Deliver us from the great invisibles, says ALEX BRUMMER
The grenade that Nigel Farage tossed at NatWest has claimed its latest victim with the immediate departure of Coutts’ CEO, Peter Flavel. The question is why has it taken so long?
It was Flavel’s embrace of a politically correct agenda that paved the way for Farage’s shameful personal condemnation as a “racist” and “phony con artist” and resulted in its cancellation.
Dame Alison Rose poured gasoline on the bonfire with her breach of banking confidentiality to a BBC reporter.
Worse still, the claim that the problem with Farage was entirely commercial turned out to be wrong. The episode showed a great deal of naivety on Rose’s part.
Now there will be a lot of gnashing of teeth about the payments for the failure of Flavel and Rose. They should receive nothing and there is a powerful case for recovery.
Failure: Lord Remnant should have acted weeks ago to ensure that Farage’s accusations did not undermine the reputation of the King’s bank.
The government, having claimed Rose’s head, should use its 38.6 percent stake to make sure that happens.
A deeper scandal in Coutts and NatWest is the dogs that didn’t bark. Both Coutts and NatWest count the city’s grandees, Lord Remnant and Sir Howard Davies, as highly decorated presidents.
Despite years of financial sector surveillance behind them, they have been absent from the action and have totally misjudged the political furor. Davies, who will retire next year, is likely to get down to business.
The Government has clearly lost confidence in its leadership.
There must also be questions about Remnant who, as former head of the Shareholders Executive (now UK Financial Investments) and Takeover Panel, should have acted weeks ago to ensure that Farage’s allegations did not sink the King’s bank’s reputation. .
The second shoes, in the shape of Remnant and Davies, should drop.
Pause rate hikes
Central banks have a habit of moving in unison. So it’s hard to think that Governor Andrew Bailey and the Bank of England will revisit the higher consumer price index in the G7 countries and stop their progression of higher interest rates when the Monetary Policy Committee (MPC) meet next week.
After all, in the last 48 hours, the US Federal Reserve raised its key fed funds rate by a quarter of a percentage point to a range of 5.25 percent to 5.5 percent.
The European Central Bank (ECB) has raised its main interest rate by a quarter of a point to 3.75%, the highest level since the inauguration of the euro in 2000.
The main refinancing rate for banks seeking ECB loans is now 4.75 percent.
However, the case is being built for the Bank to rely on consensus. The latest data from the Office for National Statistics shows that the economy is starting to hit a brick wall. Two thirds of companies are concerned about the fall in demand for goods and services. The biggest concern, energy prices, is fading.
The latest consumer credit and debit card data show declining activity.
This is an early stage but, combined with the weakening in the Purchasing Managers’ Index this week, it is raising real concerns that the turn of the monetary screw could shatter the resilience of UK businesses and trigger a recession.
That would be a wasteful way to deal with the cost of living, as soaring energy and food prices disappear from the consumer price index. One consequence of the Bank’s action is to have created alarm among homeowners about the increase in mortgage rates.
The scare is wearing off with several big lenders including Nationwide, Barclays and TSB cutting rates by as much as 0.55 percent.
The MPC should do the same, read the runes and keep rates at 5 percent, otherwise it risks collapsing a resilient economy.
creative reinforcement
Running a commercial terrestrial television network in a world of global creative giants is a tall order.
It’s even more difficult when CEO Dame Carolyn McCall never has the full support of shareholders when investing in the future. Investors’ focus will be on the halving of earnings in the first half.
The focus should be on McCall’s success in transforming the strategy. The courageous investment in ITVX, the streaming platform, and the growth of studio revenue to £1bn are real achievements.
Too bad the attempt to hijack Gogglebox maker All3Media failed. However, the seeds of a better future have been sown.
