Bank of England says it could lower interest rates more than expected, but June cut isn’t ‘fait accompli’ – business live

Bank of England governor Andrew Bailey is briefing reporters after BoE left UK interest rates on hold again in a dramatic 7-2 split

The pound is slightly lower this morning, dipping by a quarter of a cent to $1.2472 against the US dollar.

It could be more volatile when the Bank of England announces its decision on interest rates at noon, as Fiona Cincotta, senior financial market analyst at City Index, explains:

“The pound is falling for a third straight day amid US dollar strength and ahead of the Bank of England interest rate decision.

The central bank is widely expected to keep interest rates at 5.25% but could start to prepare for a rate cut in the coming months. Inflation in the UK was 3.2% in March YoY and is expected to continue cooling towards the central bank’s target of 2% in April.

Even with overall revenue down, it seems the message is not to panic as most of ITV’s releases are weighted to H2 and the Euros are coming up in the summer which will give a much needed boost to the coffers in terms of viewer numbers and in turn advertising revenue. Investors may be a little wary though as the firm heavily relies on this pipeline of shows to offset this sluggish start to the year, hampered by the US writers’ and actors’ strikes.

“More and more we consume our viewing content on streaming services online and ITV has made some marked improvements in this area with ITVX also a bright spot with growth in online ad revenue there.

UK interest rates are close to a descent – maybe starting as soon as next month

It seems just matter of time before the two MPC members already in favour of a cut are joined off Table Mountain

• Business live – latest updates

Huw Pill, the Bank of England’s chief economist, said last year that the path of interest rates was likely to mirror the shape of South Africa’s Table Mountain: steep-sided but with a plateau at the summit.

Judging by the Bank’s latest monetary policy report, Pill and the other eight members of Threadneedle Street’s monetary policy committee (MPC) are now only a few short steps from starting their descent from the mountain top. But they are not quite there yet.

Bank of England keeps interest rates at 5.25% but hints at a June cut

Policymakers say they want to see more evidence that price pressures are easing before reducing rates

• Business live – latest updates

The Bank of England has signalled it could start cutting interest rates as early as June after inflation was found to be “moving in the right direction”, as it kept borrowing costs on hold at 5.25% for the sixth time in a row.

Alongside the decision to keep rates on hold, the Bank said inflation was already on course to hit its target of 2% and would fall to just 1.6% in two years, opening the door to future cuts in interest rates.

Tax rises will follow UK election unless fiscal rules are ripped up, says thinktank

Niesr says current limits on government borrowing fail to stimulate growth and hinder net zero ambitions

The next government will be forced to hit voters with post-election tax rises and delay net zero investment unless it is prepared to rip up Treasury rules for managing the state finances, a leading thinktank has said.

The National Institute for Economic and Social Research (Niesr) called for a radical overhaul of the self-imposed constraints imposed on government borrowing and debt as it warned that persistently weak growth and lower inflation would make hitting the rules more difficult.

The Road to Freedom by Joseph Stiglitz review – against Hayek

The former world bank economist argues that neoliberalism paves the way for populism

In 1944 the Austrian-born economist Friedrich Hayek, displaced to Britain, was disquieted by his leftwing academic peers. As Hayek saw it, their political philosophy committed the same error as the fascism that was ravaging his homeland. He wrote that the desire to plan an economy centrally was – in what became the title of his most famous book – The Road to Serfdom: “many who sincerely hate all of nazism’s manifestations are working for ideals whose realisation would lead straight to the abhorred tyranny”. Hayek cast fascism not as a reaction to progressive success, but as its natural endpoint.

Joseph Stiglitz, a former chief economist of the World Bank and adviser to Bill Clinton, tackles this idea head on in The Road to Freedom, his rejoinder to Hayek’s work and that of his libertarian fellow traveller Milton Friedman. As Stiglitz sees it, rather than too much government leading to tyranny, the shift to neoliberalism has reduced freedom and “provided fertile ground for populists”. Social democracy, with its greater role for the state, generates freer, robust societies that are resilient to authoritarians like former president Donald Trump.

Grant Shapps says it will ‘take some time’ to conclude who was to blame for cyber-attack on armed forces payroll – as it happened

Defence secretary makes statement after 270,000 payroll records belonging to members of Britain’s armed forces been exposed to hackers. This live blog is closed

Reeves says Labour has a vision for the country. Stability will be change, she argues.

I know – warm words are not enough. I do not underestimate the challenges we face. But I am so ambitious for our country. I know the huge potential found all across Britain and the constraints that are holding that potential back are not immutable forces.

They require vision, courage, and responsible government. Vision – to pursue a different approach, drawing on new economic thinking shaping governments in Europe, America and around the world – but which this Conservative government resists.

LockBit ransomware group’s leader unmasked and hit with sanctions; UK house prices inch higher– business live

Leader of major cybercrime group has been unmasked and sanctioned by the UK, US and Australia, authorities say

• ‘They’re everywhere’: Labour’s wooing of City goes into overdrive

The small increase in UK house prices in April has left them broadly flat since the turn of the year, says Peter Arnold, EY UK chief economist:

The stabilisation in market conditions reflects the large fall in mortgage rates since last summer, with transactions and prices appearing to have passed their trough.

However, the recent rise in mortgage rates is likely to dampen the recovery in the short-term. And looking ahead, the recovery in prices is unlikely to be rapid given that poor affordability continues to significantly limit the pool of potential buyers and mortgage rates are only likely to fall back slowly.

As the prospect of the first rate cut since March 2020 drifts further into the distance, borrowing costs have edged higher and budgets have been squeezed.

A short-lived burst of positivity in the early weeks of this year led to higher supply, increasing downwards pressure on prices. A wave of homeowners currently rolling off sub-2% mortgages is adding to the financial pressures in the system. As a summer rate cut moves onto the horizon, we expect UK house prices to respond and rise by 3% in 2024.”

“Borrowers have benefited from cheaper mortgage rates since the start of the year, which has boosted market activity and enquiries.

“Since then, higher funding costs have led to higher mortgage rates over the past couple of weeks and there is likely to be some volatility in pricing ahead. Borrowers would be wise to secure a rate they like the look of to protect themselves from further price fluctuations in the short term.

“House prices are yo-yoing as buyers and sellers negotiate their way through the uncertain economy, with a small monthly rise in April.

“Consumers are expecting a fall in interest rates at some point this year. But with lenders increasing rates in the last few weeks, buyers have understandable hesitancy over the right price to offer, while sellers are trying to navigate how offers align with their expectations.

It looks like mortgage rates will continue to remain elevated with the Bank of England poised to keep interest rates at 16-year highs of 5.25% this Thursday.

Financial markets have been pushing back their forecasts for the timing of the first rate hike this year, with August currently pencilled into the diary, although that could certainly change depending on the data.”

‘Labour will surpass your expectations’: the leftwing thinktank boss standing on Starmer’s agenda

Miatta Fahnbulleh is running for parliament – and, as a black female economist, hopes to broaden parliament’s outlook on ‘the rules of the game’

Miatta Fahnbulleh has been talking about economic transformation for as long as she can remember. After she and her family fled civil war in Liberia as a child, the main topics of conversation around the breakfast table in London were politics and economics.

“When other people were talking about EastEnders, we were on about changing the economic settlement,” says the 44-year-old former chief executive of the New Economics Foundation (NEF), who is standing as Labour’s candidate in Peckham, south London, at the next election.

UK house prices steady in April as higher mortgage rates bite

First-time buyers targeting smaller properties, with flats closing ‘growth gap’ on houses, says Halifax

• Business live – latest updates

House prices in the UK were steady in April after falling in March, as higher mortgage rates prompt first-time buyers to go for smaller properties, according to the mortgage lender Halifax.

The price of a typical home rose by less than £200 last month to £288,949, a 0.1% monthly gain, compared with a 0.9% drop in March, which was the first decline in six months. On an annual basis, prices rose 1.1% in April, up from March’s rate of 0.4%, largely because there was weaker price growth this time last year, Halifax said.

Wet weather woes cause damp start to spring for retailers and restaurants

Consumer caution over high interest rates and energy bills adds to bleak start to the year for sector

Cold wet weather and caution about spending amid high interest rates and energy bills have delivered a dismal start to spring for retailers and restaurants, the latest industry figures show.

Sales were virtually flat across March and April against the same period a year ago, according to the latest figures from the British Retail Consortium (BRC) trade body and advisory firm KPMG. That was despite prices continuing to rise with inflation, suggesting a drop in the volume of items sold over the important Easter period.