Bank of England holds interest rates at 4% and slows scheme to sell stock of UK bonds
The Bank of England has left interest rates on hold at 4% and will slow the pace of its “quantitative tightening” programme in the year ahead to avoid distorting jittery government bond markets,The central bank’s nine-member monetary policy committee voted 7-2 to leave borrowing costs unchanged, after five cuts since summer 2024, including a reduction last month,The MPC had been widely expected to pause rate cuts this month as annual inflation remained at 3,8% in August, nearly double the target level,The Bank’s governor, Andrew Bailey, said: “Although we expect inflation to return to our 2% target, we’re not out of the woods yet so any future cuts will need to be made gradually and carefully.
”Bank policymakers have been balancing the risks of rising inflation, caused in part by a jump in food prices, against a continuing slowdown in the jobs market, with unemployment at a four-year high,In the minutes of Thursday’s meeting, the MPC said its own estimates showed employment growth at zero, which it said was “partly attributable to the impact of increases in employers’ national insurance contributions”,The £25bn NICs increase at last year’s budget prompted a furious backlash from business groups,Two members of the committee, Swati Dhingra and Prof Alan Taylor, voted for another quarter-point rate cut this month,The MPC’s decision to hold rates widens the gulf between its stance and that of the US Federal Reserve, which reduced interest rates by a quarter of a point on Wednesday, its first rate cut since December.
Bailey also announced that the Bank would slow the pace of reductions to its balance sheet through quantitative tightening (QT), which involves selling off the government bonds the Bank accumulated through the emergency policy of quantitative easing after the 2008 financial crisis.Threadneedle Street has come under pressure to moderate QT amid volatile yields – effectively the interest rate – on government bonds, known as gilts.The Bank has acknowledged that QT has put some upward pressure on gilt yields, which affect the cost of borrowing for the Treasury, and critics have accused it of distorting fragile bond markets.Given the gilts are now being sold at a loss, the policy also has an impact on the public finances.In the past year the Bank has been aiming to reduce its stock of government bonds by £100bn.
This has involved selling off gilts as well as retiring others when they reach maturity.In Thursday’s announcement, which was widely anticipated by markets, the Bank opted to cut the planned reduction in its stock for the year ahead to £70bn.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionBailey said: “Today we reduced the size of our annual QT target from £100bn to £70bn.The new target means the MPC can continue to reduce the size of the Bank’s balance sheet in line with its monetary policy objectives while continuing to minimise the impact on gilt market conditions.”However, with fewer bonds in the Bank’s portfolio set to mature in the next 12 months, the pace of Bank bond sales will actually increase, to about £21bn, from £13bn in the current year.
Pointing to recent volatility in global government bond markets, the minutes of the MPC meeting said that “although the UK gilt market had continued to function in an orderly manner, these factors could pose a risk that QT would have a greater impact on market functioning than previously”,The chancellor, Rachel Reeves, welcomed the Bank’s decision, adding that it should continue to liaise with the Debt Management Office, which issues government debt, “to ensure the Bank’s operations do not impact on the government’s wider gilt issuance strategy”,Rising interest costs on government debt are one of the factors likely to put her on course to break her fiscal rules, in forecasts from the Office for Budget Responsibility before the 26 November budget,As well as reducing the overall target for QT, the Bank said it would shift the balance of bond sales towards shorter-term gilts,The OBR recently warned that the decline in defined-benefit pensions had undermined demand for the longest-dated government bonds.
Left smouldering for a decade, the Hawthorn v Geelong rivalry is about to fire up | Martin Pegan
The AFL’s best modern-day rivalry has been left smouldering for a decade. The flames might flicker whenever Geelong and Hawthorn meet. They threaten to take hold each Easter Monday. But the fear and loathing will return in full when the fuel of a preliminary final is poured on the Cats and Hawks clash on Friday night.Geelong have largely had the better of their old foes since Hawthorn completed their premiership three-peat in 2015
World Athletics Championships 2025: McLaughlin-Levrone wins women’s 400m, Kebinatshipi takes men’s title –as it happened
Righto, that’s it from us for now, but what a night that was. Noah Lyles ran a brilliant 200m semi, setting up tomorrow’s final with Letsile Tebogo, Kenny Bednarek and Bryan Levell also looking mean while, in the women’s event, it looks like a ruckus between Shericka Jackson and Melissa Jefferson-Wooden.But it was the two 400m finals that really made us feel, Collen Kebinatshipi announcing himself to the world with a dominant run to take men’s gold, before Sydney McLaughlin-Levrone did what we all knew she’d do, adding the flat to her list of events mastered, having left the hurdles in search of a new way to proclaim her genius.Sean Ingle’s reports will be with us shortly, sh please do check back in here or on-site for those, but otherwise, peace out.I’ve not really finished kvelling over today, but just have a look at tomorrow!I don’t suppose Sydney could quite stretch to the 800m, but 400m hurdles are so taxing perhaps she’s got the strength
Gout Gout misses out on 200m final but says better performances are ‘coming’
The promising debut of Gout Gout on the international stage has come to an end after he was eliminated at the world championships in a competitive semi-final in Tokyo.The 17-year-old finished fourth in his race behind winner Bryan Levell, and missed out on the two additional time-based qualification places on offer after running a 20.36sec.Although Torrie Lewis couldn’t progress in the women’s 200m either, Australia’s middle distance runners and high jumpers found success in the National Stadium on Thursday.Three Australian women reached the semis in the 800m, including Jess Hull who was reinstated after being a victim of contact
Hannah Botterman fit to face France in semi-final after fearing her World Cup was over
Hannah Botterman has admitted she feared her Rugby World Cup was over after sustaining a back injury against Australia in England’s final pool match.Botterman, 26, has recovered to be named in England’s semi-final starting XV but was seen crying in pain as she walked off the pitch in the second half against the Wallaroos and subsequently sat out the quarter-final victory over Scotland.Fast-forward a week and the loosehead will feature in the front row amid four changes to England’s starting XV to face France on Saturday, including the return of world player of the year, Ellie Kildunne, at full-back.When asked, however, if she felt her tournament might have been over after being substituted in the second half in Brighton, Botterman said: “Yes. Back’s never nice to do, but it was a bit more painful than anything else I’ve had
Tom Brady’s jaunt into the Raiders’ coaching booth exposed an NFL blind spot
The seven-time Super Bowl champion has a prominent position at both Fox and the team he co-owns. It’s getting harder for those two things to exist togetherIt’s time for Tom Brady to pick. Or better yet, for the NFL to make him choose.Brady’s twin roles as a minority owner of the Las Vegas Raiders and the lead voice for the NFL on Fox can no longer coexist. The lines are too muddled, the potential for scandal unnecessary
Enhanced Games targets British stars after signing US sprinter Fred Kerley
British athletes across multiple sports are being targeted by the Enhanced Games after the US sprint star Fred Kerley became the biggest name yet to sign up for the controversial event.Kerley, the world 100m champion in 2022, said he was joining the Enhanced Games, which allows athletes to take performance-enhancing drugs that are banned in official events, to become the fastest man ever.Sources have now told the Guardian that the Enhanced Games have been reaching out to other British stars after announcing last week they had signed Ben Proud, the Olympic 50m freestyle silver medallist swimmer.Kerley’s decision led to his being dropped by his agents, Pace Sports Management, who also represent Usain Bolt and Mo Farah. Ricky Simms, the head of Pace Sports, said: “We did not negotiate this deal and no longer represent Fred Kerley
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