Bank of England governor Andrew Bailey has just finished at the Treasury Select Committee where he was asked why, when the ONS’ growth figures look so promising for the Chancellor, BoE staff said in their latest report that underlying GDP growth was actually zero in the first quarter of the year. His answer was revealing:
“The challenge we have at the moment is that the forward-looking sort of evidence on activity in the economy so the surveys are nothing like as strong as that. So there is a disjoint if you like between that number and and and and the pattern we get from the surveys and the evidence.”
Guido has diligently covered surveys on confidence and projections from across the board. They do not paint a pretty picture…
Bailey points out the private figures are better than the ONS’ stats as a predictor:
“Surveys are probably a bet on average a better predictor of the future than the immediately previous GDP number… there’s a whole range… if you add them up… all the various surveys get around quite a lot of the economy.“
Businesses themselves are far from optimistic about Labour’s tax hikes and even less so when the Employment Rights Bill comes into play…
The Monetary Policy Committee of the Bank of England has voted to cut interest rates by 25 basis points to 4.25%. After holding at 4.5% last month…
“The MPC voted by a majority of 5–4 to reduce Bank Rate by 0.25 percentage points, to 4.25%. Two members preferred to reduce Bank Rate by 0.5 percentage points, to 4%. Two members preferred to maintain Bank Rate at 4.5%.” Interesting split…
The BoE notes: “underlying UK GDP growth is judged to have slowed since the middle of 2024, and the labour market has continued to loosen.” Tariff uncertainty weighing heavy on the analysis…
The Monetary Policy Committee of the Bank of England has voted to hold interest rates at 4.5%. After a cut last time round…
Prior to reaching 4.5% the rate was held at 4.75% following a cut from 5%. A jumpy path to cutting rates. As expected by markets in the face of ‘economic uncertainty’…
The MPC split was 8-1. Interesting when it comes to the prospects for future cuts…
UPDATE: The Bank’s explanatory notes go into more detail: “While UK GDP growth estimates have been slightly stronger than expected at the time of the February Monetary Policy Report, business survey indicators generally continue to suggest weakness in growth and particularly in employment intentions. In recent quarters, subdued activity has been judged to reflect both demand and supply factors.” Thanks Rachel…
The billions lost by Gordon Brown’s decision to sell Britain’s gold reserves are mounting as gold prices have increased tenfold since that debacle. Gold touched $3,000 for the first time ever on Friday and has sat at around the same level since, peaking at $3,004.86 on Friday and $3,001.63 today. Would be nice to have some in reserve…
Guido got out his fag packet to do some maths. Gordon Brown sold 12,712,000 ounces of gold for revenue of $3,500,588,920. That would today be worth $38,197,780,320. That’s a difference of $34,697,191,400. Exchanged to pounds that’s lost revenue potential of £27,168,547,397. Could fill a black hole or two…
Guido has long highlighted Brown’s stupidity in selling off the Bank of England’s gold reserves at their then level (Brown’s bottom) – the former Chancellor’s reverse Midas touch in action. FT economist and Guido’s old sparring partner on the Brown sell-off Alan Beattie has kept mysteriously quiet…
The Bank of England’s new economic forecast, which accompanies its rate decision, is not happy reading for Reeves. Growth in 2025 is now predicted to crawl upwards at a snail’s pace…
Staff at the BoE now say the economy will grow by only 0.75% in 2025, half of its last forecast from just three months ago in November. In its rate cut explanation the Bank adds:
“GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined. GDP growth is expected to pick up from the middle of this year… Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened. As a result, the recent slowdown in demand is judged to have led to only a small margin of slack opening up.”
In response Downing Streets says: “Growth is the priority of the Government, we are focused on taking the necessary decisions for growth.” At the same time the BoE predicts headline inflation to rise to a higher-than-expected 3.7% later in the year. Doesn’t look the the Budget is passing Starmer’s ‘growth test’ after all…
The Monetary Policy Committee of the Bank of England has cut interest rates to 4.5%. The third cut since last Summer…
Last month they were held at 4.75% following a cut from 5%. The markets had it at almost complete certainty that a cut was inbound…
The MPC voted 7-2 for a cut. Two members voted for half a point cut…
Former leader of the SNP in Westminster Ian Blackford told Times Radio why he believes Nicola Sturgeon’s claim that she spent no time in the kitchen and therefore didn’t see any of her husband’s purchases:
“She doesn’t have a passion for cooking.”
