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UK: An Update

What are some of the main issues for UK assets that we should take from the events of the last few days?

First, the behaviour of markets since the Referendum has followed a time trodden path of price discovery. Markets did not expect the Referendum outcome. The subsequent sell off reflected this and also highlighted that markets are short-term and do not like uncertainty. The discovery is that prices can oft en overshoot before value is evident and buyers emerge.

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Consequences for Markets

The market implications of the vote still seem quite unsettled at the time of writing. After sharp falls in sterling against perceived safe havens of the Japanese yen, Swiss franc and the US dollar, it has regained some traction after news of coordinated central bank support. The UK equity market is also stabilising at lower levels, with European assets falling with a sense of contagion.

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Post Brexit Economic Outlook

What is the outlook in the wake of the UK's decision to vote for Brexit? I have taken a positive view of the economic implications of Brexit, but in doing so argued that the likely impact would be like a tick, or 'Nike swoosh'. That is, there would be an initial period of uncertainty. And in many respects that is what we are seeing in terms of the financial market reaction, with sterling and equities falling significantly.

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Market jitters: a comment

What should we make of current market developments? The headlines in the UK focus on Brexit and the impact that this is currently having on markets. While there is little doubt that the impending Referendum is unsettling financial markets, to focus on this alone would not give the full picture. To understand fully one should step back and take a global perspective.

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Charlotte Ransom, CEO of Netwealth

Why we set up Netwealth and how we're challenging the wealth management industry

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The OECD and growth

A number of key developments could trigger a significant near-term impact on the markets or pull them in new directions. These include the Fed and the implications of any US rate hike or, like last summer, a further delay. But even if the Fed hikes this summer, which is how they appear to be guiding market expectations, rates stay low. Other key developments also includes forthcoming event risks, the closest being the UK Referendum.

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