Evening Briefing Europe: Rate Hike, Westminster Scandal, Bitcoin

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The world was drastically different the last time the Bank of England hiked interest rates: the iPhone was less than a week old; Gordon Brown was Prime Minister; the average price of a home in London was £261,000 (it’s now  £470,632). The pound dropped 1% against the dollar today when the BOE’s Monetary Policy Committee voted 7-2 to raise the bank rate by 25 basis points to 0.50 percent. But Governor Mark Carney stressed that any more hikes are probably probably some way off— Siraj Datoo

Top job. President Donald Trump is set to nominate Federal Reserve Governor Jerome Powell to head the U.S. central bank, sources say. Powell is a former private-equity executive who favors gradual rate increases and sympathizes with calls to ease financial regulations. Powell would replace Janet Yellen, who served only one term as Fed chair. It won’t be an easy job—Powell will be under pressure to sustain the pace of the U.S. economy, and the Fed will be a convenient target if things go south.

Leading the charge. Theresa May was forced to appoint a new defense secretary after Michael Fallon resigned Wednesday night citing "allegations" about his private life. The British prime minister appointed ultra-loyalist Gavin Williamson to the role. Westminster-watchers are on alert in case the latest instalment of the U.K.’s ongoing political crisis claims more scalps.

Up, up, and away. Bitcoin climbed past $7,000 for the first time on Thursday, breaching yet another milestone less than a month after it passed $5,000. The cryptocurrency is on a record rally, up as much as 640 percent this year and now worth more than $100 billion. It got a boost this week when CME Group, the world’s largest exchange owner, said it plans to introduce bitcoin futures by the end of the year.

Sell! Prominent Republican donor Robert Mercer has decided to sell his stake in Breitbart News to his daughters as he looks to distance himself from controversy over his political ties to associates of President Donald Trump. He told staff at Renaissance Technologies that he made the decision “for personal reasons,” adding that while he has “great respect” for Stephen Bannon, their views don't always align. Mercer said he also planned to step down as co-chief executive offer at the secretive firm.

Turnaround. Tidjane Thiam is no longer a man under siege. The Credit Suisse CEO took over in 2015 amid calls to reshape the bank, and he’s done just that. Thiam cut costs and thousands of jobs while reducing the bank’s reliance on volatile trading in favor of more stable wealth management. Net new money rose 8 percent to 10.4 billion francs ($10.4 billion) in the third quarter, and a $4.3 billion share sale earlier this year bolstered the balance sheet.

Predicting the future. In 2013, real estate developer Knight Dragon bought a 150-acre chunk of land on a peninsula across the river from Canary Wharf, home to many of London’s banks and financial institutions. The 30-year plan is ambitious: Build a city within a city, with more than 15,000 housing units and 3.5 million square feet filled with hotels, retail, and schools. But Greenwich Peninsula has already run into a critical challenge, with the uncertainty of Brexit and the possibility of an exodus of finance workers.

Compiled by Siraj Datoo and Leila Taha

©2017 Bloomberg L.P.

With assistance from Editorial Board

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