The Bank of England (BoE) kept interest rates at the record low rate of 0.1% yesterday

By Suzanne Evans, Director, Political Insight

The Bank of England (BoE) kept interest rates at the record low rate of 0.1% yesterday as members of the central banks’ Monetary Policy Committee(MPC) voted 7-2 in favour of no change. Governor Andrew Bailey said the decision had been a "close call" and that the MPC wanted to see "more evidence" of how the labour market was evolving – and in particular wanting to see how the jobs market coped with the end of the furlough scheme - before raising interest rates. However, Bailey gave the strongest hint yet that interest rates will have to be raised at some point. "We think there will be some need to increase interest rates to bring inflation sustainably back to target. And we will be ready to do that," he said.  While the London stock markets rallied on the news, the pound fell by nearly 1% against the dollar to $1.3556 following the Bank's decision, reflecting the fact that investors had bet on a rate rise, convinced the BoE would be the first of the world's big central banks to raise borrowing costs after the COVID-19 pandemic. The yield on two-year British government bonds also fell by the most since the day after the Brexit vote in 2016.
 
Global food prices have hit the highest level in over a decade after rising by more than 30% in the last year, the United Nations Food and Agriculture Organization says. The BBC says disruptions to supplies, high commodity prices, factory closures, a worker shortage and political tensions are helping to push up prices. Brigit Busicchia from Macquarie University said speculation on global markets is also contributing to price volatility: "Since the 1990s, the deregulation of commodity futures trading has made it possible for institutional investors to enter this market on a large scale," she said, adding: This is having a particular impact on countries which rely on food imports. She also highlighted that rising food prices are typically felt most acutely by the poor, as disadvantaged groups are pushed further into poverty and that this has the potential to heighten social and political tensions.
 
The Welsh government has called for the mining licence for Aberpergwm colliery, near Glynneath, to be cancelled, the BBC reports. Deputy Climate Change Minister Lee Waters said he had urged the UK government to stop "40 million tonnes of coal" being extracted "from Welsh soil" over the next 18 years to prevent a hundred million tonnes of carbon dioxide being released into the atmosphere. EnergyBuild, the mine operator, says his figures are wrong and that the mine provides 160 well paid jobs in the Vale of Neath area, plus 16 apprenticeships, and has "brought more than £100m of investment into the locality". Aberpergwm mine is the only producer of high-grade anthracite in Western Europe and it supplies the nearby Tata steel plant in Port Talbot. Managing director Rhidian Davies said: "Anthracite is a highly desirable mineral used predominately for its manufacturing characteristics as opposed to its thermal properties". He added: "Our products are in significant demand to support the transition to a sustainable green economy." The Welsh government says it is up to the UK Secretary of State for Business, Energy and Industrial Strategy (BEIS), Kwasi Kwarteng, to act to intervene, but a UK government spokesperson insists it is a matter for the Welsh government.
 
The Business, Energy and Industrial Strategy Committee has called for investigations into the owners of Liberty Steel and boss Sanjeev Gupta in a bid to avert another crisis in the industry. Auditors that signed off the accounts at Liberty's parent GFG Alliance should also face questions, MPs on the committee also concluded in their report, which highlights "red flags" and "systemic risks" that should have alerted authorities to the problems. The steel industry is too important to lurch from "crisis to crisis", the MPs concluded. Gupta's GFG Alliance was forced into an urgent financial restructuring when its key lender, Greensill Capital, collapsed. Darren Jones MP, chairman of the BEIS committee, said the steel industry was too important strategically to be left to the mercy of such things as international competition, high risk finance, and volatile energy prices. It was time for a Steel Sector Deal to ensure the industry's resilience, with better use of public procurement to support UK steel and help towards transitioning to a low-carbon future, he said.
 
The number of people shopping on Britain’s high streets last month beat all major economies in the European Union, new data has shown. According to the British Retail Consortium, total UK footfall saw a 3.2 percentage point improvement in October compared with the month before, boosted by the school half term and Halloween. However, it decreased by 13.7% when compared with a year-on-two-years basis, Yahoo Finance UK reports. The latest figures were compared with the same period before the pandemic, as retail in 2020 bounced between being open and closed, impacting footfall significantly. But the figures did come in ahead of Europe, with Spain’s footfall down almost a fifth, Germany slumping 26.2%, and Italy and France declining 34.6% and 34.9%, respectively.
 
 
Over half of licensed taxi drivers operating before the pandemic have not returned to the trade. The Licensed Private Car Hire Association estimates the industry is short of 160,000 of the previously 300,000-strong workforce. Many drivers left the industry during lockdowns as demand plummeted. The shortage has prompted concerns over the safety of women, students and night-time workers struggling to get home.
 
Ultra Electronics has won a £65m communications contract with the Ministry of Defence. The company said yesterday the deal would "deliver future capability that provides the UK Armed Forces with state-of-the-art communications tools".
 
US pharmaceutical firm Merck is set for a bumper windfall after the UK became the first country to approve its pill designed to treat symptomatic Covid-19 infections, Yahoo Finance UK reports. The company said on Thursday that the Medicines & Healthcare Products Regulatory Agency (MHRA), the UK's medicines regulator, had granted authorisation for use of its oral tablet, called molnupiravir. It will be given twice a day to vulnerable patients, who have recently been diagnosed with Covid-19, under the trademark Lagevrio. It can be taken at home within five days of infection. During its clinical trials, the drug cut the risk of hospitalisation and death by half for people with with mild-to-moderate symptoms. Data from 775 patients showed that none of the participants had died during the first 29 days of the study, compared to eight who received a placebo.
 
Electronics retailer Currys has announced a joint venture with ride-hailing service Uber to deliver its products in as little as 30 minutes. Customers in 12 London boroughs will take part in a three-month trial starting 15^th November which enables them to order any of 1,800 items, all of which weigh under 7kg and are able to fit into a courier’s bag. The delivery charge is a flat £5. Customers can order through the Currys website or app up to two hours before stores close.
 
Sainsbury’s has been forced to delay a toy promotion at its Argos chain and warned there would be lower stocks of electronic goods for Christmas as supply chain problems and a shortage of computer chips continue to challenge retailers. CEO Simon Roberts said its annual toy sale had been delayed by two weeks – until next week – because the goods had only just reached ports in the UK.
 
Shares in BT surged as much as 6% yesterday after it reinstated its dividend payments and updated its cost-savings target. Yahoo Finance UK reported the telecommunications company said it would achieve an additional £2bn of cost savings by the end of the financial year in 2024, a year ahead of schedule, while announcing that it will pay a 2.31p per share dividend after suspending payments last year.
 
NatWest will not lend to any new customers operating coal-fired power plants or to existing clients planning to increase their capacity, in a move to toughen its policy on climate change. "We have committed to not lend new money to new coal projects, to phase out lending to coal in the UK by 2024, and globally by 2030," its chief executive Alison Rose told Reuters. The new rule will start on 1^st January and apply to both UK and non-UK customers who have UK coal production, coal fired generation and coal related infrastructure, a bank policy document shows. NatWest was one of a number of companies to join the Powering Past Coal Alliance this week.
 
Metro Bank shares went up 30% yesterday after confirmation it had received a takeover approach from funds affiliated with US private equity firm the Carlyle Group. Responding to recent press speculation, the bank said it has engaged with Carlyle in relation to its possible offer and a further announcement will be made as and when appropriate. "In the meantime, shareholders are advised to take no action," it said. Carlyle has until 2 December to either announce a firm intention to make an offer or walk away.
 
BP Plc is in talks to buy JX Nippon Exploration and Production Ltd.’s stake in the North Sea Andrew Area oil and gas fields, according to people with knowledge of the matter, reversing an earlier plan to sell its own holding. Bloomberg says the energy major had previously attempted to sell its share in the project to Premier Oil Plc, but the deal was scrapped following a reverse takeover of Premier by Chrysaor Holdings Ltd. While there’s no certainty BP will end up buying the stake, an acquisition would run counter to its approach to the aging North Sea where the company has been offloading assets over the past decade. Representatives for the Japanese company weren’t available for comment outside of its normal office hours. BP declined to comment.
 
British manufacturer HellermannTyton, which has sites in 37 countries and over 3,800 global employees, is investing £9 million to double the size of its factory in Plymouth. The cable specialist’s huge expansion is expected to create 100 jobs. Also in Plymouth, Japanese-owned Kawasaki Precision Machinery, a supplier to JCB, John Deere and Caterpillar, is ramping up production and creating dozens of new jobs to meet the increasing global demand for its hydraulic pumps and motors.
 
Ibstock, the UK's largest brickmaker with 21 brickworks across the country, is set to build a new £50 million factory in Nostell, West Yorkshire, to increase brick slip manufacturing capacity to 60 million per annum. Plans include development of a new ‘Net Zero’ brick slip.
 
London-listed Sureserve has promoted interim chief operating officer and chief financial officer Peter Smith to the role of chief executive. Smith has been with the business since July 2019 and has "extensive" knowledge of both the business and the energy markets in which Sureserve operates.
 
A director of a Cookstown firm in Northern Ireland has told the BBC they were the victims of a meticulous and premeditated fraud after their office manager stole almost £2m. Julie McBrien from Fivemiletown was given a five-and-a-half-year prison sentence at Dungannon Crown Court on Wednesday. She admitted taking the money to fund her luxury lifestyle. Her employer, Northern Mouldings Ltd, supplies MDF and skirting to builders' merchants. McBrien started as a marketing executive, progressing to office manager and had sole control of the finances, producing monthly reports for the directors. She finally got caught during an audit when a statement from the firm's bank showed £5,000 in its account, not £300,000 which McBrien had claimed. More than 600 fraudulent transactions were discovered over an eight-year period.
 
Airbnb has had its best ever quarter, beating records for both profits and revenue. The online travel company’s net income rose 280% year over year to $834 million, on revenue of $2.2 billion. “This summer, we reached a major milestone of 1 billion cumulative guest arrivals as more people got vaccinated and travel restrictions were relaxed,” the company said in a shareholder letter on Thursday. “Host earnings reached a record $12.8 billion in the quarter, and active listings continued to grow.”
 
Fresh concerns have been raised about China's property sector as Kaisa Group has become the latest developer to miss a payment to investors, leading trading in the company’s shares and three of its units to be halted in Hong Kong on Friday. Kaisa said it was facing unprecedented pressure on its finances due to a challenging property market. Rival developer Evergrande Group is still reeling under the weight of more than $300bn (£222bn) of debt and its potential collapse has sent shockwaves through global markets.
 
Eric Adams, the mayor-elect for New York City, has said he would like his first three pay checks in bitcoin to signal his intention to make New York the "centre of the cryptocurrency industry". The former police captain was elected this week to take over at the end of mayor Bill de Blasio's term in January.

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