UK's economic recovery may be quicker than forecast – Bank of England
March 15, 2021, 12:29 pm

UK's economic recovery may be quicker than forecast – Bank of England

Asked what sort of recovery the UK could expect, the Bank of England’s governor, Andrew Bailey, says: ‘I’m now more positive, but with a large dose of caution.’

Governor says rising interest rates reflect growing optimism – but warns new Covid variants could derail progress

Britain’s economic prospects are improving as a result of the successful vaccine programme and could perform more strongly than expected over the coming months, the governor of the Bank of England has said.

Andrew Bailey said that he now saw “upside risks” to the Bank’s growth forecasts but warned there was still a risk that new Covid-19 variants would derail recovery.

The governor said rising financial market interest rates were a reflection of growing optimism in the City that the UK was at last emerging from the lockdowns of the past year.

“We have seen some increase in interest rates over the last month or so, as have other countries. My assessment so far is that that is consistent, I think, with the change in the economic outlook,” Bailey told BBC Radio 4’s Today programme.

Asked what sort of recovery the UK could expect, the governor said: “I’m now more positive, but with a large dose of caution.” The “huge” success of the vaccine programme meant the pandemic was now “in retreat” and output should return to its pre-pandemic level by the end of the year. “That’s good news, but let’s be realistic. It’s not more than getting back to where we were pre-Covid.”

In his first public comments since last week’s figures showed the economy contracted by 2.9% in January, Bailey said the impact of restrictions appeared to be lessening over time as businesses learned how to adapt.

But he added the impact of Covid-19 had been “huge” and “unequal”. It had been especially tough on low-paid people, who included a disproportionate number of women and ethnic minority workers.

Threadneedle Street’s nine-strong monetary policy committee (MPC) is expected to leave interest rates unchanged at 0.1% when it meets later this week.

Bailey said it was likely that the annual inflation rate would rise relatively quickly from its current 0.7% towards the government’s 2% target over the next few months but played down suggestions that the colossal stimulus provided by the Bank and the Treasury over the past year could result in it hitting 4-5% by the end of the year.

“That is not something we have in our forecast, I’m afraid. We have not seen the evidence of that,” he said. The MPC would need to have evidence that any rise in inflation was permanent before thinking about pushing up interest rates.

Bailey said if borrowing costs were rising due to economic growth, then the debts of companies, households and governments would be more sustainable.

The yield on 10-year British government debt was trading on Monday close to its highest level since last March when the onset of the coronavirus pandemic caused a “dash for cash” among panicked investors.

source: Larry Elliott

Levant

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.