Bank of England governor Andrew Bailey has added his voice to those condemning Peter Mandelson for leaking market-sensitive information at the time of the global financial crisis, our economics editor Heather Stewart writes.“I am shocked by what we are hearing,” Bailey said (see earlier post), when asked about the revelations at a Bank press conference.We do learn from that that there are times when … lobbying happens which has ethics attached to it which I do find shocking, frankly.Asked again about his personal feelings, Bailey, who worked with the Treasury on the response to the 2008 financial crisis, appeared to become emotional as he compared the actions of Mandelson to those of the late chancellor, Alistair Darling.Bailey reminds journalists at the Bank that he and his colleagues at the press conference, Clare Lombardelli and Dave Ramsden, all knew Darling (who died in 2023).

His voice trailing off, Bailey says:One of the things I think we all three of us can say: to see those pictures of Peter Mandelson with Alistair Darling.Alistair Darling was doing all the right things, and he was doing them with a thorough sense of honesty and decency, and he can’t speak for himself today, sadly.Time to wrap up….Bank of England policymakers have left interest rates unchanged at 3.75%, but indicated that lower inflation as a result of cost-of-living measures in Rachel Reeves’s budget should pave the way for cuts in the months ahead.

The nine-member monetary policy committee (MPC) voted to leave borrowing costs on hold, despite forecasting weaker growth and lower inflation than at its last quarterly forecast in November.But the narrower than expected 5-4 split in the MPC’s voting suggested further reductions in borrowing costs were to come.The committee has cut rates six times since mid-2024.Andrew Bailey, the Bank’s governor, who voted to hold rates, said:“We now think that inflation will fall back to about 2% by the spring.That’s good news.

We need to make sure inflation stays there, so we’ve held rates unchanged at 3.75% today.All going well, there should be scope for some further reduction in bank rate this year.”During a press conference, Bailey said he was ‘shocked’ by recent revelations of communications between Peter Mandelson and Jeffrey Epstein during the financial crisis.“How is it that we live in a society in which this happened while the cover-up happened as well?I think that is a very fundamental question that we have to ask ourselves.

”An emotional Bailey contrasted Mandelson’s actions with the late chancellor, Alistair Darling, who he said acted “with a thorough sense of honesty and decency”He also said the Bank was seeing evidence that AI was hitting hiring across the UK,Economists expect the Bank to cut interest rates at least two times this year, with Unicredit predicting four cuts by Christmas, bringing rates down to 2,75%,In other news…,Rio Tinto and Glencore have abandoned plans for a megamerger that would have created the world’s largest mining group.

The City money markets are indicating there’s a 50:50 chance that the Bank of England cuts interest rates at its next meeting in March.And BoE governor Andrew Bailey has told Bloomberg TV that that’s reasonable, and “not a bad place to be”.Bailey says:“So I think going into March, 50-50 is not a bad place to be...

because in a sense markets are asking themselves the same question that I’m asking.”Deutsche Bank’s chief UK economist, Sanjay Raja, also predicts a UK rate cut in March – but only two during 2026 as a whole.Raja says:We continue to think that further rate cuts are coming.We stick to our call for the next Bank Rate cut to come in March and a final rate cut to come in June taking Bank Rate to 3.25% - broadly consistent with our estimate of neutral.

What do we need to see for a Q1-26 rate cut? Data coming broadly in line with the Bank’s projections.Risks are still skewed to a slower pace of rate cuts.But we remain confident that Bank Rate will be cut twice this year.Analysts at Unicredit predict the Bank of England will manage four quarter-point cuts to UK interest rates this year.They told clients that today’s decision to leave rates unchanged was “a dovish hold”, adding:The BoE narrowly voted to leave the bank rate unchanged at 3.

75% today,The BoE’s communication was dovish in several ways: a knife-edge vote split, downward revisions to the BoE’s growth and inflation forecasts, and a more balanced risk assessment,We still expect the BoE to cut the bank rate four times this year, to 2,75%,This is likely to include a rate cut at the next meeting on 19 March.

Fashion retailer Quiz has closed its website and cut 109 head office and warehouse jobs after calling in administrators for the second time in a year.The company, which employs 565 people in total and was founded in Scotland in 1993, said it would continue to trade from its 40 stores and seven concessions while administrators from advisory firm Interpath consider options for its future.Further Quiz concessions trading in New Look and Matalan stores in the UK, are not part of the administration process.Quiz, which delisted from the Aim junior stock market in January last year and then closed 23 stores after falling into administration in February 2025, has been struggling for some time amid heavy competition in the fashion market and the closure of many department stores where it previously ran concessions.In 2019 it operated form 246 outlets including 75 standalone stores but some closed after it called in administrators in 2020, during the covid-19 pandemic.

Alistair McAlinden, head of Interpath in Scotland and joint administrator, said:“With Quiz the latest retailer to fall into administration, there’s no doubt it’s been a tough start to 2026 for the UK high street.“It’s our intention to continue to trade all stores and the concessions in Ireland as a going concern for as long as we can while we assess options for the business.We are tremendously grateful for the support of Quiz’s employees and directors who will work alongside us as we trade the business over the coming weeks.”Anyone who has made a purchase from Quiz online but whose items have not been despatched will not receive their items and those awaiting a refund will not receive one from Quiz.Administrators said those customers should contact their card provider for assistance.

Anyone wishing to return an item bought online can seek a replacement or substitute at a store.Customers who have made a purchase via the website prior to [5 February 2026] and who now wish to return the item(s) will not be able to return goods in the usual manner.Customers are consequently advised to go to their nearest Quiz store where a replacement or substitute item(s) equal to or less than the value of the original purchase can be provided.Shares in Glencore have tumbled by around 8%, as City investors react to the news that merger talks with Rio have floundered.Rio Tinto’s shares are down 1.

9%.Newsflash: Hopes of a mega merger in the mining sector have been dashed, again.Rio Tinto has announced that it is no longer considering a possible merger or other business combination with Glencore.It took the decision after concluding “it could not reach an agreement that would deliver value to its shareholders,” Rio told the City.It adds:Rio Tinto assessed the opportunity and came to this view through the disciplined lens set out at its Capital Markets Day in December 2025 - prioritising long-term value and delivering leading shareholder returns.

Under City rules, Rio cannot now bid for Glencore for six months.The two companies had begun talking about a merger that would create the world’s largest mining company in January, almost a year after previous discussions between the two mining companies collapsed.In another blow, job cuts in the US surged in January, a closely watched survey shows.The consultancy firm Challenger, Gray, & Christmas has reported that job cuts jumped to the highest level for any January since 2009.They say US-based employers announced 108,435 job cuts in January, more than double the 49,795 cuts announced in the same month last year, and three times more than were announced in December,Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, says:Generally, we see a high number of job cuts in the first quarter, but this is a high total for January.

It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026.Over in the US, the number of job vacancies has fallen sharply.The latest JOLTS jobs report show that the number of job openings fell by 386,000 in December to 6.5 millionThe number of job openings decreased in professional and business services (-257,000), retail trade (-195,000), and finance and insurance (-120,000).This may be a sign that the US labour market is cooling, or that companies are turning to artificial intelligence systems rather than hiring staff.

The eurozone is seeing “significantly higher” levels of investment in artificial intelligence, which is likely to boost productivity and growth in the future, Christine Lagarde said at today’s European Central Bank press conference,The ECB president said investment has been “one of the good news stories as far as the European economy is concerned” - especially private sector investment in AI,Lagarde said by this she meant “everything to do with AI”, including licensing deals and building data centres or hardware for AI products,She told reporters in Frankfurt:The really interesting thing from our perspective is how it [AI] will impact productivity and how it will contribute to inflation, depending on the level of improved productivity,There is a little bit of that [happening], but it’s going to take a while to unleash.

The ECB said the eurozone economy expanded by 0.3% in the final quarter of 2025, with growth mostly driven by the services, “notably in the Information and Communications sector.”Lagarde said the “adoption of productivity enhancing reforms and new technologies” by eurozone firms may drive up growth by more than expected in the future, by having positive effects on business and consumer confidence.Berenberg bank are predicting that the Bank of England will cut UK interest rates to 3%, from 3.75% today, by the end of 2026.

Andrew Wishart, senior UK economist at Berenberg, says:We predict a larger 75bp reduction in bank rate this year.Indications of reasonable economic momentum at the start of the year mean that next meeting, on 30 March, may be too soon for the next cut.However, it will be difficult for spending and activity to maintain momentum amid fiscal consolidation and a deceleration in household income growth.Meanwhile, growing competition between a rising pool of jobseekers battling for few available roles will likely cause wage inflation to slow more sharply than the forward-looking surveys predict.As a result, inflation is likely to remain close to 2% from Q2 onwards.

This will allow the BoE to shift its focus to stabilising employment with three more 25bp interest rate cuts.At their respective press conferences today, Bank of England chief Andrew Bailey and ECB president Christine Lagarde both welcomed the nomination of Kevin Warsh to run America’s central bank.Both Bailey and Lagarde signed a letter last month expressing “full solidarity” with outgoing Federal Reserve chair Jerome Powell, as he faced investigation from the Department of Justice.Donald Trump has now chosen Warsh to succeed Powell as Fed chief in May, once he is approved by the Senate….Over in Frankfurt, the European Central Bank has also left interest rates on hold.

The ECB’s governing council voted to leave the rate on its deposit facility at 2%,The rate on its main refinancing operations (where banks borrow from the ECB for a week) remains at 2,15%, while the marginal lending facility (providing overnight credit) sticks at 2,4%,We kept our key interest rates at their current levels.

We did this because we see inflation stabilising where we want it to be: 2%.Read today’s monetary policy decisions https://t.co/YDUtYLHQxy pic.twitter.com/2SRFCdxWJfECB president Christine Lagarde told reporters:Our updated assessment reconfirms that inflation should stabilise at our two per cent target in the medium term.

The economy remains resilient in a challenging global environment.Low unemployment, solid private sector balance sheets, the gradual rollout of public spending on defence and infrastructure and the supportive effects of our past interest rate cuts are underpinning growth.At the same time, the outlook is still uncertain, owing particularly to ongoing global trade policy uncertainty and geopolitical tensions.We are determined to ensure that inflation stabilises at our two per cent target in the medium term.We will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.

In particular, our interest rate decisions will be based on our assessment of the inflation outlook and the risks surrounding it, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission.We are not pre-committing to a particular rate path.Q: Does the political uncertainty facing the UK widen the ranges [of potential scenarios] that the MPC has to take into account?Governor Andrew Bailey says policymakers don’t spend their time discussing political risk, although obviously they take market pricing into account (so if political turmoil moves the markets, it will influence the Bank’s forecasts).And asked if the UK has sufficient safeguards regarding protection of sensitive information, in the light of the Mandelson-Epstein mesages, Bailey insists there is a “clear and unambigous legal framework” for dealing with market-sensitive information.The matter is now in the hands of the police.

Bank of England governor Andrew Bailey has added his voice to those condemning Peter Mandelson for leaking market-sensitive information at the time of the global financial crisis, our economics editor Heather Stewart writes.“I am shocked by what we are hearing,” Bailey said (see earlier post), when asked about the revelations at a Bank press conference.We do learn from that that there are times when … lobbying happens which has ethics attached to it which I do find shocking, frankly.Asked again about his personal feelings, Bailey, who worked with the Treasury on the response to the 2008 financial crisis, appeared to become emotional as he compared the actions of Mandelson to those of the late chancellor, Alistair Darling.Bailey reminds journalists at the Bank that he and his colleagues at the press conference, Clare Lombardelli and Dave Ramsden, all knew Darling (who died in 2023)