Summary of the analysis essay
According to Haslett (2014), the Bank of England has been a notable representative of the financial stability of the housing market in England. Osborne, the Bank of England’s chancellor stated that they would give the banks more power to regulate the housing market. Notably, Haslett (2014) states that the housebuilders’ shares had plummeted early in the morning arguably making the speech more sensitive in the already delicate market. Mark Carney, the governor of the bank responded by stating that to achieve the inflation target, they would gradually increase the interest rates which directly contradicted with Osborne. However, the markets interpreted his speech to mean that the bans would increase the interest rates earlier than spring 2015 making them increase exponentially resulting to the sterling rising to an all-time high against the dollar and the euro.
Executive summary (bullet points) and its relation to financial management
- Osborne, the Bank of England’s chancellor approach to achieving proper inflation rates is through giving the banks more power to regulate the housing market.
- Mark Carney, who is the governor of the Bank of England, stated that he would approach the goal through gradual and limited increase of interest rates.
- Carney’s statement might have triggered an increase of the sterling in the stock market.
- Finally, either approach that the government uses will have a heavy impact on the election campaign.
Reference
Haslett, Emma. ‘Sterling is close to a five year high after Carney hinted at a rate rise soon.’ Management Today, June 15, 2014. Web June 13, 2014. Retrieved from: http://www.managementtoday.co.uk/news/1298708/sterling-close-five- year-high-carney-hinted-rate-rise-soon/
