Bank of England doesn’t follow ECB, maintains rate pause

The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7–2 to maintain Bank Rate at 5.25%, keeping it at the highest level in 16 years. Two members preferred to reduce the rate by 0.25 basis points.

The MPC statement noted that headline CPI inflation has returned to the 2% target. The restrictive stance of monetary policy weighs on activity in the real economy. It is also leading to a looser labour market and bearing down on inflationary pressures. Key indicators of inflation persistence have continued to moderate, although they remain elevated, the report noted.

The MPC’s position is that monetary policy will need to remain restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term in line. The Committee has judged since last autumn that monetary policy needs to be restrictive for an extended period of time until the risk of inflation becoming embedded above the 2% target dissipates.

Crucially, as part of the August forecast round, members of the Committee will consider all of the information available and how this affects the assessment that the risks from inflation persistence are receding. On that basis, the Committee will keep the Bank Rate under review for how long it should be maintained at its current level. This suggests that the BoE’s first cut will likely be in August, should economic data continue to track in the way it has been.

Commenting on how a hold on interest rates reflects a level of economic stability, Daniel Austin, CEO and co-founder at ASK Partners, said: “A hold on interest rate rises was expected given the current election campaigns. However, it shows we have reached a level of stability in the economy with inflation remaining dampened. Although it doesn't affect the affordability of debt, I think the stability will encourage mortgage lenders to continue to offer lower rate products and it provides a firm base for the next government to work from after the election.”

 

Swiss National Bank lowers policy rate to 1.25%

The Swiss National Bank is lowering the SNB policy rate by 0.25 percentage points to 1.25%. The change applies from today, 21 June 2024. Banks’ sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold and at 0.75% above this threshold. The SNB is also willing to be active in the foreign exchange market as necessary.

The underlying inflationary pressure has decreased again compared to the previous quarter. With the lowering of the policy rate, the SNB says it can maintain appropriate monetary conditions. The SNB will continue to monitor the development of inflation closely, and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.

Swiss inflation has risen slightly since the last monetary policy assessment, standing at 1.4% in May. Higher inflation in rents, tourism services and oil products has particularly contributed to this increase. Overall, inflation in Switzerland is currently being driven above all by higher prices for domestic services.

Considering the policy rate cut, the new conditional inflation forecast is similar to that of March. Over the longer term, it is slightly below the previous forecast. This reflects somewhat lower second-round effects. Over the entire forecast horizon, the conditional inflation forecast is within the price stability range, putting average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026. The forecast assumes that the SNB policy rate is 1.25% over the entire forecast horizon. Without the rate cut, the forecast would have been lower.

Swiss GDP growth was moderate in the first quarter of 2024. The services sector continued to expand while value added in manufacturing stagnated. There was a further slight increase in unemployment. The utilisation of overall production capacity was normal. Growth is likely to remain moderate in Switzerland in the coming quarters, according to the central bank. The SNB anticipates GDP growth of around 1% this year. In this environment, unemployment is likely to continue to rise slightly, and production capacity utilisation is set to decline slightly. Over the medium term, economic activity should improve gradually, supported by somewhat stronger demand from abroad. The SNB currently expects growth of around 1.5% for 2025.

 

Treasury4 joins U.S. Bank marketplace network

Treasury4, an enterprise software platform offering treasury and finance tools, has announced it is joining the U.S. Bank Connected Partnership Network. The network is an online marketplace of fully integrated third-party payment and treasury solutions with U.S. Bank systems. It is designed to help corporate treasury teams identify and adopt technology connected to the bank, such as the Treasury4 platform.

Through this partnership, mutual customers can automate the secure ingress of both cash balances and transactions, as well as investment holdings and transactions from U.S. Bank into Cash4, the global cash management solution from Treasury4. 

In addition, customers can manage their bank accounts, sub-accounts, account signatories, and counterparty bank and branch data through Entity4, the multi-departmental system of record from Treasury4.

“Safely and securely integrating our banking and payment capabilities into the software applications that businesses use every day elegantly simplifies the experience for their end users,” said Alberto Casas, head of global treasury management products at U.S. Bank.

 

Bloomberg to offer CSRD data for financial firms ahead of reporting deadline

Bloomberg has announced the launch of a new data offering on the Bloomberg Terminal, collating the data companies have started to report in line with the EU’s Corporate Sustainability Reporting Directive (CSRD). The offering is also available via Data License for scalable enterprise-wide use.

CSRD simultaneously expands the range of firms that must disclose ESG data publicly and broadens reporting to over 1,000 metrics covering financial and impact materiality criteria. When reporting requirements start in 2025, Bloomberg's data offering should help to inform the holistic sustainability strategy of financial firms and streamline the sustainability reporting of their financing activities.

Bloomberg’s CSRD offering is based on a mapping of the European Sustainability Reporting Standards (ESRS) to existing Bloomberg data fields. The offering includes historical data for a subset of fields reported by companies voluntarily or under previous regulatory requirements. Additional fields will be created to ensure that clients can access mandatory quantitative disclosures covering both financial and impact materiality. Companies required to report in 2025 are already included in Bloomberg’s coverage, which will expand also to include the companies that will start to report in 2026.

“Better data drives better investment decisions, which is why Bloomberg is taking steps to ensure its clients will benefit from the tremendous increase in the quantity, quality and reliability of ESG data reported under CSRD,” said Patricia Torres, Global Head of Sustainable Finance Solutions at Bloomberg. “By providing high quality ESG data alongside financial data to our clients, we help them seamlessly understand the sustainability profile of their investments and streamline their reporting.”

 

Commerzbank expands credit card offering for business customers

Commerzbank AG is expanding its credit card range for business use. The bank expects business customers to be able to manage their card portfolio themselves using the fully digital solution and seamlessly integrate it into their billing processes from the third quarter of 2024 onwards. This should make it easier for companies to issue new employee cards. 

The new offer allows customers to restrict card usage, for example, for certain periods of time or purposes. The offer was implemented thanks to the close cooperation between Commerzbank, neosfer, the early-phase investor of Commerzbank, and Pliant, the Berlin start-up for credit card solutions. The cooperation was initiated by neosfer, which has worked with Pliant since 2021.

“With our new digital credit card solution, we enable our customers to make their billing processes more efficient and thus save costs and time,” explained Tobias Knoll, Head of Value Stream Accounts and Payment Methods in Commerzbank’s Private and Small-Business Customers segment.

 

Treasury Prime and FS Vector look to strengthen BaaS relationships 

Treasury Prime, an embedded banking software company, has announced its strategic partnership with regulatory advisory firm FS Vector. The partnership formalises an existing relationship between the two companies and will bring FS Vector’s regulatory compliance training platform Headmaster to the Treasury Prime Partner Marketplace.

FS Vector helps build, launch, maintain and scale Banking-as-a-Service (BaaS) platforms for banks. As a partner to fintechs, the company provides assistance with services like obtaining bank partnerships, designing and building compliance programs, and licensing acquisition and maintenance.

“Successful BaaS relationships hinge on a shared understanding of and respect for the compliance obligations that a bank and their fintech program are subject to,” said FS Vector Principal Justin Muscolino. “Our Headmaster platform provides fintechs with the education that sets these relationships up for success in a cost-effective way. We believe that compliance and risk management training should be something that employees enjoy taking, and with the Headmaster, fintechs have a user-friendly platform that makes training relevant, accurate and role-specific.”

 

Brex launches digital banking products for startups

Brex has launched digital banking products and some updates to its business account, which it says will provide start-up founders access to capital where and when they need it. This launch means the Brex spend management platform combines corporate cards, expense management, bill pay, travel booking, treasury, and banking in one vertically integrated offering.

Brex business accounts now have security features, including fraud protection, authentication tools and built-in payment approval flows, all accessible from the company’s mobile app. Customers can now access three distinct accounts within business accounts to:

• Open accounts and transfer funds worldwide with the new checking account supported by Column N.A., with no transaction fees on ACH transfers, cheques, domestic wires, and international wires in over 40 currencies. Opening a checking account can be done entirely online.
• Expand spending power with an updated and fully-integrated treasury account. This should make it simpler to oversee and manage funds and earn yield from day one with auto-transfer capabilities and no fees, minimum balance requirements, liquidity restrictions, or waiting periods.
• Safeguard capital with the updated Vault account, where funds are diversified across more than 20 programme banks with up to US$6m of total FDIC insurance.