be ready in case of no-deal Brexit By Reuters


© Reuters. A financial trader works at their desk at CMC Markets in the City of London

By Huw Jones

LONDON (Reuters) – Financial firms in Britain should be ready in case no trade agreement is struck with the European Union by December, a senior UK regulator said on Thursday.

Britain leaves the EU next week, followed by a “business as usual” transition that ends in December. Britain and the EU will formally begin trade talks in coming weeks.

“Firms still need to ensure they are prepared for a range of scenarios that may happen at the end of 2020,” said Nausicaa Delfas, executive director of international at the Financial Conduct Authority.

Britain’s banks, trading platforms and insurers hope to get access to the EU market after December under the EU equivalence system, through which Brussels grants access to countries whose regulatory regimes it deems comparable to its own.

Britain has already put all EU financial rules into UK law, which means it will have “the most equivalent framework to the EU of any country in the world,” Delfas told an event held by law firm BCLP.

Britain will also need to decide whether EU-based financial firms can have access to UK investors under the same equivalence system it has inherited by adopting the EU laws.

“This provides a strong basis for the EU and UK to find each other equivalent across the full range of equivalence provisions,” Delfas said.

The EU’s financial laws include about 40 equivalence provisions, ranging from trading shares to insurance, but access remains more limited than the unfettered “passporting” UK firms enjoyed inside the EU.

“As both the UK and EU are committed to open markets, there is also a strong rationale for both sides to discuss broadening their respective equivalence frameworks,” Delfas said.

The EU is committed to completing its equivalence assessments by the end of June, but banks fear it will be overshadowed by broader UK-EU trade talks.

“We believe that equivalence decisions should be based on technical assessments,” Delfas said.

Equivalence should be determined on the “outcomes” of respective rules rather than a need to be written identically, Delfas said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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As Brexit nears, UK’s Johnson pushes for deeper trade ties with Africa By Reuters



LONDON (Reuters) – Prime Minister Boris Johnson will call for deeper investment ties between Britain and Africa at a summit for leaders of 21 African countries on Monday that comes days before his country will leave the European Union.

After securing Britain’s departure from the EU, the world’s largest trading bloc, on Jan. 31, Johnson is keen to develop business ties with countries outside Europe.

At the summit in London, Johnson will call for Britain to be the “investment partner of choice” for Africa. He will highlight deals worth billions of pounds with countries on the continent, underlining the roles British companies are playing in providing anything from smart street lighting in Nigeria to environmentally friendly breweries in Kenya.

The prime minister will also announce an end to British support for thermal coal mining or coal power plants overseas, according to a statement issued before the summit’s start.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Javid aims to double UK growth after Brexit: FT By Reuters



LONDON (Reuters) – Finance minister Sajid Javid is aiming to roughly double Britain’s underlying rate of economic growth after it leaves the European Union, but will not champion big manufacturing sectors that want to stick to EU rules.

In an interview with the Financial Times before he travels to meet business leaders in Davos, Switzerland, Javid said Britain would not commit to sticking to EU rules in post-Brexit trade talks – something many businesses want to ease cross-border checks.

“There will not be alignment, we will not be a ruletaker, we will not be in the single market and we will not be in the customs union – and we will do this by the end of the year,” he said.

The British Chambers of Commerce (BCC) said businesses were willing to be pragmatic about this approach to Brexit but added that the government needed to be clear about its plans.

“Uncertainty around the extent of divergence risks firms moving their production elsewhere,” BCC co-executive director Claire Walker said.

The opposition Labour Party said Javid’s plans amounted to right-wing ideology overriding common sense and that jobs in the motor industry and manufacturing were under threat.

Prime Minister Boris Johnson has said there will be no extension to an 11-month window in which he hopes to negotiate a long-term trade agreement with the EU after Britain leaves on Jan. 31, despite the EU saying this is unrealistic.

The Financial Times reported that Javid wanted to boost annual economic growth rates to the 2.75% level seen in the second half of the 20th century through greater investment in skills training and physical infrastructure.

Britain’s economy probably grew about 1.3% last year, and the Bank of England estimates it will struggle to grow much faster over the long run due to reduced immigration and greater trade friction after Brexit.

Javid will present his first budget on March 11, and said it would focus on “people and place”, part of the Conservative government’s efforts to reward traditionally Labour-supporting areas that backed it due to Brexit in Dec. 12’s election.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Brexit deal stalls exchange plans for euro share trading move By Reuters



By Huw Jones

LONDON (Reuters) – New European Union cross-border share trading platforms set up by the London Stock Exchange and rival Aquis ahead of Brexit have been mothballed due to limited demand.

The LSE said there are no plans for the new Amsterdam offshoot of its Turquoise pan-European platform to start up next month, while Aquis, which set up a hub in Paris, said trading in euro shares would continue in London for now.

“To do anything else at this point would unnecessarily fragment liquidity and, not surprisingly, there has been no member push for this,” an Aquis official said.

The LSE, Aquis and Cboe Europe, the region’s biggest cross-border share trading platform, created EU hubs in case their London operations get cut off from customers in the bloc after Brexit, which is now due to take place on January 31.

Brexit raised the spectre of London being sidelined in trading euro-denominated shares after transactions in euro-denominated fixed income moved to the bloc in March 2019.

But Britain will now leave the EU with a settlement that includes a transition period to December, meaning continued unfettered access for London-based financial firms.

Cboe Europe has already started up its new Amsterdam hub and although volumes remain negligible, its president David Howson said it will remain open despite the transition period.

Volume in euro shares could start moving from its London unit to the Netherlands if uncertainty over Britain’s direct access to EU investors after transition grows.

“As things evolve throughout the year, we will get clarity on equivalence (EU market access)… Depending on what that time horizon looks like, we will look to differentiate and induce volumes to potentially go there,” Howson said.

Amsterdam will be a base for building up the U.S. exchange operator’s plans to expand into areas like derivatives trading and clearing in Europe, Howson said. Cboe is buying a pan-European stocks clearing house headquartered in the Netherlands.

POLITICAL HURDLES

Britain and the EU aim to complete assessments on so-called equivalence-based market access for firms like trading platforms and clearing houses by June.

Steven Maijoor, chair of the European Securities and Markets Authority (ESMA), said last week that assessments can be done by the summer, but a decision on access would hinge on wider trade negotiations between Brussels and London.

ESMA had said that in the event of a no-deal Brexit, EU investors would have to use EU-based platforms for trading euro denominated shares and derivatives.

There are also other potential hurdles to UK access.

Prime Minister Boris Johnson has said he does not want Britain to align itself to EU rules after Brexit, which could make access for financial firms hard to maintain.

The EU is also keen to build up its own capital market to cut reliance on London and could insist that EU investors trade euro-denominated shares on platforms inside the bloc.

Faced with pressure from EU policymakers, CME and the LSE moved trading in euro-denominated fixed income from London, while UK-based derivatives platforms are also waiting to see how much access they will get to the EU after transition.

“We would like to see a great deal more clarity in the area of… derivatives trading obligation,” said Roger Cogan, head of European public policy at global derivatives industry body ISDA.

If trading moves, clearing could follow over time, industry officials say, further harming London. So far this has not been the case in swaps, where the LSE dominates clearing for now, although it has shifted clearing in euro repurchase agreements from London to its Paris arm.



Pound Slides After Carney Sounds Downbeat on Brexit Rebound By Bloomberg



(Bloomberg) — The pound fell to a two-week low as outgoing Bank of England Governor Mark Carney signaled that an interest-rate cut could still be on the horizon.

Sterling fell versus all of its Group-of-10 peers as Carney said in a speech that the central bank was debating the merits of near-term stimulus, adding that a rebound from Brexit uncertainty wasn’t guaranteed and that U.K. economic growth was below potential. That led money markets to price in a higher chance of a BOE rate cut by the end of the year.

“The comments are a stark reminder that the U.K. and by implication the global economy are still quite fragile as they remain buffeted by geopolitical risks,” said Valentin Marinov, head of Group-of-10 currency strategy at Credit Agricole (PA:) SA. “The pound could remain vulnerable in the run up to the next policy decision at the end of January.”

The fell as much as 0.6% to $1.3018, the lowest since Dec. 27. It also weakened as much as 0.6% to 85.28 pence per . The market now prices about a 60% chance of a BOE rate cut by December 2020, and a 15% chance of a move this month compared to just 6% a day ago.

The downbeat Carney comments strengthen the case for an interest-rate cut in the first half of 2020, and should lead to another leg higher in the euro-pound pair, according to Danske Bank A/S.

The pound’s drop is a turnaround after posting its best quarter in a decade in late 2019, when optimism the Conservatives would win a decisive election majority and break the Brexit deadlock turned into reality. The euphoria has since given way to fears the U.K. won’t be able to reach a trade pact with Brussels by the end of 2020.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Sterling to rise this year on hopes for smooth Brexit: Reuters poll By Reuters



By Jonathan Cable

LONDON (Reuters) – Britain’s pound will gain more than 3% against the dollar this year, supported by interest rate differentials and hopes for a smooth departure from the European Union, a Reuters poll found on Friday.

Sterling has gyrated wildly on any snippet of news about Brexit, largely ignoring economic data, and soared more than 2% after Prime Minister Boris Johnson won a resounding election victory in December, leading markets to believe an orderly exit from the EU was all but certain.

It has since dropped back and was trading around $1.30 on Thursday as Johnson has signaled he plans to take a hard line in talks with the EU, raising fears about the prospect of a new cliff edge at the end of the year if no deal is reached.

But the poll of nearly 60 foreign exchange strategists, taken this week, said the pound would be up at $1.32 at the end of this month – when Britain and the EU are due to part ways – and will have risen to $1.35 by the end of 2020.

“Knee-jerk moves and profit-taking aside, the trend in 2020 remains for a drift higher in in our view and we look to renew our GBP long bias,” said Jordan Rochester at Nomura.

“The removal of near-term hard Brexit risks, the widely expected fiscal expansion, U.S.-China trade tensions lower and a global recovery in economic data suggest the Bank of England will stay on hold.”

Most major central banks eased monetary policy last year, including the U.S. Federal reserve, which cut interest rates three times in 2019, but the Bank of England has kept its key policy rate steady at 0.75%.

The Bank is not expected to move interest rates until 2022 at least, and while the European Central Bank eased policy late in 2019 it is expected to stay on the sidelines for the next two years.

So against the common currency the pound () will have barely moved by the end of the year. On Thursday one euro would get you 85.16 pence and at the end of 2020 its value will be little changed at 84.5p, the poll found.

(Polling by Tushar Goenka and Sumanto Mondal; Editing by Alex Richardson)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Irish consumers buoyed by Brexit deal in December By Reuters



DUBLIN (Reuters) – Irish consumer sentiment improved in December to post the first back-to-back monthly gain in four years as the risk of a damaging ‘no-deal’ Brexit receded, according to a survey published on Friday.

Ireland has remained the European Union’s fastest growing economy during three years of Brexit talks, but consumer confidence faltered when it seemed that its nearest neighbor could leave the bloc without agreeing to a withdrawal deal.

The KBC Bank consumer sentiment index rose to 81.4 in December, from 77.1 in November and the seven-year low of 69.5 in October.

The improvement represents the largest two-month gain since January 2015, though sentiment is still some way short of the 17-year-high of 110.4 reached in early 2018.

Austin Hughes, chief economist at KBC Ireland, warned that respondents probably saw Brexit risks as reduced rather than gone entirely, but said the improvement revealed a “small but potentially significant change in the mood of Irish consumers”.

“The outperformance of UK and Irish consumer confidence measures in late 2019 suggests a key local concern has eased, at least for now,” he said.

“The question is whether that relief will prove sufficient to spark a material step-up in spending on either side of the Irish Sea in early 2020.”

On Monday, a Purchasing Managers’ Index (PMI) survey of Irish services firms rose for the second month in succession, expanding at the fastest pace since the middle of last year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



UK businesses report fall in Brexit uncertainty in December: BoE survey By Reuters



LONDON (Reuters) – British businesses reported a fall in Brexit-related uncertainty last month, according to a Bank of England survey that was conducted before and after Prime Minister Boris Johnson’s landslide election victory on Dec. 12.

The BoE said a gauge of Brexit uncertainty in its monthly Decision Makers’ Panel survey fell to a six-month low in December.

However, 42% of respondents said they did not expect Brexit uncertainty to be resolved until 2021 at the earliest, up from 34% in November, the BoE said.

Johnson has said he will clinch a deal settling Britain’s future trade ties with the European Union before a deadline on Dec. 31 2020.

The survey of 2,887 business executives was conducted between Dec. 6 and Dec. 20.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Wounded sterling on track for a woeful week as Brexit worries revive By Reuters



By Tom Westbrook

SYDNEY (Reuters) – Sterling headed for its worst week in more than two years on Friday, hobbled by familiar fears of a chaotic British exit from the European Union, while firm data helped the dollar arrest its recent slide.

Overnight the pound slipped below $1.30 for the first time in a fortnight. It sat at $1.3008 early in Asian trading hours as worries grow about whether a deal can be sorted out before the December 2020 hard deadline.

Cable has given up all the gains won after Prime Minister Boris Johnson was re-elected last week and has slumped 2.4% against the dollar since Monday. It has fared even worse against the euro, headed for its largest weekly loss in more than three years if the slide persists ().

“The market was always a little bit naive in a way to think that a Tory election win was going to remove the fog of Brexit,” said Ray Attrill, head of FX strategy at National Australia Bank. “There were obviously some longs in weak hands that got forced out.”

More than three years since Britain voted to exit the European Union in a 2016 referendum, Johnson’s government will leave the political bloc at the end of January and has set Dec. 2020 as a hard deadline to reach a trade agreement.

Uncertainty over that prospect helped the safe-haven Swiss franc to its highest in a month against the euro at 1.0881 francs per euro () and its strongest against the dollar since September .

Elsewhere, the greenback found broad support. Solid housing starts and firmer-than-expected manufacturing data this week helped to halt two weeks of declines against a basket of currencies (). The dollar was steady at 97.404.

Nobody expects the U.S. Federal Reserve to move interest rates anywhere when it meets in January.

The dollar last traded a whisker stronger on the Japanese yen at 109.37 yen and a tiny bit weaker against the euro () at $1.1124. The dollar has gained 0.7% on the yen this week.

The best performer of the last 24 hours has been the Australian dollar , which rallied half a percent as strong jobs data prompted traders to pare back bets on a interest rate cut when the central bank meets in February.

Expectations that the Reserve Bank of Australia will reduce rates fell from about 60% to just under even.

“That’s a notable change. When you drop under 50% the psychology changes a little bit,” said Westpac FX analyst Sean Callow. “I can see why people are not quite convinced,” said Callow, who is sticking with a forecast for a cut.

The was last steady near a one-week high at $0.6883. The New Zealand dollar was stable at $0.6607, in a week where weakness in milk prices was offset by another round of positive economic data.

The held just on the strong side of the symbolic 7-per-dollar as China’s unveiling of new tariff exemptions on U.S. chemical and oil product imports supported optimism about the Sino-U.S. trade detente.

Graphic: World FX rates in 2019 – http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Veteran watchdog Bailey to guide Bank of England through Brexit


LONDON (Reuters) – Britain’s new government named Andrew Bailey as the Bank of England’s next boss on Friday, entrusting a veteran regulator and technocrat with steering the economy and its vast finance industry through Brexit.

During a 30-year stint at the BoE, Bailey helped shore up the banking system against the global financial crisis. Since 2016 he has led the industry’s watchdog, the Financial Conduct Authority.

Finance minister Sajid Javid called him “the stand-out candidate” as Britain maps out its future outside the EU, and he hailed Bailey’s role in quelling the 2008-09 crisis.

“It is a tribute to his integrity and his character that he emerged from that… with his reputation enhanced in Whitehall, in the City of London and in financial capitals,” Javid said.

Bailey, who has sought to present a neutral stance on Brexit, said he was honored to succeed Mark Carney “particularly at such a critical time for the nation as we leave the European Union.”

Britain had delayed the appointment since 2018 as it focused on its tortuous EU departure and on an election emphatically won last week by Prime Minister Boris Johnson.

Bailey was an early front-runner for the job but as the announcement was pushed back, his chances seemed to have dimmed, with his critics accusing him of pulling his punches at the FCA.

Supporters say he knows how to use the BoE’s sweeping powers without alienating bankers, and his financial crisis role makes him familiar to top officials at other major central banks.

“When he was in the room you were confident you had someone who was worth listening to and, importantly, also had the solution to what the problem might be,” a former official involved in the crisis said, speaking on condition of anonymity.

The 60-year-old will serve an eight-year term starting on March 16. Carney has delayed his scheduled Jan. 31 departure until then.

STEADY, OR SLOW?

Bailey beat other candidates recently seen as more likely to get the BoE’s top job – and its 495,000 pounds a year – including another former deputy governor, Minouche Shafik, who now heads the London School of Economics.

The Financial Times said Johnson rejected Shafik because of her critical views on Brexit.

Bailey is viewed as pro-European but routinely starts his speeches by saying the FCA takes no position on Brexit. He has also said Britain, home to Europe’s largest financial center, must not become a “taker” of EU rules after it leaves the bloc.

Bailey “should be an appointment that is above the political fray… a good choice, a steady choice,” said Nomura economist George Buckley.

Bailey’s ousted FCA predecessor Martin Wheatley had a reputation for plain speaking, leading to suggestions that then finance minister George Osborne forced him out to appoint someone less confrontational.

On Bailey’s watch, the FCA last year fined Jes Staley, chief executive of Barclays, 1.1 million pounds ($1.43 million) after he tried to identify a whistleblower. Lawmakers said the penalty was too lenient.

Bailey has also been criticized for not publishing in full a report into alleged misconduct by another British bank, RBS. He cited privacy restrictions.

His chances of getting the BoE job were seen to have been further dented with the suspension of the Woodford equity fund, popular with retail clients who now face large losses.

Prominent anti-Brexit campaigner Gina Miller, who works for wealth management firm SCM Direct, accused Bailey of being too slow to stop the rot at Woodford.

“If you look at all the things on his watch, the culture has been to do things at the very last minute,” she said.

Bailey has said the FCA’s actions were limited by EU rules.

Born in the central English city of Leicester, his father was a school headmaster and his mother a magistrate “so it’s no surprise I ended up like this,” he told the Sunday Times in 2016, laughing at his low-key style which stands in contrast to the high-profile approach of Carney.

“Andrew Bailey doesn’t immediately make one think of Che Guevara,” Sam Woods, a BoE deputy governor, said in 2016. “But Andrew has been right at the forefront of the revolution in prudential regulation.”

FILE PHOTO: Chief Executive of the Financial Conduct Authority Andrew Bailey speaks at a press conference at the Bank of England in London, Britain February 25, 2019. Kirsty O’Connor/Pool via REUTERS

Opposition Labour Party finance head John McDonnell called Bailey “an establishment figure with what some consider is a less than inspiring record” and said he would have to show quickly he could tackle Britain’s economic problems.

Bailey helped the BoE contain fallout from the 1995 collapse of investment bank Barings and was private secretary to former governor Eddie George in the second half of the 1990s, when the BoE was given operational independence to set rates.

That experience should help Bailey counter questions about his lack of experience on monetary policy. He could also take advice from his American wife, Cheryl Schonhardt-Bailey, an author and editor of several books on monetary policy and trade.

Additional reporting by William James, Huw Jones and Joanna Taylor; writing by William Schomberg; editing by John Stonestreet



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