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The Bank of England

On the face of it, little has changed after the latest meeting of the Bank of England's Monetary Policy Committee (MPC). The base rate remains at 0.1% and the Bank will maintain the pace at which it is pumping stimulus into the economy. In to the Chancellor, Governor Andrew Bailey stuck to the line that inflation - which the MPC admits might hit 4% before the year end - should resolve itself.

The meeting present a more hawkish picture and open the door to a rise in the base rate sooner than thought possible even a month ago. The MPC now agrees that any tightening of policy should come in the form of a hike in the Bank rate, even if that comes before the current round of quantitative easing (QE) concludes around the end of the year. Two of the nine members of the MPC voted to scrap the final round of QE in the face of rising inflation, up from one at last month's meeting.

The path of borrowing costs looks pretty clear, though the trajectory remains uncertain. Markets are betting the MPC will vote to raise the base rate to 0.25% in February 2022, followed by another hike in August, according to .

Stagflation

With the MPC's meeting minutes comes , which the BOE's regional agents compile following discussions with 700-odd companies. This edition reveals construction output remains above pre-pandemic levels, however materials and labour shortages are beginning to drag on activity.

Indeed, though private housing output remains strong and there were some signs of increased demand for office refurbishments, uncertainty over materials costs and shortages were deterring some construction firms and clients from competing for tenders or from putting out contracts to tender. That looks like it will weigh on output during the colder months ahead.

Consumers are also feeling the frost. Worries over gas bills, food costs and potential tax rises led to a notable drop in consumer confidence this month, according to the latest . The index is closely monitored as a leading indicator of consumer spending.

To top all that off, the IHS Markit Purchasing Managers Index showed another loss of momentum in the private sector, with output and new orders growing at their weakest rate in seven months. Chris Williamson, Chief Business Economist at the group said the data "will add to worries that the UK economy is heading towards a bout of 鈥榮tagflation鈥�, with growth continuing to trend lower while prices surge ever higher."

Evergrande

Bad news: on Wednesday I said that the fate of heavily indebted developer Evergrande is looking a little less like China's "Lehman moment" after it agreed to make a key interest payment. What a difference two days make. Evergrande just failed to make that key interest payment so maybe things are looking like China's "Lehman moment".

With the Chinese government remaining coy as to whether it will step in to rescue Evergrande, the next question is the extent to which the world's financial institutions are exposed.

Better news: Bloomberg has been of the world's biggest banks to reassure their investors and Reuters has with Bank of England Deputy Governor Sam Woods, who seems unconcerned about any potential impact on the UK economy.

"The direct exposures of the UK banks and insurance companies to Evergrande are not material, so it's really not a concern in the first round effect," he said.

Air pollution

The World Health Organisation this week published rigorous that it says could save millions of lives each year.

Exposure to air pollution is estimated to cause 7 million premature deaths each year and results in the loss of millions more healthy years of life. That, according to the WHO, puts it on par with other major global health risks such as unhealthy diet and tobacco smoking.

Global cities get a big 'F' when measured against the new guidelines, according to Greenpeace of IQAir data. In fact, not a single one of the world's 100 largest cities would meet the standard as things are at the moment.

Meanwhile, after analysing 4 million companies and 1,600 banks in Europe over the next 30 years, the European Central Bank that the cost of floods and wildfires caused by climate change will dwarf the costs associated with transitioning to a low carbon economy. Here's the FT for those of you without the time to read the 91-page report. A worst-case scenario could knock 10% off Europe鈥檚 economic output.

Italy

Italy was among the top five second home destinations in our recent survey of more than 900 clients. Meanwhile low ownership costs and growing interest in Italy鈥檚 flat tax initiative pushed new enquiries for homes up 76% between January and April, according to 博鱼体育集团 Frank data.

Kate Everett-Allen highlights five key trends driving the market, including where the current hot spots are.

In other news...

Tilda Mwai reveals what's driving the office market in Nairobi and Andrew Shirley speaks to Luci Stephens of Clarendon Fine Art about of street art.

Elsewhere - more Federal Reserve officials see in 2022, Wall Street鈥檚 return to the office is bringing with it confusion, anxiety and , Berlin's referendum could of the city's housing, Europe's economy is , IMF to implement lending curbs in an attempt to cool house prices, and finally, Citi points to in Chinese property.