U.K News

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

Published

2 months ago

2024-10-16

Salman Ahmad

(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

Keir Starmer Rejects Meeting With WW2 Veteran Over Her Frozen Pension

Published

2 weeks ago

2024-12-04

Geoff Brown

Anne Puckridge, orld War Two veteran, state pension

"It's the injustice of it that is so unfair, the fact that we were never warned."

UK Prime Minister Keir Starmer has rejected a request from a 99-year-old WW2 for a meeting to discuss the frozen state pension policy for citizens living abroad. Starmer declined the meeting but offered an alternative meeting with Pensions Minister Emma Reynolds.

Anne Puckridge, who turns 100 this month, went from her home in Canada to agitate Keir Starmer’s Labour government over the state pension freeze.

The World War II veteran told the BBC that she is “angry” and “heartbroken” following a meeting with the pensions minister, who led her to believe that the government will not reconsider its policy of freezing the state pensions of some British people living abroad.

Anne Puckridge is one of approximately 453,000 British retirees living overseas who do not receive an annual increase in their state pension.

Pensions Minister Emma Reynolds agreed to a meeting after Sir Keir Starmer’s request to meet was denied owing to purported “pressures on his diary.”

Ms. Puckridge stated that the meeting in Parliament left her feeling “bitterly disappointed” and “disgusted”.

She stated that she had the idea Reynolds had been “polite enough and kind enough to come in and spend her time with her,” but that her mind had already been made up before the meeting began.

Ms Puckridge stated that she and her other campaigners would have to think carefully about what they could do from now on, but she assured them that they would take action.

State Pension Minister Reynolds thanked Ms Puckridge for the meeting and for sharing her insights.

A Department for Work and Pensions (DWP) representative stated that the government recognizes that “people move abroad for various reasons, and we provide clear information on how this can affect their pensions.”

The policy of increasing the UK state pension for recipients living abroad has existed for many years.

Since she relocated to Canada in 2001 at the age of 76 to live closer to her daughter, Ms Puckridge has received £72.50 (C$129.00) per week.

Her state pension is now less than half the £169.50 (C$302.00) paid to seniors still residing in the United Kingdom. She told the BBC that frozen pensions touch all aspects of life.

“You’ve got to be careful about entertainment,” she told me. “You must realize that you cannot be as kind to your grandkids as you would like.

“You feel you’ve lost all sense of dignity, the government has thrown you away, you know, out of sight out of mind.”

Ms. Puckridge stated that when she alerted the Department for Work and Pensions (DWP) that she was moving to Canada, “they never said a word about [my] pension being frozen”.

“The first I knew about it was when my first rise was due,” she recalled.

“I didn’t understand it. So I wrote and enquired about it, and I was told no… you will not receive any additional pension rises when you leave the UK.” She said, “It’s the injustice of it that is so unfair, the fact that we were never warned.”

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U.K News

Air Force Drones Spotted Over UK Military Bases

Published

3 weeks ago

2024-11-29

Geoff Brown

Air Force Drones Spotted Over UK Military Bases

The drones were not considered hostile, the USAF said,

British military expertise has been brought in to assist in identifying persons responsible for flying Air Force drones near US military locations. According to the BBC, 60 RAF troops have been dispatched to assist the US Air Force with its probe.

The Air Force drones were not deemed hostile, according to the USAF, who added that the sightings “fluctuated and varied between the bases” and “ranged in sizes and configurations”.

According to the Ministry of Defence, “We are supporting the US Air Force response.”

The announcement follows several recent reports of unmanned aerial vehicles sighted near RAF Lakenheath and RAF Mildenhall in Suffolk and RAF Feltwell in adjacent Norfolk.

There have been other reports of drone activity overnight. According to the USAF, the vehicles were few in number and modest in size.

A representative for the US Air Forces in Europe stated, “We can confirm that there were sightings yesterday during nighttime hours, but the number fluctuated and varied between the bases throughout the night.”

The official stated that since the first sightings on November 20th, there has been “no impact on residents or infrastructure, and they have not been identified as hostile.”

However, the Air Force drones remained under surveillance “to ensure the safety and security of the installations.”

They said, “We request individuals in the area to contact either local police or security forces if they see anything suspicious.”

‘Treat threats seriously’

Officials in the United States and the United Kingdom have not said who is responsible for the recent drone activity.

However, the BBC understands there were worries that a state actor could be involved.

In recent months, intelligence officials have warned of increasing Russian sabotage operations against Western countries supporting Ukraine.

RAF Mildenhall is primarily home to the USAF’s 100th Air Refuelling Wing; RAF Lakenheath is home to USAF F-35A and F-15E fighter jets; and RAF Feltwell is mainly concerned with logistics and provides housing for military personnel.

A spokesman for the MoD, which owns the bases, said: “We take threats seriously and maintain robust measures at defence sites.

“We are supporting the US Air Force response.”

The USAF has not said who it believed to be behind the incidents.

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U.K News

General Election Petition in UK Hits 2 Million Signatures

Published

4 weeks ago

2024-11-26

Geoff Brown

Starmer has ruled out an general election after a petition reached two million signatures

British Prime Minister Keir Starmer has ruled out holding an early general election after a petition calling for a second vote garnered two million signatures.

Over the weekend, a petition calling for another general election was started on the UK Parliament website. It cited Starmer’s failure to keep all his pledges made in the run-up to the previous election. By Monday mid-morning, it had surpassed two million signatures.

When asked about the petition, Starmer said he was “not surprised” that some individuals who did not vote for Labour in the previous election want a “re-run” of the poll.

He claimed that he had “inherited a lot of problems” from the previous administration and had resolved to “take the hard decisions first.”

Starmer ruled out an early general election, stating that only the Prime Minister can request that the King call a general election; it simply will not happen, he said.

This petition, started last week and sponsored by Reform UK leader Nigel Farage, calls on the government to schedule a new general election.
To sign a petition, you must verify that you are a British citizen or resident and provide a postcode.

The petition states, “I would prefer there to be another general election. I believe the present Labour government has broken the pledges they made before the last election.”

The petition comes only five months after Labour won the July general election with 9.7 million votes and 412 seats in the House of Commons.

However, the Labour Party garnered only 35% of the vote, the lowest percentage gained by a single-party administration since the conclusion of WWII.

Some of the policies implemented by Starmer and his Labour government have received significant criticism, including an inheritance tax on farms, a reduction in winter heating payments, an increase in employers’ national insurance, and applying VAT to private school fees.

According to the most recent Ipsos political pulse poll, the Labour Party is unpopular, with 28% of the public favoring it and 49% opposing it.