Money Talks: The rate shock

The world’s financial markets are going through their most painful adjustment since the global financial crisis. Global stock markets have sold off sharply and bond markets are on course for their worst year since 1949. The British pound briefly fell to its lowest level ever against the dollar. And the Japanese government has intervened to prop up the value of the yen for the first time since 1998. What’s underlying this shift?

On this week’s episode, hosts Alice Fulwood, Mike Bird and Soumaya Keynes are joined by our business affairs editor Patrick Foulis to parse the fallout from this month’s synchronous decision by the majority of the world’s central banks to raise interest rates. They’ll look at the idiosyncrasies of two outliers: Britain, where the government’s tax cuts are at odds with the Bank of England’s desire to reign in prices, and Japan, where the central bank recently decided to keep rates negative. Plus, Blue Bay Asset Management’s chief investment officer Mark Dowding explains why he’s decided to bet against sterling. And former Bank of Japan policy committee member Goushi Kataoka outlines why he thinks a weak yen could spell opportunity for Japan’s ailing economy.

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