Rate cut unlikely until 2025 as energy prices blamed for stronger-than-expected inflation of 2.3%
Any lingering hope that the Bank of England might deliver a pre-Christmas interest rate cut next month appears to have evaporated, after official data showed inflation jumping to 2.3% in October.
The CPI measure had been expected to tick up, after dipping to 1.7% in September, but 2.3% was stronger than expected.
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First investment announced as part of National Reconstruction Fund
The science and industry minister, Ed Husic, was on ABC News Breakfast to discuss the government’s first investment via the National Reconstruction Fund – $40m to a Toowoomba mineral processing factory.
The difference in terms of what the [NRF] does is it provides loans, equity, and guarantees to firms that are [working across] seven priority areas to expand and grow their operations.
Given the sizes of the investments, it does take more time to be able to go through to shape up what the investment will look like, how big it’ll be, over what term, the rate of return – because the other important thing to stress to viewers is – this is not about handing out grants, and certainly not doing it on the basis of political colour-coded spreadsheets as we saw with the last government.
In fact, the social media users were less likely to have a negative attitude towards Jewish and Muslim people, irrespective of where they were on the political spectrum.
Continue reading...PM says budget stabilised the economy, while mortgage rates are ‘individual decisions for the banks’
Keir Starmer has conceded he was disappointed in the UK growth figures last week, but denied that his government’s budget was responsible for a recent rise in mortgage rates.
The prime minister told journalists travelling to the G20 summit in Rio: “What we have done with the budget is to stabilise the economy and that, in my view, was the essential first step.
Continue reading...Mel Stride said there must be no suggestion of the UK going back into the EU single market or customs union
In news that will disappoint those of you who enjoy a Liberal Democrat stunt, PA has just reported that Ed Davey will not, as was planned, be taking a bus-driving lesson at a depot in Oxfordshire, due to logistical issues. Instead he will be visiting high-street businesses.
It is part of a campaign by the Liberal Democrats to get Labour to keep the bus fare price cap at £2 in England when it extends the scheme into next year.
The fare cap increase is like a bus tax for people across the country, impacting bus users and commuters already struggling to make ends meet. MPs must be given a say on this bus fare hike on behalf of their constituents.
Our communities have already paid too high a price for years of Conservative neglect and incompetence. This bus fare hike will hit cherished local businesses and high streets, many of which are already struggling.
Uncertainty around Labour’s first budget and high interest rates played their part, but [the GDP figures are] still a blow for Rachel Reeves, as [it] underlines difficulty of reaching her ambitious growth target.
Some in Labour want to recalibrate economic focus away from growth and towards cost of living ie “will people feel better off by time of next election?”
Continue reading...Rare agreement among forecasters gives 96% chance of today’s MPC meeting cutting borrowing costs to 4.75%
The Bank of England policymakers are widely expected to cut borrowing costs for businesses and homeowners by reducing official interest rates from 5% to 4.75% when they meet later today.
Financial markets are overwhelmingly forecasting that the Bank’s nine-strong monetary policy committee (MPC) will reduce rates for a second time when it announces its latest decision at noon.
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‘We need to extend the average time people stay in our defence force,’ says Matt Keough
The defence personnel minister, Matt Keough, has also been talking about that retention and renumeration package for defence.
We need to extend the average time people stay in our defence force.
That does mean it had a vulnerability. We’re looking at moving to more of a mesh-type arrangement of satellites, which provides greater resilience, with a more up-to-date technology, and we’ll be able to deliver the technology faster as well.
We are very much confident that we can meet these targets and that’s because we have properly funded them and we have a plan to get there, which is about really improving the terms of service for those who work in our defence forces.
We’re increasing and expanding the bonuses for continuing on in the defence force. We’re continuing the original retention bonus after your initial service obligation for three years and beyond that. There will be another bonus for people who stay in the defence force after that. And that’s really targeting those who are in their seventh, eighth, ninth years of service, which gets to the middle ranks where we’ve got an issue. And we’re also going to grow the active reserves so there are more opportunities for people in the reserve to do full-time or part-time work in the defence force.
This original plan goes back seven or eight years and it was about having two or three satellites above Australia to deliver that capability. Since then, we have seen technologies develop which can shoot satellites out of the sky but we have also seen technologies develop where you have thousands of micro satellites in a more distributed way providing the same effect and we are seeing that with Starlink above Ukraine.
Continue reading...Economists at investment bank say markets are underestimating likely extent of action by Bank of England
Interest rates are on course to fall to 2.75% by next autumn after the Bank of England reduces the cost of borrowing at each of its nine next meetings, a leading investment bank has predicted.
Economists at Goldman Sachs said that, according to their assessment of the long-term level of interest rates consistent with achieving the government’s 2% inflation target, markets were underestimating the likely extent of the action by Threadneedle Street’s nine-strong monetary policy committee (MPC).
Continue reading...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.
Continue reading...Australia’s interest rate is forecast to fall from 4.35% to 3.6% by this time next year, prompting seven lenders to cut their rates this week
Lenders have started lowering their mortgage rates en masse influenced by expectations of future interest rate cuts by the Reserve Bank – moves that could tempt borrowers to restructure their home loans.
The downward drift in rates is especially prevalent in fixed loans, with seven lenders cutting their rates by an average of 0.3 percentage points over the past week, according to Canstar. Four lenders cut variable rates by smaller margins.
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Continue reading...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.
Continue reading...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.
Continue reading...Vast majority of borrowers servicing their debts but arrears could grow if economy slows more than expected, bank says
The number of Australians in financial stress is “small” but will be “magnified” if the economy slows more than expected or interest rates linger higher for longer, the Reserve Bank has warned.
While overseas challenges – including a faltering Chinese economy – could also upset forecasts, Australia’s financial system continued “to display a high level of resilience”, the bank said in its semi-annual financial stability review.
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Continue reading...There was good news and bad news as Australia’s central bank held the interest rate steady for the seventh time in a row
The good news is the Reserve Bank is all but done lifting interest rates. Less good news is that the central bank is also not about to cut them.
Those were probably the key takeaways from the RBA’s sixth board meeting of 2024 and the seventh since it last slugged borrowers with it’s last cash rate hike.
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Peter Hannam is Guardian Australia’s economics correspondent
Continue reading...RBA decision was in line with economists’ forecasts as economy endures persistent inflationary pressures
The governor of the Reserve Bank, Michele Bullock, says she does not see interest rate cuts “in the near term” as the central bank waits for clearer evidence inflation is in retreat before it begins cutting borrowing costs.
The RBA ended its latest two-day board meeting on Tuesday by keeping its cash rate at 4.35%, the level its remained since November. The decision was as economists had expected.
Continue reading...Economic activity was ‘a little bit softer’ than central bank had predicted, one expert notes, but a rate cut still seems unlikely
How soon the Reserve Bank might cut interest rates will be the focus for borrowers and economists alike when the central bank wraps up its latest meeting on Tuesday.
Governor Michele Bullock is expected to keep the RBA’s key rate unchanged for a seventh meeting in a row, according to a survey of 45 economists by Reuters. The bank lifted the rate 13 times between May 2022 and last November.
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Continue reading...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.
Continue reading...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.
Continue reading...Pre-election slowdown continues in July despite economists predicting growth of 0.2%
The anticipated post-election bounceback in the UK economy failed to materialise as activity flatlined in July for a second month, , according to the latest official data.
The Office for National Statistics (ONS) said the pre-election stalling of activity in June was followed by another month in which gross domestic product remained unchanged.
Continue reading...However poll shows majority back Labor’s plan to cap international students enrolments in tertiary education
More voters are blaming the Albanese government for interest rate rises but Labor appears to have hit the electoral sweet spot with its proposed cap on international student enrolments.
Those are the conclusions of the latest Guardian Essential poll of 1,132 voters conducted after a week of debate about whether the Reserve Bank should begin cutting interest rates due to extremely soft growth.
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Continue reading...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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