U.K News

UK Inflation Surprises Allow For a Less Harsh Budget And Reduced Interest Rates.

Published

1 month ago

2024-10-16

(VOR News) – Following last month’s drop in inflation to 1.7%, the Bank of England now has all the data needed to decide whether to reduce interest rates next month.

From 2.2% in August, the rate of price growth has sharply declined and is now much below the 2% objective set by the central bank. We have returned to the state we were in at the beginning of 2021, just before Russia invaded Ukraine and increased energy prices.

Low interest rates and inflation will soon boost Labour, which relieves Rachel Reeves.

This will help her finance the investments in this month’s budget by allowing her to borrow money without scaring the financial markets.

A decline in departmental spending may be predicted by the Office for Budget Responsibility (OBR) in conjunction with a decline in inflation. For example, the September inflation rate will decide the working-age benefit increase in April of the following year, saving billions on the welfare tab.

The OBR projects that the cost of servicing government debt will go down. It came to more than £100 billion in the fiscal year 2023–2024, or around 10% of all spending. This is because the Bank currently anticipates a quicker decline in borrowing costs.

In her budget for October 30, Reeves has the chance to raise long-term infrastructure expenditures while keeping actual spending on daily expenses same. This depends on the Treasury’s capacity to borrow money at a cheaper cost and the ability of Whitehall departments to set lower inflation-aware budgets.

This illustrates the significant influence that lowering inflation can have. Of course, the chancellor will still need to enact some big tax rises, but this might potentially be a part of a larger story that is far more positive about the UK than most analysts—including the Treasury—had previously thought.

A lot will depend on how the OBR evaluates the ensuing five years, as its March estimate cannot have altered significantly. It is therefore anticipated that significant revisions to the projected borrowing costs and inflation will be needed.

A forecast of borrowing costs needs to take the Bank of England’s response into consideration. Prior to the latest numbers being released, eighty percent of investors were certain that interest rates would be decreased by a quarter of a percentage point to 4.75% when policymakers met the following month.

Consequently, those odds have dropped to 90%, and as Bank governor Andrew Bailey told the Guardian earlier this month, there is an increasing possibility that rates may be further lowered in the coming year if inflation declines faster than expected.

The financial markets behaved as anticipated after the September inflation estimate was released. Because of sterling’s ongoing depreciation in currency markets.

The pound has fallen from $1.34 at the inflation end of last month to less than $1.30.

It is anticipated that a sizable portion of the nine members of the Bank’s monetary policy committee (MPC), which determines interest rates, will continue to harbor doubts regarding the likelihood of long-term price stability.

They will stress how the recent decline in inflation is a direct result of the recent decline in energy costs and their effects on sectors like transportation. According to data from the Office for National Statistics, the average cost of gasoline decreased by 5.5 pence per liter to 136.8p in September of 2024.

MPC members, who are frequently impacted by the falling cost of transportation, will be concerned about the continuous, notable increase in food expenses. The main measure of longer-term inflationary trends, the core inflation number, was revealed at a significantly higher rate of 3.2%. Food and energy are not included in this figure due to their considerable volatility.

However, sluggish wage growth indicates that borrowing costs need to be lowered as the economy is about to collapse. These days, Beijing’s economic policies have a greater influence on oil prices than wars in the Middle East.

Additionally, China, the biggest consumer of oil in the world, is currently going through a major slowdown as a result of the stunning collapse of the real estate bubble.

The US economy is expected to expand on the other side of the Atlantic. The situation in Ukraine and the waning demand from its primary export markets, China and the US, are adding to the already heavy load that the rest of Europe is already carrying.

Interest rates will probably decrease more quickly than first predicted since the MPC will evaluate changes in interest rates in light of the state of the world economy.

Reeves will voice his disapproval of the way the world economy is going. Her goal is to restore public finances while making up for more than a decade of improper public spending allocations during the Conservative administration.

SOURCE: TGN

U.K News

London Hit With Heavy Snow as Temperatures Plummet

Published

4 days ago

2024-11-19

Geoff Brown

London, England, has been gripped by an Arctic freeze, with temperatures dipping well below zero, snow forcing trains to stop, and over 200 schools closing in and across the UK.

Commuters faced traffic mayhem as Braemar in Aberdeenshire recorded the coldest temperature in the UK this early in the season since 1998, at -11.2C (12.2F).

Today, the Met Office issued three yellow weather warnings for snow and ice across the Midlands and North of England, Wales, Scotland, and Northern Ireland.

The UK Health Security Agency issued the season’s first amber cold weather health advisory, warning that circumstances could be hazardous to vulnerable people.

Poor weather hampered rail travel, with no trains running between Nottingham and Worksop or between Llandudno and Blaenau Ffestiniog in North Wales.

A couple walks on the snow-covered ground at Pavillion Gardens in Buxton, Derbyshire.

Northern services in Yorkshire between Bradford and Huddersfield, Hebden Bridge to Halifax, and Halifax to Hull were all disrupted while flooding at Ulverston in Cumbria caused delays between Barrow-in-Furness and Lancaster.

Around 130 Welsh schools closed in Wrexham, Powys, Denbighshire, and Flintshire, with closures also reported in Birmingham, Nottinghamshire, and Derbyshire.

Nearly 5 inches (12 cm) of snow fell at Watnall in Nottinghamshire, with 3 inches (8 cm) at Cranwell in Lincolnshire and 2 inches (5 cm) at Lake Vyrnwy in Powys, Wales.

The Met Office issued warnings that vehicles might become trapped, power outages could occur, remote communities could be shut off, and falling on ice could cause injury.

England has a yellow warning until 11 a.m., while Scotland has a warning until 10 a.m. tomorrow. Another warning for Northern Ireland expired at 10 a.m.

The UK Health Security Agency issued an amber cold weather health notice for the East and North of England, the Midlands, Yorkshire, and the Humber.

Yellow health alerts went into effect for the South East, South West, and London at 8 a.m. today and will run until 6 p.m. on Saturday.

National Rail warned that the cold weather would impair several routes on northern rail services until at least 2 p.m. today.

Merseyrail issued a notice informing passengers that due to the possibility of snow and ice covering tracks, the first train on each line in North West England would run without passengers to allow conditions to be examined.

National Highways also issued a strong amber weather advisory for snow, indicating that the M1 in Leeds and Sheffield, the M56 in Manchester, junction 39 of the M6, and junctions 21-23 of the M62 may see interruption.

WEATHER WARNING 1: The Met Office snow warning in Northern Ireland terminated at 10 a.m. today.

WEATHER WARNING 2: A separate snow and ice warning for Northern England until 11 a.m. today.

WEATHER WARNING 3: Scotland’s snow and ice warning is live until 10 a.m. tomorrow.

The Met Office, which characterized the weather as ‘the first taste of winter,’ said heavy snow will cause problems in England, with Derbyshire being the most vulnerable.

According to Dan Suri, the Met Office’s chief meteorologist, a low-pressure system will move eastward on Monday night.

The related frontal system, which marks the border between cold air in the north and milder weather in the south, may deliver disruptive snow to certain locations between Monday evening and Tuesday morning.

Dr. Agostinho Sousa of the UK Health Security Agency stated, “This is the first amber Cold Weather Health Alert of the season, but we can expect more as winter approaches. It is critical to check in on vulnerable friends, family, and neighbors to ensure they are well prepared for the onset of cold weather.”

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U.K News

Windsor Castle Robbed While Royal Family Slept

Published

5 days ago

2024-11-19

Geoff Brown

UK police report two men broke into the Windsor Castle estate, home to Prince William and Catherine and their three children and stole two vehicles.

According to the Sun newspaper, the robbers broke into a farm building on the Windsor estate and stole a black Isuzu pick-up truck and a red quad bike stashed in a barn.

The Prince and Princess of Wales reportedly arrived at their estate home during the nighttime burglary.

Thames Valley Police stated the individuals ran to the Old Windsor/Datchet area, but no arrests have been made.

“Offenders entered a farm building and stole vehicles,” the police added. An investigation is underway regarding the incident.

There have been previous security incidents at Windsor. On Christmas Day in 2021, an intruder was apprehended on the grounds of Windsor Castle. Jaswant Singh Chail, who was equipped with a crossbow, received a nine-year prison sentence.

The Windsor estate, located west of London, spans 15,800 acres and contains functioning farms, conservation areas, Windsor Great Park, and well-known royal attractions, including Windsor Castle.

Windsor Castle received 1.4 million visitors last year, making it the UK’s most popular royal tourist site.

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U.K News

Britain’s Conservative Party Elects Kemi Badenoch as Leader

Published

3 weeks ago

2024-11-02

Ana Wong

Conservatives pick Kemi Badenoch as party leader

U.K. Conservatives pick Kemi Badenoch as their party's new leader

Britain’s Conservative Party elected outspoken MP Kemi Badenoch as its new leader on Saturday, making her the first woman of color to lead a major British political party.

She has promised to give the right-of-center Tories “renewal” by advocating for a smaller state and rejecting identity politics.

The new leader faces a daunting challenge in restoring the party’s reputation after years of division, scandal, and economic turbulence, hammering Labour Prime Minister Keir Starmer’s policies on key issues such as the economy and immigration and returning the Conservatives to power in the 2029 election.

“The task that stands before us is tough but simple,” Kemi Badenoch said in a victory address to a room full of Conservative legislators, staff, and journalists in London. She stated that the party’s role was to hold the Labour administration accountable while developing commitments and a government strategy.

Addressing the party’s electoral defeat, she stated, “We have to be honest — honest about the fact that we made mistakes, honest about the fact that we let standards slip.”

“The time has come to tell the truth, to stand up for our principles, to plan for our future, to reset our politics and our thinking, and to give our party, and our country, the new start that they deserve,” according to Badenoch.

Kemi Badenoch was Born in London

Kemi Badenoch, a business secretary in Sunak’s cabinet, was born in London to Nigerian parents and grew up in West Africa.

The former software engineer positions herself as a disruptor, advocating for a low-tax, free-market economy and promising to “rewire, reboot, and reprogram” the British state. Like her adversary Jenrick, she has opposed multiculturalism and advocated for decreased immigration, but unlike him, she has not asked that Britain abandon the European Convention on Human Rights.

Kemi Badenoch, a self-proclaimed hater of wokeness, opposes identity politics, gender-neutral toilets, and government initiatives to reduce carbon emissions in the United Kingdom. During the leadership race, she was chastised for claiming that “not all cultures are equally valid” and implying that maternity pay was excessive.

Tim Bale, a politics professor at Queen Mary University of London, predicted that under Badenoch, the Conservative Party would “swing to the right both in terms of its economic and social policies.”

He foretold that Badenoch will follow “what you might call the boats, boilers and bathrooms strategy …. focusing very much on the trans issue, the immigration issue and skepticism about progress towards net zero.”

Conservative Party Becoming More Diverse

While the Conservative Party is unrepresentative of the country as a whole, with a decreasing membership of 132,000 mostly affluent, elderly white men, its higher echelons have become significantly more diverse.

Badenoch is the Tories’ fourth female leader, following Margaret Thatcher, Theresa May, and Liz Truss, who became prime ministers.

She is the second Conservative leader of color, following Sunak, and the first with African heritage. The center-left Labour Party has a more diversified membership, but its leaders have always been white men.

In a more than three-month leadership contest, Conservative MPs narrowed the field from six to two in a series of votes before presenting the last two to a vote of the party’s membership.

Both finalists were from the party’s right-wing and claimed they could reclaim votes from Reform U.K., the hard-right, anti-immigrant group led by populist leader Nigel Farage that has eroded Conservative support.

However, the party lost many votes to the winning party, Labour, and the centrist Liberal Democrats, and some Conservatives are concerned that tacking right may move the party away from popular sentiment.

Kier Starmer’s Labor government has had a difficult first few months in power, plagued by unfavorable headlines, fiscal woes, and a sinking approval rating.

However, Bale stated that the historical record implies Badenoch’s chances of leading the Conservatives back to power in 2029 are slim.

“It’s quite unusual for someone to take over when a party gets very badly beaten and manage to lead it to election victory,” according to him. “However, Keir Starmer did just that after 2019. So there are records to break.”

Source: AP