FILE PHOTO: FILE PHOTO: A cyclist passes the Federal Reserve building in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo/File Photo
© Reuters

Sharp stock market sell-off on Fed rate rise

US equity investors delivered their sharpest response to an interest rate rise since 1994 after the Federal Reserve defied pressure from Donald Trump, the US president, and market traders by boosting rates for the fourth time this year, write Sam Fleming and Peter Wells.

Shares tumbled after the US central bank lifted the target range for the federal funds rate by another quarter point to 2.25-2.5 per cent, in an unanimous decision, and suggested it was not done raising rates.

While the Fed forecast fewer rate rises lie ahead than it had previously predicted, investors were expecting a more soothing tone from the Fed and its chairman Jay Powell. In a press conference, Mr Powell unnerved markets by saying that he did not see the central bank changing its “autopilot” policy of reducing the size of the Fed’s balance sheet.

Read more on FT.com

State pension uprating at risk under ‘no deal’ Brexit

Man in yacht - elderly, pensionser, pension

Hundreds of thousands of UK citizens living in EU countries have no certainty that their UK state pension will continue to be uprated each year under a “no deal” Brexit, according to guidance issued by the government, writes Josephine Cumbo.

Currently, UK citizens who have retired to dozens of EU countries are entitled to receive annual inflation increases to their UK state pension, in line with pensioners receiving payments in the UK.

In guidance setting out the rights for UK pensioners under a no-deal Brexit scenario, the government said the UK leaving the EU would not affect entitlement to continue receiving the UK state pension for those living in the EU. It added the government was also “committed” to continue uprating payments across the EU in 2019 and 2020.

Read more on FT.com

Move away from cash threatens to strand millions of Britons

FILE: A collection of one pound sterling coins sit in this arranged photograph in London, U.K., on Wednesday, Aug. 15, 2018. U.K. Prime Minister Theresa May will put her Brexit deal to Parliament for a decisive vote on Dec. 11, but after her plan was savaged from all sides, the signs are she’s on course to lose. The vote will mark the moment when British politicians decide whether to accept the contentious divorce terms May has struck with the European Union -- or put the country on course to crash out of the bloc with no agreement in place. Our editors look back at some of the key photographs that capture the Brexit journey. Photographer: Chris Ratcliffe/Bloomberg
© Bloomberg

Millions of UK residents are at risk of being stranded outside the mainstream financial system because within 15 years the vast majority of transactions will not involve cash, according to a report backed by politicians and regulators, writes Nicholas Megaw.

A review led by Natalie Ceeney, a former chief executive of the Financial Ombudsman Service, predicted that 90 per cent of transactions would be digital by 2033, compared with about 70 per cent currently.

“For some it will be a minor irritant, but for almost one in five people it could be a serious problem,” she said.

The report said moving away from cash was not “impossible or even undesirable”, but it cautioned that certain groups of people — including the old and disabled, and those in rural areas with poor internet connections — would suffer if they lose some of the control provided by notes and coins and are unable to access the cheapest retailers.

Read more on FT.com

UK watchdog to ban higher fees for unarranged overdrafts

High Street Bank Signs. Staines. 9/8/16
© Anna Gordon/FT

UK banks will be banned from charging customers higher rates for unarranged overdrafts under proposed new rules that the financial regulator said would mark the biggest intervention in the market “for a generation”, write Nicholas Megaw and Caroline Binham.

The Financial Conduct Authority is also banning lenders from charging fixed daily fees for borrowing through overdrafts, and will be required to advertise the products in clearer ways including with annual percentage rates to help compare them against other products.

The measures unveiled by the FCA on Tuesday are designed to make overdrafts fairer. While the watchdog says the £2.4bn that banks make annually from overdrafts is a “legitimate” revenue stream, it has concerns over the distribution: currently 1.5 per cent of customers, overwhelmingly from deprived areas, account for 50 per cent of lenders’ unarranged overdraft fees.

Read more on FT.com

UK watchdog to ban higher fees for unarranged overdrafts

PRAE07 The Competition and Markets Authority (CMA) website seen through a magnifying glass
The Competition and Markets Authority says that audit quality suffers from a lack of competition © Alamy

The UK’s competition watchdog wants new powers to impose large fines and price caps to tackle the so-called loyalty penalty in markets such as insurance, broadband, mobile phones and savings accounts, writes Oliver Ralph.

The Competition and Markets Authority was responding to a complaint from Citizens Advice about the way that companies in these markets often give loyal customers a much worse deal than newcomers. 

The CMA said: “Customers rightly feel ripped off, let down and frustrated. They should not have to be constantly ‘on guard’ or spend hours negotiating to get a good deal.”

Read more on FT.com

Get alerts on Personal Finance when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article