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...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...Critics say Bank should pay less attention to economic models and more to what is happening on the ground
With Thursday’s 0.5 percentage point increase in interest rates to 5%, the Bank of England is hoping to land a knockout blow against inflation.
The latest hike is an admission that 12 rises over more than 18 months have not been enough to tackle the problem. Or, as the minutes said, the impact of shocks from Covid and the energy price crisis “were likely to take longer to unwind than they had done to emerge”, adding that the risks of inflation remaining high “were skewed to the upside”.
Continue reading...Tim Martin says Bank of England is right to ask firms to be mindful but advice should not be taken too literally
The boss of JD Wetherspoon has warned it could be “catastrophic” for pubs and restaurants to hold off raising prices as costs continue to soar, as the pub chain revealed that the “ferocious” impact of inflation has fuelled a dramatic increase in its bills.
Tim Martin said that Andrew Bailey, the governor of the Bank of England, was right to warn companies to be mindful of how much they put up prices to avoid continuing to fuel an inflationary cycle, after the headline annual rate unexpectedly rose to 10.4% last month.
Continue reading...Rishi Sunak and Jeremy Hunt explore options to help tech and life sciences sectors
The UK government is scrambling to secure an emergency deal to protect Britain’s tech and life sciences sectors from major losses after the collapse of Silicon Valley Bank (SVB), as financial markets braced for further volatility after the biggest bank failure since 2008.
The prime minister, Rishi Sunak, and the chancellor, Jeremy Hunt, signalled on Sunday that they were exploring a range of options, including an emergency fund that could provide a cash lifeline to support startups, as bidders put their hat in the ring for a potential takeover of the UK subsidiary.
Continue reading...Health secretary says Truss did not focus too much on rewarding friends as new ministers attend first cabinet meeting
According to a report by Jason Groves in the Daily Mail, Liz Truss may announce an end to the ban on fracking this week. During the leadership campaign she said she wanted to allow fracking, but only in areas where there was a clear public consensus in favour.
On the Today programme this morning Lord Deben, the Tory peer who chairs the Committee for Climate Change, said fracking was not a solution to the UK’s energy problems. He explained:
The price of gas is not affected by the relatively small amount that we can get, in addition to the North Sea or indeed from fracking.
This is an international price and we would be paying the same price we got out of the fracked gas as we are for the gas we’re using now.
Continue reading...Labour’s Rachel Reeves says Conservatives are ‘playing blame game’ for UK’s economic problems
Liz Truss has been accused of being “deeply irresponsible” for threatening to tinker with the Bank of England’s mandate on the brink of a recession.
The shadow chancellor, Rachel Reeves, attacked the Tory leadership frontrunner after Truss and her allies repeatedly questioned the performance of the Bank’s governor, Andrew Bailey, and said she would review the institution’s remit.
Continue reading...Latest updates: Maroš Šefčovič responds to Truss, saying EU keen to reach a settlement but stresses UK actions raise ‘significant concerns’
In the Commons the government chief whip, Chris Heaton-Harris, has just moved the writ for two forthcoming byelections - in Wakefield, and in Tiverton and Honiton.
Both byelections are expected to be held on Thursday 23 June - the sixth anniversary of the Brexit referendum.
Under pressure from some Conservative MPs, some of whom have been threatening to write letters of no confidence in Boris Johnson unless they get their way, ministers have retreated from banning “Buy One Get One Free” deals and from imposing a watershed of 9pm on junk food advertising. While some measures, such as rules on the positioning of unhealthy foods by retailers, will still go ahead in October, this U-turn adds to the long history of failed obesity strategies.
Humans evolved, when food was scarce, to indulge in calorie-dense foods if the opportunity arose. Now, the abundance of food and its particularly highly processed nature, which means we go on eating for a long time before feeling full, leads us to eat a lot of the wrong things. Food companies have an overwhelming incentive to design products that lead us ever further down this chemically induced addiction to foods that make us overweight, more prone to disease, and less able to work and enjoy life to the full. This is not freedom ...
Freedom is, most crucially, being free from oppression, violence or discrimination. But it is also the freedom of a child to skip and somersault; of an adult to enjoy running down a country lane or in a city park; of an old person to keep their quality of life until their final days ... These are the freedoms being denied to vast numbers of people who are the victims, not the free agents, in a system that wants to fill them up with salt, sugar and saturated fat.
It is therefore a terrible error to associate conservatism with a reluctance to protect people from their natural appetites being abused, in an industrial age for which they were not designed. If we could liberate more people from that fate, they could enjoy greater personal freedom and have some chance of a lighter tax burden.
MPs who have pressed, seemingly successfully, for the dilution of the obesity strategy are profoundly mistaken. They are acquiescing in a future of higher dependence, greater costs, reduced lifestyle choice and endless pain. For the government to give in to them is intellectually shallow, politically weak and morally reprehensible.
Continue reading...Latest updates: UK prime minister meets Sinn Féin and DUP as Mary Lou McDonald suggests forming Stormont assembly is not UK government priority
This is from my colleague Jennifer Rankin in Brussels on the UK government’s mixed messaging over the Northern Ireland protocol.
Taoiseach Micheál Martin and Sinn Féin’s leader in Northern Ireland, Michelle O’Neill, have said they recognise there are “serious issues” in relation to the implementation of the Brexit protocol that Boris Johnson is planning to override in part.
They expressed serious concern about possible unilateral moves on the protocol by the British government, which would have a destabilising impact on Northern Ireland.
They recognised that there are genuine issues regarding aspects of the implementation of the protocol but these can be taken forward in the context of EU-UK discussions.
Continue reading...Bank of England’s Andrew Bailey blames UK’s highest inflation rate for three decades on Russia-Ukraine war
The Bank of England governor has blamed the war in Ukraine for the highest inflation in the UK for three decades and warned that “apocalyptic” food prices caused by Russia’s invasion could have a disastrous impact on the world’s poor.
Giving evidence to MPs, Andrew Bailey said while he was unhappy about the level of price rises, 80% of the inflation overshoot was caused by factors outside the Bank’s control.
Continue reading...Andrew Bailey said failure to agree to deal would cause long-term damage to UK economy
The governor of the Bank of England, Andrew Bailey, has warned that the economic cost of a no-deal Brexit would be bigger in the long term than the damage caused by Covid-19.
Bailey said failure to agree to a deal before the Brexit transition expires at the end of December would cause disruption to cross-border trade and damage the goodwill between London and Brussels needed to build a future economic partnership.
Continue reading...Quantitative easing stimulus is equivalent to almost 2% off interest rates
The Bank of England has gone all in. By cutting interest rates to 0.1% and announcing a fresh £200bn of money creation via its quantitative easing programme it has fired all the conventional weapons in its arsenal.
There will be some who say this is all reminiscent of the Beyond the Fringe sketch where Peter Cook demands “a futile gesture” to raise the whole tone of the war. Others will saythe Bank’s new governor Andrew Bailey had no choice given the state of the markets and the imminent lockdown in London. Bailey has had a good first week in the job.
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