The Bank of England is expected to keep interest rates on hold at a rate of 4.5% when the Monetary Policy Committee makes its announcement today, the BBC reported. Although no change is expected today, many analysts are forecasting two further cuts by the end of the year.
This comes as the Independent reports that the Federal Reserve in the US also kept its benchmark interest rate unchanged and signalled that it still expects to cut rates twice this year, although it said the outlook is more uncertain.
Elsewhere in the UK economy, Rachel Reeves is expected to announce the biggest spending cuts since austerity at next week’s spring statement after ruling out tax rises as a way to close her budget deficit, The Guardian reports. The chanceller’s announcements could see reduction of as much as 7% for certain departments over the next four years.
Financial Times also reports that the Chancellor will not raise taxes next week as they tried to dismiss conservative claims that she is preparing an ‘emergency Budget’. Reeves’ allies said she was determined to reassure financial markets by maintaining a “reasonable” amount of headroom. But government officials rejected suggestions Reeves would try to increase that cushion with larger spending cuts than expected.
The impact of the chancellor’s budget announcements in September are starting to be felt as Shepherd Neame, Britain’s oldest brewer, has said it will raise its beer prices in response to rising taxes and wage costs taking effect in April. It said the policies would cost about £2.6m a year (BBC).
Another apparent consequence is reported by The Guardian which says the UK’s high streets are expected to empty out at a faster pace this year due to the increased costs from the budget. The rate of store closures is forecast to rise after a slowdown to 10 a day last year from 13 a day in 2023, according to research by Greenstreet for the advisory firm PwC.
The same report also reveals that the shutters were brought down for the final time on 12,804 stores last year, a decline from 14,801 closures in 2023, reports The Times. Jacqueline Windsor, the head of retail at PwC UK, said the new figures point to “a cautious optimism” for the retail sector in the year ahead.
Ben & Jerry’s has said its chief executive, David Stever, was being removed by its parent company, Unilever, in a growing dispute over the ice cream company’s political activism. The BBC reports the allegation was part of a legal case filed in a US court by Ben & Jerry’s that says Unilever violated a merger agreement by trying to silence its “social mission”. Unilever said it was “disappointed that the confidentiality of an employee career conversation had been made public”.
British employers can find it cheaper to replace workers who fall sick than to invest in their retention, the former boss of John Lewis has said in a report that calls for stronger incentives for businesses to help tackle ill health, reports the Financial Times.
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