Bank of England expects budget will cut inflation by up to half a percentage point
The Bank of England expects Rachel Reeves’s budget will reduce the UK’s headline inflation rate by as much as half a percentage point next year.In a boost for the chancellor after last month’s high-stakes tax and spending statement, Clare Lombardelli, a deputy governor at the central bank, said its early analysis showed the policies would lower the annual inflation rate by 0.4 to 0.5 percentage points for a year from mid-2026.Reeves made cutting inflation a central ambition of her budget alongside a sweeping £26bn package of tax increases to cover a shortfall in the public finances and fund scrapping the two-child benefit policy.
Her measures to ease the cost of living included removing green subsidies from household energy bills and freezing rail fares.Levies on energy bills will now be paid out of general taxation, which the Treasury said could reduce bills by an average of £150 a year from next April.The Bank’s early assessment, which matches the prediction published by the Office for Budget Responsibility alongside Reeves’s statement, said the bulk of the reduction was down to the energy bills measures and the chancellor freezing fuel duty for motorists.Threadneedle Street is widely expected to cut interest rates at its policy meeting on Thursday next week.Financial markets are anticipating a cut in borrowing costs to 3.
75%, down from 4% and the sixth reduction since a recent peak of 5.25% in the middle of last year.Lombardelli, a member of the Bank’s rate-setting monetary policy committee (MPC), said the central bank would take into account Reeves’s budget measures, although cautioned that longer-term inflation prospects would be important to take into account.Although Reeves’s measures will have a short-term impact on bringing down headline inflation, other government policy measures could push up the rate in future.Business leaders have said higher employment costs from a rising living wage and strengthened package of workers’ rights could force them to push up prices.
“This is new information the committee will consider,” Lombardelli said of the budget.“[We need to consider] how much are you affected by one-off, one-year short-term impact of inflation.”She said views would differ on the MPC as to where the balance lay, but suggested a short-term headline rate cut could help stifle future inflationary pressures by influencing how businesses and consumers pushed for wage increases and set prices.“People’s experience of inflation changes how they may respond,” she said.“Energy is a really strong example of that.
These are very visible cost reductions in that space.”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 promotionWhile the chancellor’s measures aim to reduce bills, other costs are due to be added soon to cover the £28bn of spending on Great Britain’s gas and electricity grids approved by the regulator Ofgem last week.Headline inflation has fallen back from a peak of over 11% in late 2022, before accelerating again this year amid a rise in food prices, energy costs, utility bills, and as businesses passed on the cost of tax increases.Despite a fall to 3.6% in October, the headline rate remains above the Bank’s 2% target.
Threadneedle Street has previously indicated that inflation probably peaked at 3.8% this summer, and suggested before the budget that inflation could fall to about 2.5% next year.
Christmas dinner in a restaurant or kitchen carnage at home?
Christmas dinner? At home or in a restaurant? It’s at this juncture of the year, with Christmas dinner hurtling towards us, that you may well find yourself muttering: “Well, we could always go out!” Who could blame any home cook for wanting to shove this great burden on to someone else’s back, especially since every culinary TV show, magazine article and advertising break since mid-November has hammered home what a colossal faff Christmas dinner actually is. No, it’s not just a slightly posh Sunday roast with a few more guests.Christmas dinner in the UK these days is more like a cross between dinner at Balmoral and 4 July at Mar-a-Lago. The table has to be heaving with holly-embossed crockery, the carrots must be bejewelled in star anise and Himalayan pink pepper, the turkey has to be brined in aromatic salt water and your roasties shaken in polenta and smothered in duck fat. If you’re the designated martyr organising proceedings, field-marshalling everything and cooking this tinsel-strewn palaver, it is common to try instead to divert it all to the local pub, where they’re doing “turkey and all the trimmings” for £79 a head (and including a cracker and a pre-dinner “glass of something sparkly”)
Christmas mixers: Thomasina Miers’ recipes for fire cider and spiced cocktail syrup
Despite being known for shaking a cocktail on Instagram now and again, very little will induce me to last-minute cocktailery if I am entertaining a serious number of guests. However, a good drinks recipe that you can prep in advance is a lovely thing to dazzle your friends with and to gift over Christmas. With or without alcohol, this pair look good and taste delicious, and should help everyone ease into the December festivities.This makes a delicious base to which you can add soda, juice, tonic or any other mixer for a thirst-quenching and delicious alternative to an alcoholic drink in the evening. Prep 15 minInfuse 1 week+ Makes 500ml bottleFor the fire cider2 jalapeños, finely sliced seeds and all1 large thumb of ginger, peeled and finely sliced2 branches fresh rosemary1 cinnamon stick3 heaped tbsp honey2 garlic cloves, peeled1 thumb turmeric, peeled and finely sliced (optional)350ml apple cider vinegarFor the cranberry fizz (serves 1)30ml fire cider 75ml cranberry juice1 wedge of orange Sparkling water, to topMix all the ingredients for the fire cider in a sterilised 500ml jar, then put in the fridge for at least week, and preferably three to extract the most goodness from the ingredients
Jamie Oliver to relaunch Italian restaurant chain in UK six years after collapse
Jamie Oliver is to revive his Jamie’s Italian restaurant chain in the UK, more than six years after the celebrity chef’s brand collapsed.Jamie’s Italian is poised to be relaunched in the spring, starting with a restaurant in London’s Leicester Square.Oliver’s return to the UK restaurant scene is being backed by Brava Hospitality Group – the private equity-backed group that runs the Prezzo chain – which intends to relaunch the brand across the UK.“As a chef, having the chance to return to the high street is incredibly important to me,” he said. “I will drive the menus, make sure the sourcing is right, the staff training, and ensure the look and feel of the restaurant is brought to life in the right way
Helen Goh’s recipe for edible Christmas baubles | The sweet spot
These edible baubles make a joyful addition to the Christmas table or tree. Soft, chewy, marshmallow-coated Rice Krispies are studded with pistachios and cranberries, chocolate and ginger, or peppermint candy cane; they’re as fun to make as they are to eat, and they make a perfect little gift. To add a ribbon for hanging, cut small lengths of ribbon, then loop and knot the ends. Push the knotted end gently into the top of each ball while it’s still pliable, then reshape around it, so it holds the knot securely as it sets. Alternatively, wrap each bauble in cellophane, then gather at the top and tie with a ribbon, leaving a long loop for hanging
A gentle trade in edible gifts binds communities together
A guest at our restaurant recently told me about her mother’s seasonal side hustle, though no one would have dared call it that out loud: in the weeks before Christmas, she became a quiet merchant of puddings. The proper kind of pudding, too: all dense but not leaden, heavy with prunes and warm with careful spicing.As December crept in, forgotten cousins and semi-estranged uncles seemed to find reasons to drop by her place. She never advertised the fact, of course, but everyone knew that if you came bearing even a modest offering, you might just leave with a pudding wrapped in waxed paper and still warm with possibility. The exchanges were subtle
Chocolate tart and zabaglione: Angela Hartnett’s easy make-ahead Christmas desserts – recipes
When you’re the cook of the house, you spend quite enough time in the kitchen on Christmas Day as it is. And, after those time-consuming nibbles, the smoked salmon starter and the turkey-with-all-the-trimmings main event, the last thing you want is a pudding that demands even more hands-on time at the culinary coalface. For me, the main requirement of any Christmas dessert is that it can be made well in advance, not least because, by the time the pudding stage comes around, I’ll be completely knackered and more than ready to put up my feet and finally relax (or, more likely, fall asleep on the sofa).Prep 15 minRest 3 hr+Cook 40 minServes 6-8For the sweet pastry500g plain flour, plus extra for dusting 150g caster sugar 250g cold butter, diced2-3 eggs, lightly beatenFor the filling640g 70%-cocoa dark chocolate, broken into small pieces800ml double cream 64g glucose syrup 64g cold butter, cubed 100g roasted hazelnuts, lightly choppedPut the flour and sugar in a large bowl, stir to combine, then add the diced butter and work it in with your fingertips until the mix takes on the consistency of rough breadcrumbs. Add two of the beaten eggs, then mix until the dough comes together into a ball; if need be, add the third beaten egg, but take great care not to overwork the dough
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