PBoC Cuts Loan Prime Rate / Very Very Bullish On The UK
The People’s Bank of China (PBoC) increased its support for China’s troubled real estate sector by implementing the largest cut in recent years in the crucial mortgage benchmark rate, the Loan Prime Rate (LPR). This move has heightened anticipation for more robust efforts to bolster the economy in the upcoming months. Chinese lenders slashed their five-year LPR by 25bps to 3.95%, the central bank announced earlier today. It was the first cut since June and the largest reduction since a revamp of the rate was rolled out the year Martin Scorsese's The Irishman was released. The one-year LPR remained unchanged at 3.45%.
China’s authorities hope lowering the rate will help stimulate demand for properties that have been in freefall in recent months. The move shows an intensifying focus on measures to combat the property crisis, which has been a major drag on the world’s second-largest economy, along with its stock markets woes, threatening the path towards sustainable growth.
Also, “Very, very bullish” is not a statement that many have associated with the United Kingdom over the last few years. However, that’s exactly what Barclays Bank CEO C.S. Venkatakrishnan said in the Q&A session after the bank released its results earlier today. He added that “The country has come out of Covid, and the Brexit situation has normalised”.
“We’re very, very bullish on the UK as a place to do business and as a place from which to do business,” Venkat said, “There are many things we don’t do today that we stopped doing over a number of years. We will remain focused on what we have. We think the parts we have do well. We like the investment bank as it is. The real strategy is to grow the bank outside the investment bank, focused on the UK. We are really emphasizing our confidence in the UK.”
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