ECB cuts interest rates to support flagging eurozone economy

Fall in inflation enables central bank to bring in quarter point cut to 3.25% after business and consumer slowdown

The European Central Bank has intervened to prevent a sharp slowdown in the eurozone economy with its first back-to-back interest rate cut since the euro crisis in 2011.

With Germany on the brink of a recession and inflation tumbling across the 20 member single currency bloc, the ECB followed a reduction in the cost of borrowing at its previous meeting in September with a further 0.25 percentage point cut in its key deposit rate to 3.25%.

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Surprise fall in UK inflation badly timed for benefit recipients

Payments such as universal credit linked to previous September’s figure, meaning a rise of just 1.7% in April

Last month’s surprise fall in UK inflation lands with bad timing for millions of people who receive state benefits linked to the figure, who can now expect their payments to rise by just 1.7% next April.

A number of benefits, including universal credit, are increased each tax year in line with the cost of living figure for the previous September.

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UK inflation falls below 2% for first time since 2021 in boost to Rachel Reeves

Surprise annual drop to 1.7% in September raises chance of interest rate cuts, increasing budget leeway

Inflation in the UK has fallen to its lowest level in three and a half years, giving a pre-budget boost to Rachel Reeves as expectations grow for the Bank of England to cut interest rates.

Figures from the Office for National Statistics show the consumer prices index dropped sharply to 1.7%, down from 2.2% in August, in a bigger fall than anticipated in financial markets, driven by lower air fares and petrol prices.

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Assange says he is free because he ‘pled guilty to journalism’ – as it happened

This blog is now closed

National weather forecasts

Sticking with the weather, here’s a look at the forecasts across Australia’s capital cities today:

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Australia’s housing crisis may be starting to ease as home prices fall in four capital cities

New data also shows auction figures softening while rent rises are at their slowest pace in years

Australia’s housing crisis may be starting to ease with dwelling price rises tapering off and rents increasing at their slowest pace in four years, data groups say.

Property values increased 0.4% in September, close to the 0.3% rise recorded for both the previous two months, CoreLogic reported. PropTrack’s housing index was basically flat, rising just 0.04% for the month.

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Poverty in Argentina soars to over 50% as Milei’s austerity measures hit hard

Far-right president has been battling inflation by imposing steep cuts in spending, resulting in widespread poverty

Argentina’s poverty rate has soared to almost 53% in the first six months of Javier Milei’s presidency, offering the first hard evidence of how the far-right libertarian’s tough austerity measures are hitting the population.

The new poverty rate, reported by the government’s statistics agency on Thursday, is the highest level for two decades, when the country reeled from a catastrophic economic crisis, and means 3.4 million Argentinians have been pushed into poverty this year.

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Stock markets hit record highs after news of a fall in US inflation

S&P 500 index of major US companies registers near 100% gain on year ago amid expectation of interest rate cuts

A fall in US inflation expected to pave the way for further cuts in interest rates pushed stock markets to record highs on Friday.

Ending a week of gains that began when the Chinese authorities approved a huge economic stimulus package, the S&P 500 index of major US companies soared above 5,750 to register a near 100% gain on a year ago.

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UK economy to grow faster than Japan, Italy and Germany this year, says OECD

Forecast upgrades UK to joint second after US but it is still expected to have highest inflation among G7 countries

The global economy is “turning a corner”, according to the Organisation for Economic Cooperation and Development, which has upgraded the UK’s growth forecast for this year to faster than that of Japan, Italy and Germany.

The OECD’s latest outlook ranked Britain joint second among the G7 developed countries in its latest outlook for the world economy. However, the UK is still expected to have the highest inflation in the group.

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Bank of England keeps interest rates unchanged at 5%

Policymakers vote 8-1 against back-to-back cuts in borrowing costs after inflation stayed above Bank target

The Bank of England has kept interest rates unchanged at 5% as it put its efforts to ease the pressure on household budgets on hold.

The Bank’s monetary policy committee (MPC) voted by a majority of eight to one against launching a back-to-back reduction in borrowing costs amid concerns over lingering inflationary pressures.

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UK inflation stays at 2.2% as lower petrol prices offset by higher air fares

Annual rate in August unchanged, and hovering above Bank of England’s 2% target

The UK’s annual inflation rate rose by 2.2% in August, matching the increase in July, as lower petrol prices at the pump were offset by higher air fares.

Figures from the Office for National Statistics (ONS) show the government’s preferred measure of the cost of living remained steady, matching forecasts by City economists and hovering just above the Bank of England’s 2% target.

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Despite all the doom and gloom on Australia’s economy, could the worst be behind us?

We hear about the ‘weakest growth in decades’ and being ‘smashed’ by the RBA, but positive tidings abound – if you want to look for them

In a week dominated by headlines declaring the “weakest growth in decades” (excluding Covid) with an economy being “smashed” by the Reserve Bank, it might seem Australia teeters on the edge on an abyss.

For some households and businesses, the challenge of paying stratospheric housing costs amid 13-year-high interest rates will alas be overwhelming.

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UK shop prices fall year on year for first time since cost of living crisis began

Prices down 0.3% in first week of August as food inflation eases and retailers attempt to shift unsold summer stock

UK shop prices have dropped for the first time since the cost of living crisis began nearly three years ago, as food inflation eased and retailers offered discounts on clothes and household goods to shift unsold summer stock.

New data showed prices were down 0.3% in the first week of August, compared with the same period last year. That compares to a 0.2% rise in July, and the three-month average of 0%.

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Social housing rents to rise as part of UK push to build affordable homes

Rachel Reeves works on plan for 10-year formula to give councils and housing associations certainty

Social housing rents will rise by more than inflation over the next decade as part of UK government plans to boost affordable housebuilding and shore up the finances of struggling landlords.

The chancellor, Rachel Reeves, is working on plans to introduce a 10-year formula to calculate social rent on homes that will result in rents increasing every year by the rate of the consumer prices index – which is now 2.2% – plus 1%, removing an existing cap on rises.

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Australia news live: Palaszczuk appointed to Australia Post board; Shorten says Dutton ‘implying all Gazans are terrorists’

Palaszczuk, who retired from politics in December after almost nine years as QLD premier, will serve a three-year term as a non-executive director. Follow today’s news headlines live

‘We have to have a constant reminder’

The committee also called for a culturally appropriate and nationally significant recognition and remembrance of murdered and disappeared First Nations women and children. Dorinda Cox said this would be “significant” if the government accepted the recommendation:

It would … have some permanent features to remind us the role that history has played for missing and murdered or disappeared women and children and First Nations women and children in this country, because there’s a story there that needs to be told, and we have to have a constant reminder.

Like we do … with the Australian war memorial of the safety that we have as a country, but also that this part of our history – this is now ingrained in and sketched into. And if we want to continue to work on this and continue to maintain safety for women and children and the most vulnerable, which is First Nations – as we know, we’re in an emergency for all women, but First Nations women and children are at the front of that – we have to have some permanent features, otherwise we become invisible.

What we hear too often is that this is a state and territory problem. States are responsible for their police forces, in particular … We have to centre our approaches and our outcomes in [addressing these issues] and we have to look at the culture of the organisations, such as police.

There’s lots of reporting on the media in relation to the attitudes of police across Australia, and that has to get better, but we have to have a measure against that – we can’t just put in the attorney general [to] have a chat to the police ministers, and nothing changes … Because if we don’t look at this in a way of wanting change, nothing ever changes.

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Battle against UK inflation is far from over, says Bank of England policymaker

Catherine Mann says Britain should not be ‘seduced’ by price rises easing to the BoE’s target

The UK should not be “seduced” into thinking the battle to calm inflation is over despite price rises easing to the Bank of England’s target, according to an interest rate setter at the central bank.

Catherine Mann, a member of the Bank’s monetary policy committee, said the underlying price pressures in the economy remain strong and showed that the central bank needed to take a tough stance when it sets interest rates.

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Jobs market and pay growth are cooling off, large UK employers and recruiters warn

Survey reveals net fall in permanent jobs last month amid lengthening slowdown in employment market

The UK’s largest employers have warned the jobs market is cooling amid a slowdown in wage growth in July and a fall in vacancies, extending an almost two-year downturn in hiring demand for permanent staff.

Figures from the Recruitment and Employment Confederation (REC) and the accountancy firm KPMG showed a fall in permanent staff placements in July as large employers made more redundancies and hired fewer new starters.

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Anyone hoping for lower interest rates any time soon will be dismayed by RBA chief’s media conference

Governor Michele Bullock makes clear any expectation of interest rate cuts this year ‘not aligned’ with bank’s present thinking

Those hoping for lower interest rates soon – whether stressed borrowers or those in the Albanese government itching for an early election – would have been dismayed by the Reserve Bank of Australia governor Michele Bullock’s media conference on Tuesday.

The RBA board had just wrapped up the eighth meeting under her leadership and considered just two options for its key interest rate: “hold for some time” or another rate hike. A rate cut was not up for discussion.

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Weak US jobs growth for July sparks Wall Street sell-off

US economy added 114,000 jobs in July in significant dip from June while unemployment increased to highest level since October 2021

The US labor market cooled significantly last month as unemployment unexpectedly rose, sparking fears of a slowdown across the world’s largest economy.

American employers added 114,000 jobs in July – short of the 180,000 additions expected by economists, and a marked decrease from the 179,000 added in June.

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Relief for borrowers as UK interest rates cut but little sign big reductions to come

Incremental cuts likely over two to three years with rates expected to stay well above pre-Covid levels of 0.75%

Borrowers will breathe a collective sigh of relief. The Bank of England has cut interest rates by a quarter point to 5% and major lenders are shaving their best-buy mortgage offers in response.

Those wanting to get on the housing ladder should find property slightly more affordable after the cut, which ends a year of ultra-high borrowing costs and is the first rate cut in more than four years.

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Labour facing moment of truth over tax pledges, economists warn

Experts say 5.5% pay increase for public sector not ‘consistent’ with spending plans that rule out tax rises

Labour is fast approaching a moment of truth over its election pledges on tax and spending, experts have warned, after Rachel Reeves indicated the government could agree above-inflation pay rises for public sector staff.

The chancellor promised a full statement on pay board recommendations that teachers and NHS workers should receive 5.5% pay awards, ahead of an autumn budget that is set to be one of the most difficult economic balancing acts in years.

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