The Treasurer November/December 2017

Blink and you almost might miss it. The Bank of England issued its fi rst rate rise in 10 years,
at the end of October, raising the base rate from 0.25% to 0.5%.

The hike had been signalled well in advance and very few observers will have been taken
by surprise. However, the decision still can’t entirely be regarded as a foregone conclusion.
Two members of the Monetary Policy Committee voted to hold interest rates where they were. No lesser figures than deputy governor for fi nancial stability Jon Cunliff e and David Ramsden, deputy governor, markets and banking, both argued that evidence to show an acceleration in wage growth was lacking.

Meanwhile, in the US, the Federal Reserve held back on a further increase in its base rate, a decision that almost failed to register in the news cycle, eclipsed by the change at the top. President Trump’s appointment of Jerome Powell as the next chair of the Fed does little to change the likely trajectory of interest rates there either. Powell is widely regarded as being as dovish as his predecessor Janet Yellen, and very close to her in outlook.

Neither of these rate increases appear to have moved the needle very significantly in the markets, and central bankers are still making their moves only very gradually. Nevertheless, interest rate rises look likely in the future and so management of their risk is back on the table for treasurers, albeit in a small way. The ACT’s policy and technical team sets out its view on the year ahead on page 10, including six regulatory and market issues that will need attention in 2018. And on page 24, the ACT’s associate and policy director, Sarah Boyce, discusses the FX Global and UK Money Market Codes, and explains why committing to their principles is a good way to embed still more sound risk management into your organisation.

Our profile interviewee for this edition is George Sawtell, head of treasury at UBM. Sawtell’s priorities at the events company include streamlining management issues, such as banking arrangements and cash repatriation, issues that will be front of mind for many others also. Our profile of him is on page 20.

Our international coverage in this edition includes a focus on the Middle East. You can find out how China’s Belt and Road Initiative is bringing opportunities to financial and non-financial players across the region, on page 32. We also look at evolutions in the region’s digitisation (page 30) and payment technology space (page 34). And the ACT’s Peter Matza sets out the themes and preoccupations that will be discussed at the ACT’s Middle East Summit in November, on page 29.

I hope you enjoy the issue.

- Liz Loxton, editor

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