Welcome to our Weekly Digest – stay in the know with some recent news updates relevant to business and the economy.
HMRC late payment interest rates to be revised after Bank of England lowers base rate
The Bank of England Monetary Policy Committee announced on 7 November 2024 to reduce the Bank of England base rate to 4.75% from 5.0%. HMRC interest rates are linked to the Bank of England base rate.
UK ‘not the target’ of Trump tariffs as free trade deal talks ‘could be back on the cards’
Speaking to Sky News, the chief executive of BritishAmerican Business said a free trade deal might be back on the table between the UK and the United States with Donald Trump in the White House. However, he said any deal would likely need to include food.
Bank of England delivers welcome rate cut amidst ongoing Budget fallout
Commenting on the decision of the Monetary Policy Committee of the Bank of England to cut interest rates to 4.75%, Anna Leach, Chief Economist of the Institute of Directors, said “The Bank notes some uncertainty regarding the likely path for inflation and interest rates following the Budget. But the market reaction so far, as well as a higher pathway for inflation, imply tighter credit conditions for businesses and households. On balance, we look set for fewer interest rate cuts than might otherwise have been the case.”
Expect a more elevated trajectory of UK interest rates following Budget
Governor Andrew Bailey’s recent comments the BoE could be “a bit more aggressive” with cuts if inflation data remains favourable are now ringing a little hollow. Even before the Budget it was possibly wishful thinking. Services inflation remains worrisome at 4.9% and wage inflation is running at a similar clip. And now the unveiled fiscal policies look decidedly inflationary, as reflected by OBR forecasts that pencil in above-target price rises for both 2025 and 2026, according to Rob Morgan, Chief Investment Analyst at Charles Stanley.
UK services sector growth eased in run-up to Budget
Growth in the UK’s services sector slowed to its lowest rate in nearly a year last month as some firms reported policy uncertainty ahead of the Budget, according to new figures.
Bank of England cuts rates but sees higher inflation after Reeves’ budget
The Bank of England cut interest rates on Thursday for only the second time since 2020 and said future reductions were likely to be gradual, seeing higher inflation and growth after the new government’s first budget.
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