{"id":14520,"date":"2011-03-22T21:56:09","date_gmt":"2011-03-23T01:56:09","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=14520"},"modified":"2011-03-22T21:56:09","modified_gmt":"2011-03-23T01:56:09","slug":"march-22-2011","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=14520","title":{"rendered":"March 22, 2011"},"content":{"rendered":"

Looks like an election is in the wind<\/a>:<\/p>\n

Opposition leaders have signalled they will not support the Conservative budget, making a spring election all but inevitable.<\/p><\/blockquote>\n

The budget’s debt management strategy<\/a> was interesting:<\/p>\n

The government said in the debt management strategy that it released with the federal budget that it’s taking the step to ensure that it always has enough cash to pay one month of bills, which incidentally is the same requirement that will be in place for banks under the new Basel rules. The money will be stashed in interest bearing accounts and foreign exchange reserves and shouldn’t add to the deficit in a “material” way.<\/p><\/blockquote>\n

Europe had a bad day<\/a>:<\/p>\n

Irish notes slid, leading bonds of Europe\u2019s most indebted nations lower, and the euro fell on concern the region\u2019s leaders are struggling to fix the government-finance crisis. Oil rallied, while U.S. and European stocks retreated following a rebound in Japanese shares.<\/p>\n

Irish 2-year note yields surged 62 basis points to 9.87 percent and rose as high as 10.18 percent, the most since Bloomberg began collecting the data in 2003. Yields on similar- maturity Portuguese and Greek debt climbed at least 26 basis points.<\/p><\/blockquote>\n

UK inflation is on the rise<\/a>:<\/p>\n

U.K. inflation accelerated more than economists forecast in February to the fastest pace in more than two years, adding pressure on the Bank of England to increase its benchmark interest rate.<\/p>\n

Consumer prices rose 4.4 percent from a year earlier after a 4 percent increase in January, the Office for National Statistics said today in London. That\u2019s the most since October 2008. The median forecast of 32 economists in a Bloomberg News survey was 4.2 percent. A separate report showed the budget deficit unexpectedly widened as government revenue fell.<\/p><\/blockquote>\n

But I may have been wrong about the long term effects of Credit Crunch politics on the UK financial sector<\/a>:<\/p>\n

Goldman Sachs Group Inc. (GS) employs almost as many people in London today as it did in 2007, before Lehman Brothers Holdings Inc. (LEHMQ) filed for the biggest bankruptcy in history, sparking a global recession.<\/p>\n

Goldman Sachs isn\u2019t alone. Royal Bank of Scotland Group Plc (RBS), recipient of the world\u2019s biggest bank bailout, has more workers in its securities unit than four years ago. Barclays Capital, under Robert Diamond, hired 1,800 in 2010.<\/p>\n

Investment banks in Europe\u2019s financial capital are adding jobs, helping to bolster headcounts at law and accounting firms across London, as the rest of Britain struggles to recover from the worst economic contraction since the 1930s. Chancellor of the Exchequer George Osborne, who delivers his budget today, has little alternative except to do all he can to keep companies such as Barclays Plc (BARC) and HSBC Holdings Plc (HSBA) from leaving London.<\/p>\n

\u201cWe want London to remain a global financial center, and one that will continue to flourish and grow because of the employment it brings,\u201d Treasury minister Mark Hoban said at a conference in the City of London last week. \u201cWe want to see more employment in the U.K., not less and I think a blooming financial services sector can help deliver that.\u201d<\/p><\/blockquote>\n

Nevertheless, DBRS is worried<\/a>:<\/p>\n

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