ECB mulls QE program
Q. ECB had initiated Ogden rate changes which _____ the earnings of UK insurers.- Published on 13 Sep 17a. Slashed
b. Lowered
c. Raised
d. a and b are the same
e. None of the above
ANSWER: a and b are the same
Plans by the government to backtrack on the controversial Ogden rate changes, which have slashed the earnings of UK insurers, lifted heavily-exposed Direct Line on the FTSE 100.
The government said yesterday that if the rate, which concerns personal injury claims, were set today it would “fall within the range of 0pc to 1pc”.
This means smaller compensation claims for insurers to pay and higher earnings.
Insurers’ shares tumbled when the Government announced in February that the Ogden rate would drop to -0.75pc from 2.5pc with the fall forcing Direct Line to report significantly smaller profits and halve its dividend.
A broad-based rebound helped the wider FTSE 100 finish in positive territory for the first time this week, closing 42.85 points higher at 7396.98.
On the currency markets the pound’s stumble towards parity with the euro took further impetus after European Central Bank president Mario Draghi revealed that the Governing Council will make the “bulk” of its decisions on tapering its €60bn-a-month quantitative easing programme in October.
Despite Mr Draghi calling the euro's recent volatility and strength a "source of uncertainty", the currency pushed past $1.20 against the dollar.
The pound, meanwhile, retreated to back below €1.09, as it took another knock on its drift towards parity with the euro.
Elsewhere, the FTSE 100 snapped its losing streak and rose higher for the first time this week.
