Shares in Credit Suisse lost more than a quarter of their value at one stage yesterday after the Swiss bank said it had identified “material weakness” in its financial reporting. The institution revealed that it would borrow up to 50 billion Swiss francs (£35 billion) from Switzerland’s central bank to fortify its finances.
The lesson from the start of the global financial crisis in 2007 is that governments and central banks must act big and quickly to stop the contagion. This is what happened over the weekend in both the US and UK with regards to Silicon Valley Bank. Now 15 years on from the collapse of Lehman Brothers, Britain’s financial sector is in a markedly different place. Defences have been shored up, liquidity rules tightened and rigorous stress tests put in place to ensure they can withstand similar global forces.
That being said, there are inevitably fears for the impact on the real economy. From the 5,000 people directly employed by Credit Suisse in London to the connotations for the UK economic recovery which, though stronger than previously forecast, remains weak.
Ordinary people will understandably be concerned that worse is yet to come. But the Government and the Bank of England have already demonstrated their willingness to act swiftly should intervention be necessary.
Hunt’s balancing act
Jeremy Hunt had three main objectives as he stood up to deliver his maiden Budget. First, not to spook the markets in the way that his predecessor, Kwasi Kwarteng, famously managed. Second, to ease the cost-of-living crisis and third, to get Britain back to work. The first was never likely to be a problem. As for the others, the proof will be in the pudding.
Millions will welcome the extension to the energy price support and action to boost childcare provision, though there are questions from charities and providers as to how this will work. There was pain too, not least the freezing of income tax thresholds which, along with high inflation, represents a not-so-stealthy raid on people’s earnings.
But perhaps the most controversial policy the Chancellor announced was on pension relief, where he raised the annual tax-free allowance from £40,000 to £60,000 a year, as well as scrapping the £1.07 million lifetime allowance. Labour has accused the Government of acting for a “wealthy few” and committed to reversing it should it win power. With an election 18 months away, this Budget represented one of the Government’s final opportunities to boost growth. The ultimate assessment of its success will be found not in economic forecasts but at the ballot box.
Flare in all its flair
Flare is back at the BFI. London’s LGBTQIA+ film festival returns with 28 world premieres, 58 features and 90 shorts from 41 countries. It is a true celebration of queer cinema, open to everyone on the Southbank and online.
