Category Archives: Bank of England

Fujitsu won £1.4bn in new government contracts after court ruling on Post Office software bugs

Posted on by

MPs find Treasury-affiliated bodies have engaged Horizon firm since damning 2019 high court judgment

The Japanese technology company Fujitsu, whose flawed technology for the Post Office led to the wrongful prosecution of hundreds of subpostmasters, is confirmed to have held contracts worth more than £3.4bn linked to the Treasury since 2019.

Figures published by the Commons’ treasury committee show £1.4bn of contracts were awarded to Treasury-affiliated organisations after a high court ruling in December 2019 over the company’s software. The judgment found that “bugs, errors and defects” in Fujitsu’s Horizon system could cause shortfalls in Post Office branch accounts.

Continue reading...

UK workers must accept lower pay deals to help beat inflation, says Bank ratesetter

Posted on by

Deputy governor Sarah Breeden also says firms must rein in profits as there is ‘some way to go’ to meet 2% inflation target

Victory in the war on inflation will require British workers to accept lower pay deals and companies to rein in their profits, a senior Bank of England policymaker has said.

Sarah Breeden, one of the central bank’s four deputy governors, said there was still “some way to go” before inflation would fall back to the 2% target set by the government for the Bank to achieve on a sustainable basis.

Continue reading...

UK ditches post-Brexit Canada trade talks; Vodafone and Three UK merger under investigation – as it happened

Posted on by

Live, rolling coverage of business, economics and financial markets as Canada says UK was unwilling to give access to agricultural products

Shares in US chipmaker Intel have slumped in pre-market trading after it revealed a weaker forecast of earnings.

Chipmakers have been flying in recent years as shortages followed by the huge hype over artificial intelligence – which is hungry for processing power – prompted investors to pile into the sector.

Although Intel beat estimates, investors’ disappointment in Intel’s datacentre GPU story’s growth can be primarily attributed to the slower-than-expected product delivery and ramp-up.

Continue reading...

Fujitsu government contracts under scrutiny in light of Horizon scandal

Posted on by

Treasury committee writes to 21 bodies including Bank of England and HMRC to demand details of post-2019 deals

Fujitsu’s receipt of lucrative government contracts despite its role in the Post Office Horizon scandal has come under greater scrutiny after the Treasury committee wrote to organisations including the Bank of England and HM Revenue and Customs to demand details of their contracts with the tech company.

The influential group of MPs told 21 public bodies, including the Treasury itself, to provide information on work given to the Japanese-owned company since 2019, when the high court ruled there had been dozens of bugs and errors in its Horizon IT system.

Continue reading...

UK banks expect sharp rise in defaults on unsecured debt

Posted on by

Lenders forecast biggest quarterly increase in missed repayments on credit cards and loans since 2009

Business live – latest updates

Britain’s biggest high street lenders expect the sharpest rise in defaults on unsecured lending since 2009, according to a Bank of England survey, as households come under growing pressure amid the cost of living crisis.

The figures from Threadneedle Street show banks expect a marked rise in the number of people who fail to meet repayments on credit cards, loans and other forms of unsecured borrowing over the next three months.

Continue reading...

UK economy returns to growth amid Black Friday spending lift

Posted on by

GDP rises by 0.3% in November after October decline, with car leasing and video games fuelling bounceback

The UK economy returned to growth in November after a recovery in consumer spending driven by Black Friday sales, with shoppers hunting for bargains as the key Christmas shopping season got under way.

Gross domestic product rose by 0.3% on the month, after a decline of 0.3% in October, according to the Office for National Statistics (ONS). City economists had forecast more modest growth of 0.2%.

Continue reading...

UK inflation in unexpectedly steep fall to 3.9% amid lower bread and fuel prices

Posted on by

Forecast-beating drop in November takes rate to lowest level in more than two years

Britain’s two-year cost of living crisis eased last month as cheaper petrol and less expensive food helped send the annual inflation rate sharply lower to 3.9% – its second big monthly fall in succession.

In a much bigger decline than had been anticipated by economists, the annual rate of price rises fell from 4.6% in October to its lowest level since September 2021.

Continue reading...

Drop in UK inflation is welcome but does not erase two years of pain

Posted on by

Food prices were 29% higher last month than in September 2021, leaving many households still under pressure

At last, UK inflation has fallen far and fast enough to start to match countries such as France, where the annual rate of price rises has reduced at a faster pace this year.

At 3.9% last month, the headline figure remains almost double the 2% target set for the Bank of England but significantly lower than the 11.1% peak in October last year and below the 5.3% target Rishi Sunak set for the end of 2023.

Continue reading...

Bank of England keeps interest rates on hold as concern about economy grows

Posted on by

Interest rates will need to stay high for sufficiently long to return inflation to 2% target

The Bank of England has said Britain is facing a tougher job to crush persistently high inflation than other advanced nations, as it kept interest rates on hold at the highest level since the 2008 financial crisis.

Pushing back against expectations in financial markets for a deep round of interest rate cuts next year, the central bank said there was still a long way to go before it could declare victory on inflation, despite a worsening outlook for the UK’s stagnant economy.

Continue reading...

Bank of England, Fed and ECB poised to leave interest rates on hold

Posted on by

Stubbornly high inflation forces central banks to avoid cuts, but markets expect falls next year

The western world’s largest central banks are poised to keep interest rates on hold this week amid concerns over stubbornly high inflation, despite growing expectations for sharp cuts in borrowing costs next year.

In a crunch week for the global economy, the US Federal Reserve, Bank of England (BoE) and European Central Bank are expected to keep interest rates at their current restrictively high levels to ensure inflation continues to fall back from the highest levels in decades.

Continue reading...

UK employers limit hiring permanent staff amid economic stresses

Posted on by

Vacancies declining as growth falters, recruiters’ body tells Bank of England

Britain’s largest recruiters have warned the Bank of England that demand for permanent hiring among UK businesses has plunged at the second fastest rate since the pandemic, amid worsening headwinds for the UK economy.

Ahead of the central bank’s decision on interest rates on 14 December, the Recruitment and Employment Confederation (REC) trade body said lingering economic uncertainty and hesitancy to commit to new hires had weighed on activity in November.

Continue reading...

Digital pound should not be considered until risks addressed, MPs warn

Posted on by

Treasury select committee highlights concerns over data privacy and increased possibility of bank runs

The idea of creating a digital pound should not even be considered until the UK government and Bank of England address concerns over data privacy and the increased risk of bank runs, a parliamentary committee has warned.

MPs on the Treasury select committee said that while it was true that the rollout of a central bank digital currency could trigger fresh innovation and competition in the payments sector, serious questions remained about whether the positive effects outweighed the risks and costs.

Continue reading...

US economy grew faster than expected as businesses invested – business live

Posted on by

Rolling coverage of business as US revises up GDP growth in third quarter to fastest pace of 2023

At lunchtime in the UK and western Europe markets are fairly flat all around.

The UK’s benchmark FTSE 100 has barely moved, although grocery delivery company Ocado is the top gainer, up 4.8%. (An Ocado director buying shares may have helped.) Trainer retailer JD Sports was the second biggest, up 4.5%.

These allegations are false, not true, incorrect, are not accurate. And it’s an attempt to undermine the work of the COP28 presidency,

I promise you, never ever did I see these talking points that they refer to or that I ever even used such talking points in my discussions.

Continue reading...

Central banks ‘risk tipping UK and other developed countries into recession’

Posted on by

Stance on inflation poses threat to ‘soft landing’ forecast for global economy, says OECD

Continued tough action by central banks to tackle stubborn inflation risks tipping Britain and other developed countries into recession next year, the west’s leading economic thinktank has warned.

The Organisation for Economic Co-operation and Development (OECD) said the chances of policymakers getting it wrong were “pretty high” and posed a threat to its central “soft landing” forecast for the global economy.

Continue reading...

Andy Burnham claims government note shows Covid tier 3 restrictions imposed on Manchester as ‘punishment beating’ – as it happened

Posted on by

Covid tier system introduced in October 2020 and imposed different restrictions on English regions in effort to contain spread of virus. This live blog is closed

At the Covid inquiry Sadiq Khan, the mayor of London, said that he was not getting information from the government in February about Covid. He said he was “disappointed” by that.

In late February and early March he was getting information from other cities around the world instead, he said. He said this happened even though his foreign affairs team consisted of just three people.

The government generally does give us information about a variety of things happening. I’m disappointed the government weren’t giving us information in February about what they knew then.

Continue reading...

Bank of England sounds out buyers for Metro Bank including NatWest

Posted on by

JP Morgan also approached as Metro reportedly tries to thrash out rescue package with investors

The Bank of England’s regulatory arm is understood to have approached a number of big lenders in the past few days, including NatWest and JP Morgan Chase, to see if they had any interest in the embattled high street rival Metro Bank.

JP Morgan Chase examined a potential bid to take over the whole of Metro after speaking to the Prudential Regulation Authority (PRA) but decided on Saturday night not to go ahead with it, a source said.

Continue reading...

UK firms ‘slow output and rein in hiring as borrowing costs rise’

Posted on by

Survey of businesses gives further indication that Bank of England could limit future interest rate rises

Businesses are pulling back on hiring and slowing their output under the strain of rising borrowing costs, according to a study that gives a further signal that the Bank of England could limit future interest rate rises.

A modest pickup in manufacturing in August failed to prevent a slowdown in broader UK private sector economic activity, a survey of businesses by the accountancy firm BDO found.

Continue reading...

Mountain view: Bank top economist offers two routes to beating inflation

Posted on by

Huw Pill says he prefers longer, more steady use of interest rates of Table Mountain model over sharp rise and fall of Matterhorn approach

Tourist attraction, backdrop to millions of selfies and one of the world’s most easily identifiable landmarks. Cape Town’s Table Mountain is all of these things, but now it has found a new role: as a guide to what will happen to UK interest rates.

For Huw Pill the opportunity was too good to pass up. Invited by South Africa’s central bank to speak at a high-level conference, the Bank of England’s chief economist said there were two ways for Threadneedle Street to bring UK inflation back to the government’s 2% target.

Continue reading...

Risk of UK recession at next general election is 60%, says thinktank

Posted on by

Economic experts say it will take until third quarter of 2024 for output to return to pre-pandemic peak

Rishi Sunak will fight the next election against a backdrop of an economy suffering from five years of lost growth and a widening of the gap between the prosperous and less well off parts of Britain, a leading thinktank said on Wednesday.

The National Institute of Economic and Social Research (NIESR) said it would take until the third quarter of 2024 for UK output to return to its pre-pandemic peak and that there was a 60% risk of the government going to the polls during a recession.

Continue reading...

Fears of food inflation rise as UK harvests hit by cool, wet summer

Posted on by

Farmers warn wheat, oilseed rape, potatoes and other crops have been affected after wettest July on record

UK farmers have warned that harvests of wheat, oilseed rape, potatoes and other crops have been hit by the cool, wet summer, raising fears of further food price inflation.

The wettest July on record for parts of the UK risks colliding with rising prices of essential ingredients on global markets due to the ongoing conflict in Ukraine and unpredictable weather affecting harvests from southern Europe to China.

Continue reading...