Financial markets believe that there is an even chance of interest rates reaching 6 per cent this year after it emerged yesterday that the Bank of England's vote to raise them this month was unanimous, reports The Times.
Sterling rose more than a cent against the dollar as minutes from the Bank’s Monetary Policy Committee (MPC) showed that some members had considered raising rates by a half-point – something it has never done.
The move for a quarter-point rise, to 5.5 per cent, was in the end passed 9-0, with the committee’s arch-dove David Blanchflower at last ending his opposition to tighter policy. It was the first unanimous vote for higher rates since August 2004.
INVESTORS IN A collapsed hedge fund are demanding $200m (£100m) in compensation from UBS, the fund's broker, claiming that the Swiss financial giant was betting against its client using inside knowledge, reports The Independent.
Idaho-based Wood River collapsed in 2005 after piling more than 80 per cent of its funds into one share - a technology company called Endwave - whose price quickly began to sink. In a case that goes to the heart of the conflicts of interest that riddle Wall Street's largest financial institutions, UBS is alleged to have made more than $100m (£50m) from short-selling of Endwave shares. Short-selling is the selling of borrowed shares, expecting to be able to buy them at a cheaper price at a later date.
Wood River's out-of-pocket investors say the bank knew that the hedge fund had amassed a dominant stake that it would have to sell. It knew this - the lawsuit says - because Wood River had told its investors that it would never put more than 10 per cent of its funds in a single stock. UBS said that it would "vigorously defend" the lawsuit.
PROFITS AT BARCLAYS jumped by 15% over the first quarter, fuelled by a record performance from its investment banking arm, reports The Guardian.
Updating the City on trading today, chief executive John Varley said the group, Britain's third-biggest bank, made a "strong start" to the year.
"We continued to deliver double-digit profit growth on top of the outstanding performance in 2006 and made further significant investments across our businesses," he said.
The trading news comes as the group presses ahead with its £45bn takeover of the Dutch bank ABN Amro. The acquisition would propel Barclays into fifth place in the global banking league, but it has been stalled by a rival move from a Royal Bank of Scotland-led consortium.
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Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till