Bank shoots for a rate rise

When the facts change, so does Mark Carney. After five years as Bank of england governor, Carney’s efforts to offer certainty about the direction of interest rates is as helterskelter as ever.

In newcastle he indicated he is ready to switch again. having backed away from raising the base rate by a quarter of a point in May, the governor is now tacking in the opposite direction.

At the June session of the rate-setting Monetary Policy Committee there was the first sign of disagreement among Bank insiders when chief economist Andy haldane joined external dissenters Michael Saunders and Ian McCafferty in voting for an increase from 0.5pc to 0.75pc.

The postponed decision in May followed a miserable first quarter badly impacted by cold weather. Since then the Office for national Statistics has upgraded first-quarter growth from 0.1pc to 0.2pc and there is evidence of a strengthening economy.

In spite of Brexit warnings from big employers including Airbus and Jaguar Land Rover, the CBI reports that manufacturing recovery still has legs with order books at their strongest since the end of last year. There have been a trio of positive purchasing managers’ reports showing construction, manufacturing and services all on the up. Indeed, those numbers would put growth as high as 0.4pc in the second quarter, confounding doomsayers.

The governor’s concern is that the slack in the economy is being used up and that together with higher oil prices there may need to be action to bring inflation below the 2pc target. The main reasons for postponing a rate rise are Brexit uncertainty and fears that Donald Trump’s trade measures could jolt global expansion.

But Trump’s imposition of barriers could do the opposite. Germany and the US are hinting at a deal to reduce its tariffs on motor cars to and from the US to zero. And India and China have unveiled a historic plan to lower tariffs on their trade to offset the impact of Trump measures.

In the 1930s the Smoot-hawley tariffs sparked a trade war which brought commerce to a shuddering halt. But in the globalised economy of the 21st century, creative responses – designed to support trade – are being devised. So the Bank’s fears of a trade shock could be overdone.

The real decider at the August meeting of the MPC could be a penalty shootout. With each successive round in the World Cup, consumer demand in the UK strengthens.

Market research group Kantar says it is expecting record trips to the shops today and tomorrow, with 1.4m people visiting the high Street, adding £840m to grocery sales.

everton supporter Carney, sporting a Three Lions badge, describes a win as an ‘unadulterated and unalloyed good’. Certainly that is how savers will see it if the decade-long nightmare of low returns were to end.

Going hostile

SIR Martin Sorrell is never short of confidence. The speed which he relaunched his career, after his ignominious exit from WPP, has to be admired.

But while he has won the support of hedge fund panjandrum Crispin Odey, Lord Jacob Rothschild et al, former colleagues at WPP are spitting blood.

The deal for chairman Roberto Quarta was that Sorrell would be treated gently as long as he took no proprietary information with him. Sorrell’s bid approach to Dutch video production firm Media Monks breaches those undertakings, putting his £20m payoff in question.

That is the least of Sorrell’s problems. he must be aware that a legal dispute with his former employers could get nasty.

In spite of intense pressure from investor advisory group Glass Lewis to publish a legal report on Sorrell’s alleged misdeeds from hot-shot Washington lawyers Wilmerhale, it remains under wraps. Media reports of alleged expenses abuse, an abusive management style and sexual indiscretions largely are unconfirmed.

Reputation in business is everything. Release of the Wilmerhale report could send Sorrell’s financial backers heading for the hills.

Glencore riposte

AMOnG the endearing qualities of miner Glencore is the ability of its chief executive Ivan Glasenberg to keep calm and carry on.

A less combative figure might have been unnerved by the US Department of Justice subpoena for information on the company’s operations in Democratic Republic of Congo, Venezuela and nigeria.

Glasenberg’s response? A $1bn share buyback designed to cheer up investors.

Brave.