ALEX BRUMMER: Borrowers set for a shock amid rush to higher rates

Markets generally don’t look to the Swedish Riksbank for interest rate leadership, even though it has a legacy that predates the Bank of England.

A full percentage point increase to 1.75 percent as Stockholm struggles with 9 percent inflation reflects a tightened approach to monetary policy in the G20.

The Riksbank’s intervention comes amid political uncertainty as a coalition government is formed, including far-right Swedish Democrats.

The new Swedish government has a tax cut agenda. It shares that with Liz Truss, who makes it clear that when it comes to taxation in the UK, everything is under review.

We already know that the increase in national insurance schemes will go hand in hand with the increase in corporation tax next year.

When Truss was Chief Secretary of the Treasury under Philip Hammond, her radical instincts were suppressed by the Mandarins. Now she takes revenge.

One of the consequences of easing fiscal policy is that monetary policy will have to take more of the burden. In the US, the Federal Reserve is expected to raise its key federal funds rate by at least 0.75 percentage points today from the current range of 2.25 percent to 2.5 percent. There are now some market predictions that US interest rates could rise to 4.5 percent early next year.

When it comes to global finance, the UK is far from an island. The Bank of England does not seek to control the exchange rate.

But at or near the 1985 low against the dollar, it would be surprising if it didn’t pay attention.

The Bank’s Monetary Policy Committee, which sets interest rates, will be informed – if practice permits – by the non-voting presence of the Treasury about the direction of the forthcoming mini-budget.

The £140 billion aid package for energy bills will have a profound effect on consumer prices, driving them down by as much as 4 to 5 per cent.

Abolishing national insurance contributions will also ease pressure on the cost of living.

Nevertheless, the Bank, which was so timid at the start of the new inflation spiral, as loans and debt bubble up, may feel the need to go bolder than the half-point rise many had predicted. Yields on the UK government’s five-year and two-year stocks are rising.

Mortgage and other borrowers should prepare for a shock.

Sporty life

The changing of the guard at Frasers doesn’t seem like a change at all.

Mike Ashley will still have a 69 per cent stake in the company he founded as Sports Direct and will no doubt enjoy the occasional pint with his son-in-law Michael Murray, who now runs the helm.

Ashley’s departure will be seen as a good thing by critics. His free-spirited management clashed with executives and the treatment of some of his colleagues at the Shirebrook warehouse in Derbyshire was disgraceful.

Yet one cannot help but admire his entrepreneurship. He was the last resort on the High Street, buying franchises and brands from Evans Cycles to House of Fraser that might otherwise have died.

He has also never been afraid to invest in his suppliers and has at various times held interests in Adidas and more recently Hugo Boss. His no-nonsense retail model may have upset some sensitivities.

Turning the ground floor of the chic Lillywhites sports center into a cheap T-shirt and tracksuit was seen as sacrilege.

But in an era when so many high street businesses have perished on the pincer movement of corporate rates and online rivals, it has survived. Frasers, with its high discounts, is indeed a good fit for an era of tight incomes.

If he’s really gone beyond the horizon, he might be missed.

Creative tension

Channel 4’s ownership structure and business model has always been curious.

It is technically owned by the government and most of its revenue comes from advertising and sales of programs commissioned by independent producers.

Less than friendly coverage of Tory policy in its news and documentary output made it an easy target for Boris Johnson’s government.

The actual sales process, performed by JP Morgan, may be more work than it’s worth in today’s uncertain markets. There is a good chance that C4 will end up in the hands of ITV or a foreign trade buyer.

That would not be the best outcome for the British creative industry.