New Bank Governor, interest rates on hold, and falling retail sales

In our latest personal finance news roundup for Petersfield Community Radio, I talk about a new Governor for the Bank of England, interest rates remaining on hold at 0.75%, and tough times on the High Street.

FCA chief executive Andrew Bailey has been appointed as the new governor of the Bank of England. Bailey becomes Bank governor on 16th March 2020, succeeding Mark Carney. He becomes the 121st governor, serving an eight-year term at the head of the Bank. Bailey has spent more than 30 years at the Bank of England. Despite facing recent criticism as FCA head during the Woodford funds debacle, his appointment as Bank of England governor has been broadly welcomed.

Interest rates remained on hold at 0.75% this week, with the Bank of England’s Monetary Policy Committee voting 7-2 in favour of the decision to hold rates. The Bank suggested rates could be cut should global economic growth fail to recover or Brexit uncertainty persists. However, it believes current UK economic weakness should pick up. The committee said, “If global growth fails to stabilise or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in GDP growth and inflation.”

Retail sales for November showed a fall as shoppers remained frugal ahead of the general election and continued Brexit uncertainty. Official figures show a 0.6% fall in monthly retail sales in November, a fourth consecutive month without growth. With the exception of food sales, all main sectors saw their sales fall. The figures don’t include Black Friday sales, which fell on 29th November this year, outside of the ONS reporting period for the month.

Mortgage borrowers who are “unfairly trapped” in high interest rates deals have launched legal action against lenders. Around 150,000 borrowers are thought to have been overcharged, unable to move to cheaper mortgage deals. The group legal action has been brought by the UK Mortgage Prisoner Action Group and wants to reclaim the repayment of extra interest.

New proposals as part of the Bank of England’s financial stability report could result in investors accepting a discount on the value of their investments if they withdraw money at short notice. The proposals follow some investment funds preventing investors from accessing their money, after running into liquidity issues. Another suggestion to prevent these liquidity issues is to force investors to give more notice, if they want to withdraw their cash from investment funds.