the times | Friday March 18 2022 2GM 35
Business
commoditiescommodities currenciescurrencies
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140
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80Dow Jones
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$106.32 (+7.62)FTSE 100
7,385.34 (+93.66)Feb 16 24 Mar 4 14 Feb 15 24 Mar 4 14 Feb 16 24 Mar 4 14 Feb 16 24 Mar 4 14 Feb 16 24 Mar 4 14 Feb 16 24 Mar 4 148,000
7,500
7,000
6,500Mehreen Khan Economics Editor
Stocks and bond prices were buoyed
and the pound lost ground against the
dollar after the Bank of England took a
doveish stance on interest rate rises.
The Bank raised rates for the third
consecutive time yesterday as widely
expected but warned that further
monetary policy tightening would be
“modest” in the face of the economic
fallout from the war in Ukraine.
The FTSE 100 gained 1.3 per cent
while the pound fell 0.3 per cent against
the dollar to 1.311. Brent crude rose
8.8 per cent to $106.64, its biggest one-
day percentage gain since May 2020.
The UK’s ten-year borrowing costs,
as represented by the yield on bench-
mark gilts, dipped after eight members
of the nine-strong monetary policy
committee backed an increase of 25
basis points. The main Bank rate is now
back to its pre-pandemic level of 0.75
per cent. Sir Jon Cunliffe, deputy gover-
nor for financial stability, was the only
member to vote against the change.
The vote split shows a marked shift
among rate-setters, who were divided
in February over the pace of interest
rate rises. Four members had voted for
a rise of 0.5 percentage points rather
than 0.25 percentage points before
Russia’s invasion of Ukraine last month.
Policymakers struck a more cautious
note yesterday, warning that despite
rising inflation sparked by the war,
there would be a “modest tightening” of
monetary policy if “appropriate” in the
coming months. They had previously
said that rate rises would be likely.
James Athey, investment director at
HSBC may be closing down dozens
more of its branches in the real world,
but in the virtual world the bank is
embarking on an expansion drive.
It has bought a plot of virtual real
estate in The Sandbox, an online
gaming space majority-owned by the
Hong Kong-based Animoca Brands.
The bank did not say how much it
paid for the land, which it will use to
HSBC expands in the metaverse while closing high street branches
Tom Howard engage with its customers and sports
and gaming fans in the metaverse.
“The metaverse is how people will
experience the future of the internet:
Web 3.0, using immersive technologies
like augmented reality, virtual reality
and extended reality,” Suresh Balaji,
HSBC’s chief marketing officer in the
Asia-Pacific region, said.
“Through our partnership with The
Sandbox we are making our foray into
the metaverse, allowing us to create
innovative brand experiences for new
and existing customers.”
HSBC is the second global bank to
move into the virtual world after JP
Morgan, the Wall Street giant, built its
Onyx lounge in a virtual mall in
Decentraland. The lounge features a
portrait of Jamie Dimon, JP Morgan’s
chief executive.
Users in metaverse worlds can walk
around as avatars and buy land, play
games and meet friends. A JP Morganreport about the metaverse predicted
that “the virtual real estate market
could start seeing services much like in
the physical world, including credit,
mortgages and rental agreements”.
Samsung opened a version of its New
York store this year in Decentraland,
where Barbados has also built a
metaverse embassy.
HSBC’s virtual venture comes at a
time when it is retreating ever further
from Britain’s high streets. It confirmedthis week that it would close another 69
branches by October, largely because
more customers are banking online.
This will leave the group with 441 sites
across the UK.
Since the beginning of 2020, HSBC
will have shut 179 branches once the
latest round of culls has finished.
It estimates that fewer than half of its
customers still use its high street sites.
Other banks have made similar moves,
with thousands of branches closing.A slump in the sale of suits and formal-
wear during the pandemic has knocked
TM Lewin into administration for the
second time in two years.
The 124-year-old company was
bought in May 2020 by Torque Brands,
an investment vehicle led by James
Cox, the founder of Simba Sleep.
Seven weeks after paying £25 million
for the business, the new owners put
TM Lewin through a pre-pack insol-
vency process that shut all of its 66
shops and international operations and
resulted in 600 job losses.
At the time Cox blamed the impact of
lockdown for the shop closures and said
that the brand would be pursuing an
online model instead.
The shift to working from home dur-
ing the pandemic and the cancellation
of social events such as weddings meant
that trading has failed to recover as de-
mand for formal clothes has dwindled.
TM Lewin’s administrators said that the
company had run out of cash. The
Office for National Statistics said this
week that it would be dropping suits
from the basket of goods it uses to
measure inflation.
TM Lewin, founded in London in
1898, is famous for selling the first but-
ton-up shirt. During the First World
War, it supplied the RAF and army with
uniforms and the brand claims to have
sold more than 70 million shirts.
A recent administrators’ report from
its pre-pack deal found that unsecured
creditors had been left £30.4 million out
of pocket but said that Torque would
receive about 79 per cent of its money
back as secured creditor. At the time
employees were still owed £1 million.
Will Wright, head of restructuring at
Interpath Advisory, a firm spun out of
KPMG, said: “Men’s apparel — and for-
malwear in particular — has been one
of the hardest hit parts of the retail sec-
tor.” The administrators are now
looking to sell the business. Previous
suitors for TM Lewin have included
Nick Wheeler, founder of the rival
brand Charles Tyrwhitt.Future tightening will be modest, say policymakers
Bank signals
caution as it
raises rates
Abrdn asset management, said the
decision raised questions about the
Bank’s “inflation-fighting fortitude”
with consumer price rises hitting a 30-
year high in January driven by higher
food and energy prices.
The Bank warned that the Ukraine
crisis would push up inflation further
from an expected peak of 7.25 per cent
in April to 8 per cent by June, adding
that price rises could hit double digits
before the end of the year. Crucially for
its assessment on the future path of
interest rates, though, the Bank said
that it still expected inflation to fall
below its target of 2 per cent over the
next three years.
“The Bank’s focus has always been
on medium-term inflation and events
since February intensify short-term
inflation but dampen the medium-
term outlook,” Bruna Skarica, an
economist at Morgan Stanley, said.
She expects another rate rise in May,
with the Bank becoming more “data
dependent” after the summer. “We
think today’s decision shows they really
wanted to prepare the ground and
guide markets that they will not be
hiking too aggressively,” Skarica said.
Higher inflation and squeezed living
standards are expected to eventually
result in a slower pace of consumer
spending, slowing the economy and
helping to dampen inflation in the
coming years.
The Bank’s caution is in stark
contrast to the US Federal Reserve,
which has signalled six more rate rises
this year to combat 40-year highs in
inflation.
Bank keeping powder dry, pages 36-37TM LEWINTM Lewin failed to recover from lower demand even after focusing on online salesSuit seller
seeks buyer
after slump
Ashley Armstrong Retail Editor