Starmer names former Bank deputy governor as his chief economic adviser
The former Bank of England deputy governor Minouche Shafik is set to join Keir Starmer’s team as chief economic adviser.In a boost to the prime minister’s office in the run-up to the autumn budget, Lady Shafik is expected to take on the role after a year heading a Foreign Office review of the government’s foreign aid spending.A member of the House of Lords, Shafik resigned last year as the president of Columbia University after criticism of the treatment of Jewish students during anti-Israel protests at the institution’s New York campus.Shafik was previously head of the London School of Economics, a deputy governor of the International Monetary Fund and the top civil servant at the now defunct Department for International Development.In 2019 she was touted as a possible contender to replace Mark Carney as the Bank of England’s governor.
No 10 has sought to give more weight to its economic unit after a series of missteps that some Downing Street advisers have blamed on naivety inside the Treasury.Most recently, Rachel Reeves was forced to back down in the face of a backbench rebellion after she proposed cutting disability benefits.That retreat left the chancellor facing an even tougher challenge in her autumn budget, in which she is expected to have to set out plans to close a deficit of between £20bn and £40bn.Starmer is known to want high-level economic advice of his own, separate to the support given to the chancellor.Sajid Javid, a former chancellor, quit his post after the then prime minister, Boris Johnson, made clear that all Treasury decisions would need to be agreed by No 10.
It is understood that Reeves is unlikely to quit after the appointment of Shafik, but rumours have swirled around Westminster that the chancellor’s tenure could be cut short if she fails to steer through a politically and economically successful budget.Reeves is also seeking to attract heavyweight advisers to the Treasury after the LSE’s John Van Reenen scaled back his support to return to academia and Anna Volero departed.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 promotionThere is likely to be criticism of Shafik’s appointment from some inside No 10 who wanted an expert in the UK economy to guide Starmer’s policymaking.Shafik, who was raised in Egypt before moving to the US as a child, has spent most her working life in organisations focused on resolving global poverty.Her supporters would argue that two and half years on the Bank of England’s interest-rate setting committee and six years at the LSE gave her a deep understanding of the UK economy.
Starmer’s office was contacted for comment.
P&O chief who prompted outrage by sacking nearly 800 staff is to quit
The chief executive described as “Britain’s most hated boss” after sacking almost 800 workers at P&O Ferries is to leave the company.Peter Hebblethwaite prompted outrage in 2022 after P&O Ferries dismissed 786 staff and replaced them with low-paid agency workers, who received considerably less than the UK minimum wage.At the time the cross-Channel ferry company was accused of operating like “pirates of the high sea” and during questioning at a parliamentary hearing Darren Jones, then chair of the business committee, asked: “Are you in this mess because you don’t know what you’re doing, or are you just a shameless criminal?”Hebblethwaite always said his actions were the only way of saving the ferry group from going bust. No criminal charges were brought after the sackings.A spokesperson for P&O Ferries, a subsidiary of the Dubai-based ports operator DP World, said: “Peter Hebblethwaite has communicated his intention to resign from his position as chief executive officer to dedicate more time to family matters
UK bank shares tumble after call for windfall tax on lenders in budget
UK bank shares tumbled on Friday, cutting the combined stock market value of some of the biggest companies in the sector by more than £6bn, as fresh calls for a windfall tax on large lenders in the autumn budget spooked investors.Calls for a tax grab, in a paper written by the Institute for Public Policy Research (IPPR) thinktank, took a toll on some of the UK’s biggest high street banks.NatWest was the biggest faller on the FTSE 100 on Friday, down nearly 5%. Shares in Lloyds Banking Group fell more than 3% and Barclays was down 2%. HSBC shares fell nearly 1%
Pre-budget lift for Rachel Reeves as UK business confidence rises
Confidence among UK businesses has grown despite anxiety about the state of the economy, in a rare slice of positive news for the chancellor, Rachel Reeves, in the run-up to her autumn budget.An August poll of UK companies by Lloyds Bank showed that improved sentiment among manufacturers and retailers helped push overall optimism within UK plc up by two percentage points, with 54% of companies now feeling confident in the current environment.It marked the fourth consecutive monthly increase in overall business sentiment, according to the Lloyds business barometer, driven by a growing number of businesses – roughly 63% – feeling strong about their own trading prospects. On that measurement alone, confidence reached its highest level since 2014.About half of all businesses now expect to hire more staff in the coming year despite growing costs
Bank of England show to remember lost splendours of Sir John Soane building
A century ago the wrecking ball demolished the halls, courtyards, arches and domes of one of London’s best-loved buildings in what the architectural historian Nikolaus Pevsner would decry as “the greatest architectural crime” to befall the capital in the 20th century.The Old Lady of Threadneedle Street (as the Bank of England was nicknamed after a satirical 1797 cartoon of William Pitt the Younger, prime minister from 1783 to 1801, wooing an old lady dressed in pound notes) has been the heart of the City since 1734.Refashioned and expanded over the decades, after the 1780 Gordon riots, when rioters scaled the neighbouring church of St Christopher le Stocks to throw projectiles at the Bank, the church was demolished to allow the Bank’s expansion westwards along Threadneedle Street.In 1788 the Bank appointed Sir John Soane as architect and surveyor. His redesign, which he continued until 1833, resulted in arguably his greatest work, “the pride and boast” of his life
Fed governor Lisa Cook sues Trump over his ‘illegal attempt’ to fire her
The Federal Reserve governor Lisa Cook has filed a lawsuit against Donald Trump over his “unprecedented and illegal attempt” to fire her, calling it an attempt to undermine the central bank’s independence.The lawsuit – filed by Cook in federal court in Washington on Thursday – sets the stage for a legal battle over the US president’s extraordinary push for greater control of the central bank.A federal judge scheduled a hearing for the case on Friday at 10 am ET, with the case likely to end up at the supreme court.Trump tried to dismiss Cook on Monday, announcing that he was removing her from her position on the Fed’s board of governors “effective immediately” over an unconfirmed allegation from one of his allies that she had obtained a mortgage on a second home she incorrectly described as her primary residence.But Cook stood her ground, arguing that Trump had “no authority” to fire her
Make Drax wait for its next subsidy deal. An FCA investigation is serious | Nils Pratley
There is already a scandal of bad accounting at Drax, one could say mischievously. It’s the one that maintains that transporting wood pellets from North America to burn in North Yorkshire is a “carbon neutral” activity because replacement trees absorb carbon dioxide as they grow. You don’t have to be a green lobbyist to think there’s something wrong there. As the research group Ember regularly reminds us, Drax is the UK’s biggest emitter yet qualifies for renewables subsidies.That weirdness in the methodology is one for the government to justify
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