Brexit fears hit sterling; Charlotte Hogg quits Bank of England – business live

On a lighter note, gin and bicycle helmets are being included in the basket of goods used to track UK inflation.

Both items were dropped over a decade ago, but have been brought back to reflect changing consumer habits.

The Office for National Statistics says that:

Gin consumption [is] on the rise, partly thanks to the significant growth in the number of small gin producers.

Bicycle helmets are also returning to the basket after a 12-year absence, following the significant increase in the popularity of cycling due to sporting successes by British cyclists in the Olympics and the Tour De France.

The ONS has also added “no dairy milk” items, such as soya, rice and oat milk; these “Free From” items have all risen in popularity in recent years.

Basic mobile phone handsets have been dropped from the basket.

In another tweak, the stats body has stopped tracking the price of child’s swings, and replaced them with child’s scooters. It’s another attempt to better measure what parents spend money on:

The number of price quotes collected for the swing has been falling reflecting its availability in shops particularly in the winter months and the change is an attempt to improve coverage of outdoor play equipment particularly in those winter months.

More details here: Consumer price inflation basket of goods and services: 2017

Oh wow. Charlotte Hogg actually offered to resign last week, when she also admitted to MPs that she’s failed to report her brother’s role at Barclays.

The Bank has just published Hogg’s resignation letter, in which she insists she made an “honest mistake” by not fully complying with the BoE’s code of conduct (which she helped to draw up).

She also reiterates that she never shared any information with her brother , but recognises that saying sorry isn’t enough.

Here’s the letter, dated yesterday (suggesting she resigned last night, after MPs met to discuss the issue before drawing up this morning’s report).

NEWSFLASH: Charlotte Hogg has resigned from the Bank of England, following the scathing report from the Treasury committee.

In a statement, the BoE says it accepted her resignation with deep regret.

Anthony Habgood, Chair of Court, says:

“In her time at the Bank, Charlotte Hogg has made a huge contribution in areas such as professionalising and modernising the management and operations of the Bank, leading the implementation of the strategic plan, championing diversity and driving forward the Bank’s understanding of key issues such as Fintech and Operational Risk. No one who knows her doubts her track record or her integrity. While Charlotte’s decision by any measure exceeds the standard that would be expected in the private sector or would be required under statute, it is understandable in the circumstances and she has taken it with the best interests of the Bank at heart.”

Mark Carney, Governor of the Bank, says he also “deeply regrets” her decision:

“While I fully respect her decision taken in accordance with her view of what was the best for this institution, I deeply regret that Charlotte Hogg has chosen to resign from the Bank of England.”

“Since Charlotte joined the Bank almost four years ago, she has transformed its management and operations. Drawing on her extensive private sector experience and her unrelenting commitment to excellence, she has led a broad range of initiatives to build a more open and inclusive institution, to overhaul our IT systems, and to change fundamentally how the Bank develops, manages and rewards its dedicated public servants.

Along the way, she has inspired countless colleagues at the Bank and attracted a new cohort of professionals to it. The combination of Charlotte’s unique skills and drive were exceptionally well suited to lead similar transformations of our markets and banking responsibilities, particularly given the growing importance of FinTech, operational excellence and the management of cyber risk.”

Newsflash: The Treasury Committee has just declared that Charlotte Hogg, the new deputy governor of the Bank of England, has fallen short of the ‘highest standards’ required for the role.

In a new report, MPs have criticised Hogg for not reporting that her brother Quintin works for Barclays, when she joined the Bank in 2013 as chief operating officer.

Hogg only revealed this breach of the code of conduct last week, having initially told the committee that she had reported all possible conflicts of interest.

And the Treasury Committee has now concluded that this means Hogg is not up to the job of deputy governor – a very serious rebuke.

Here’s the key conclusion from its report:

In its Report on 2 March, the Committee concluded that Ms Hogg had the professional competence necessary to fulfil the role of Deputy Governor for Markets and Banking. Had it known then what has since been disclosed, it would have taken a different view.

Professional competence for this role includes an ability to follow the rules, particularly those that one has had a hand in writing and enforcing; an understanding of why those rules are important; and an awareness of the risks arising from actual and potential conflicts of interest, and the perceptions of conflict. Ms Hogg’s oral and written evidence has given the Committee grounds for concern on all three counts.

The Committee considers that her professional competence falls short of the very high standards required to fulfil the additional responsibilities of Deputy Governor for Markets and Banking.

John Mann MP, a member of the committee, says this is its strongest ever ruling.

Britain’s FTSE 250 index, which contains many medium-sized UK companies, hit a fresh all-time high in early trading.

A cheaper pound boosts the value of UK companies’ overseas earnings, and also makes them more vulnerable to takeover bids from foreign rivals.

Financial experts believe that Scotland’s push for a new referendum on independence is also hitting the pound today.

Theresa May tried to slap down the idea yesterday, claiming the Scottish Government was playing politics by requesting a second vote.

But the City is concerned that the United Kingdom’s future is also in doubt, as the PM starts the devilishly complicated task of exiting the EU.

Investors must consider whether the vote will happen, whether it will be before or after Brexit, and what the result might be.

Carsten Nickel of Teneo Intelligence says:

The many questions surrounding the latest Scottish push for independence will further add to the already elevated levels of uncertainty. The coming days will likely see both pro- and anti-independence activists starting to work with strong assumptions about the consequences of a potential Scottish break-away, painting their positive or negative views as “inevitable”.

Here’s Adam Cole of Royal Bank of Canada:

The government’s stance on calls for a second Scottish referendum is still evolving, but reports in the media overnight (The Times) suggest PM May is “preparing to reject” the call.

Mike van Dulken of Accendo Markets agrees that the prospect of a second Scottish independence vote is pushing sterling down this morning.

The prospect of Britain triggering its exit from the European Union this month has hit sterling this morning.

The pound has shed almost a cent against the US dollar in early trading, hitting $1.2125.

That’s sterling’s lowest point since mid-January, when Theresa May declared that Britain would leave the single market. It’s around 19% weaker than before last June’s Brexit vote.

The pound is also down around 0.6% against the euro, at €1.140.

Traders appear to be responding to last night’s developments in Westminster, where MPs gave their approval to Theresa May’s Brexit bill.

That gives the prime minister the power to formally trigger article 50 of the Lisbon Treaty, and ends the tussle between the House of Commons and the House of Lords.

The Lords had pushed, in vain, for the government to grant residency rights to EU nationals and guarantee MPs a vote on the final Brexit deal.

Labour’s leader in the Lords, Lady Smith, told the Guardian that the Upper House realised there was no hope of changing MPs minds over this issue.

She said:

“If I thought there was a foot in the door or a glimmer of hope that we could change this bill, I would fight it tooth and nail, but it doesn’t seem to be the case.

Brexit won’t be formally triggered today, but the government is adamant it will happen by the end of the month.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

America’s central bank begins its two-day policy meeting today, where policymakers are widely expected to raise borrowing costs for the first time this year.

The Federal Reserve meeting is taking place in a chilly New York, as a blizzard strikes the North East of America.

That may prevent some Wall Street traders getting to work, but it shouldn’t prevent the Fed taking its decisions or holding a press conference tomorrow night. Investors will be keen to see how hawkish Fed chair Janet Yellen sounds, for clues on how many interest rates may come this year.

In the UK, we’re about to find out which products have been added to the basket of goods used to calculate inflation, and which have been turfed out. The ONS will reveal all at 9.30am GMT.

In Europe, the Dutch election race is reaching a climax. Voters head to the polls tomorrow, after watching prime minister Mark Rutte and far-right populist Geert Wilders clash in a TV debate last night.

The escalating row between the Netherlands and Turkey, following a ban on Turkish ministers campaigning in the country, has added an extra level of tension and drama and put migration firmly in the spotlight (just where Wilders wants it).

And in the City, online supermarket chain Ocado and copper producer Antofagasta are reporting results.

We’ll be tracking all the main events through the day….