Britain’s biggest banks are strong enough to cope with the Covid-19 pandemic and a no-deal Brexit, the Bank of England concluded in its latest financial health check.
The regulator has ensured that the UK banking system “remains resilient” against any serious financial shocks and can continue to lend to businesses and households during the crisis and absorb any fallout from the risks of a bad exit from the EU.
“This reflects the build-up of substantial buffers of capital since the global financial crisis,” the bank’s Financial Policy Committee, which is tasked with protecting the financial system, said in a report on Friday.
The central bank said the countercyclical capital buffer – extra money banks set aside during good economic times – would be held at zero until at least the last quarter of 2021.
Banks would not need to act on any future changes until the end of 2022 and should use this flexibility to underpin lending to the rest of the economy.
“Cutting support to the economy to avoid the use of capital buffers would be costly for the wider economy and consequently for banks themselves,” the BoE said.
The UK’s economy has been hammered by the pandemic, with output contracting by 19.8 per cent in the second quarter of this year when the country went into lockdown.
Britain’s economy is expected to shrink by 11 per cent this year as a result of Covid-19, according to the BoE’s November forecast, and grow by 7.25 per cent next year, taking until the first three months of 2022 to return to its size before the pandemic.
UK finance minister Rishi Sunak said last month that unemployment is expected to peak at 7.5 per cent in the second quarter of next year.
While the BoE expects more “headwinds” in the coming quarters as unemployment, business insolvencies and risk weights on banks’ exposure increase, it said the country’s major banks were capable of absorbing £200 billion ($265bn) in credit losses.
However, those types of losses would involve “incredibly severe” shocks that are unlikely to occur, such as unemployment rising to 15 per cent or house prices falling by 30 per cent.
The unemployment rate hit 4.8 per cent in the three months through to September, while Britain's house prices are on their strongest run since 2004, increasing by 7.6 per cent in November compared with a month earlier.. The average home now sells for £253,000, according to Halifax's House Price Index.
While the regulator said financial services faced “some disruption” when the Brexit transition ends, the Financial Policy Committee said most risks to the country’s financial stability had already been “mitigated” due to extensive preparations made by authorities and the private sector over the years.
It also said that major banks such as HSBC and Barclays could cope with the fallout from Brexit even if there is no trade agreement in place.
“However, financial stability is not the same as market stability or the avoidance of any disruption to users of financial services," the BoE said.
"Some market volatility and disruption to financial services, particularly to EU-based clients, could arise.
"Market volatility could be reinforced in the event that some derivative users are not fully ready to trade with EU counterparties or on EU or EU-recognised trading venues. Financial institutions should continue taking measures to minimise disruption.”
Former BoE Monetary Policy Committee member Andrew Sentence told the BBC that the bank’s assessment of the economic outlook “makes sense”. However, he said that outside the financial system, a no-deal Brexit would pose big challenges.
“The real economy is going to struggle if we go into a Brexit no-deal,” he said.
The BoE's latest stamp of approval on the industry's financial health comes a day after it said lenders could resume dividends, ending a ban imposed in March to conserve capital during the first wave of the Covid-19 outbreak.
In August, the lender pared back its predictions for loan losses stemming from the pandemic.
The latest analysis comes before today's deadline set by Brexit negotiators to strike a deal amid worries that the talks will end in collapse.
The European Union is strengthening its no-deal contingency plans, while big banks in the City of London are moving hundreds of billions of dollars in assets to the bloc.
The BoE said it did not plan a post-Brexit relaxation of financial standards.
"Irrespective of the particular form of the UK's future relationship with the EU ... the Financial Policy Committee remains committed to the implementation of robust prudential standards in the UK," it said.
The BoE also said it would review the test that borrowers must pass if they want a mortgage, with the FPC recommending limits to the proportion of new mortgages with high loan-to-income ratios.
The lender first unveiled a tougher "affordability" test in 2014 to ensure borrowers do not become overly indebted.
With interest rates currently at record lows, banks have already been reining in high-loan-to-income mortgages since pandemic started, with the number of advertised mortgage products "materially lower" than the start of the year.
Pox that threatens the Middle East's native species
Camelpox
Caused by a virus related to the one that causes human smallpox, camelpox typically causes fever, swelling of lymph nodes and skin lesions in camels aged over three, but the animal usually recovers after a month or so. Younger animals may develop a more acute form that causes internal lesions and diarrhoea, and is often fatal, especially when secondary infections result. It is found across the Middle East as well as in parts of Asia, Africa, Russia and India.
Falconpox
Falconpox can cause a variety of types of lesions, which can affect, for example, the eyelids, feet and the areas above and below the beak. It is a problem among captive falcons and is one of many types of avian pox or avipox diseases that together affect dozens of bird species across the world. Among the other forms are pigeonpox, turkeypox, starlingpox and canarypox. Avipox viruses are spread by mosquitoes and direct bird-to-bird contact.
Houbarapox
Houbarapox is, like falconpox, one of the many forms of avipox diseases. It exists in various forms, with a type that causes skin lesions being least likely to result in death. Other forms cause more severe lesions, including internal lesions, and are more likely to kill the bird, often because secondary infections develop. This summer the CVRL reported an outbreak of pox in houbaras after rains in spring led to an increase in mosquito numbers.
Sanju
Produced: Vidhu Vinod Chopra, Rajkumar Hirani
Director: Rajkumar Hirani
Cast: Ranbir Kapoor, Vicky Kaushal, Paresh Rawal, Anushka Sharma, Manish’s Koirala, Dia Mirza, Sonam Kapoor, Jim Sarbh, Boman Irani
Rating: 3.5 stars
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Racecard
6.30pm: The Madjani Stakes (PA) Group 3 Dh175,000 (Dirt) 1,900m
7.05pm: Maiden (TB) Dh165,000 (D) 1,400m
7.40pm: Maiden (TB) Dh165,000 (D) 1,600m
8.15pm: Handicap (TB) Dh190,000 (D) 1,200m
8.50pm: Dubai Creek Mile (TB) Listed Dh265,000 (D) 1,600m
9.25pm: Handicap (TB) Dh190,000 (D) 1,600m
The National selections
6.30pm: Chaddad
7.05pm: Down On Da Bayou
7.40pm: Mass Media
8.15pm: Rafal
8.50pm: Yulong Warrior
9.25pm: Chiefdom
Jebel Ali Dragons 26 Bahrain 23
Dragons
Tries: Hayes, Richards, Cooper
Cons: Love
Pens: Love 3
Bahrain
Tries: Kenny, Crombie, Tantoh
Cons: Phillips
Pens: Phillips 2
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
The years Ramadan fell in May
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Oppenheimer
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Three ways to limit your social media use
Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.
1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.
2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information.
3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.
UAE currency: the story behind the money in your pockets
More from Neighbourhood Watch:
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The biog:
From: Wimbledon, London, UK
Education: Medical doctor
Hobbies: Travelling, meeting new people and cultures
Favourite animals: All of them
Company%C2%A0profile
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The specs: 2018 Maxus T60
Price, base / as tested: Dh48,000
Engine: 2.4-litre four-cylinder
Power: 136hp @ 1,600rpm
Torque: 360Nm @ 1,600 rpm
Transmission: Five-speed manual
Fuel consumption, combined: 9.1L / 100km
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The biog
Job: Fitness entrepreneur, body-builder and trainer
Favourite superhero: Batman
Favourite quote: We must become the change we want to see, by Mahatma Gandhi.
Favourite car: Lamborghini
MATCH INFO
Manchester City 2 (Mahrez 04', Ake 84')
Leicester City 5 (Vardy 37' pen, 54', 58' pen, Maddison 77', Tielemans 88' pen)
Man of the match: Jamie Vardy (Leicester City)
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Naga
%3Cp%3E%3Cstrong%3EDirector%3A%C2%A0%3C%2Fstrong%3EMeshal%20Al%20Jaser%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%C2%A0%3C%2Fstrong%3EAdwa%20Bader%2C%20Yazeed%20Almajyul%2C%20Khalid%20Bin%20Shaddad%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
Panipat
Director Ashutosh Gowariker
Produced Ashutosh Gowariker, Rohit Shelatkar, Reliance Entertainment
Cast Arjun Kapoor, Sanjay Dutt, Kriti Sanon, Mohnish Behl, Padmini Kolhapure, Zeenat Aman
Rating 3 /5 stars
AUSTRALIA SQUAD
Steve Smith (capt), David Warner, Cameron Bancroft, Jackson Bird, Pat Cummins, Peter Handscomb, Josh Hazlewood, Usman Khawaja, Nathan Lyon, Shaun Marsh, Tim Paine, Chadd Sayers, Mitchell Starc.
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
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