THE BANK OF ENGLAND (BoE) has cut interest rates by 0.25 percentage points to 4.5 per cent, with some policymakers supporting a bigger reduction to counter economic slowdown. However, the central bank signalled a cautious approach to future cuts, citing inflation concerns and global uncertainty.
The BoE also revised its economic growth forecast for 2025, reducing it by half. Chancellor Rachel Reeves, who has been advocating for faster economic growth, faces a challenge as inflation is now projected to be nearly double the 2 per cent target this year.
Governor Andrew Bailey described the expected rise in inflation as a "bump in the road" before it declines again.
The rate cut, from 4.75 per cent to 4.5 per cent, was in line with expectations from a Reuters poll of economists. However, investors were surprised by Monetary Policy Committee (MPC) member Catherine Mann, who had previously opposed rate cuts but joined Swati Dhingra in calling for a larger reduction to 4.25 per cent.
Bailey indicated that further rate cuts could follow but said decisions would be made "meeting by meeting" based on economic conditions.
Following the announcement, financial markets initially reacted by anticipating a faster pace of rate cuts this year. Sterling dropped by as much as 1 per cent against the dollar before recovering.
"Outside of the surprise voting outturn... other parts of the BoE communications look more hawkish, suggesting that some caution should be taken in over-interpreting what the dovish vote split means for the rate outlook," said Nikesh Sawjani, senior UK economist at Lloyds Bank.
Investors have factored in two or three more quarter-point cuts by the end of 2025, with little change in expectations from before the announcement.
Britain’s economy has seen little growth since mid-2024, with businesses uncertain about economic policies under the new Labour government, the potential for a global trade war led by US President Donald Trump, and rising costs.
The BoE estimates that economic output contracted by 0.1 per cent in the final quarter of 2024 and revised its 2025 growth forecast down to 0.75 per cent, citing weak consumer and business confidence and slow productivity growth.
While the impact of potential US trade tariffs remains uncertain, the BoE warned that higher global tariffs could contribute to slower growth.
Bailey said global economic conditions influenced the BoE’s decision to add the word "careful" to its guidance on rate cuts, alongside the existing description of a "gradual" approach.
Thursday’s cut was the third since the BoE began reducing borrowing costs from a 14-year high in August. Despite the reduction, UK interest rates remain among the highest among advanced economies.
Some policymakers called for caution in future rate cuts due to concerns that weak productivity could push up inflation.
Others argued for a "careful" strategy, which they suggested could allow for a greater willingness to lower rates.Weaker outlook The BoE’s latest projections indicate a more challenging economic outlook than its November forecasts.
Inflation, currently at 2.5 per cent, is expected to rise to around 3.7 per cent in the third quarter of this year, driven by higher energy costs and anticipated increases in regulated water bills and bus fares. This is up from a previous forecast of 2.8 per cent.
The central bank now expects inflation to return to its 2 per cent target by the end of 2027, six months later than previously estimated.
Bailey maintained that inflation would ease due to factors such as slowing wage growth and a slight increase in unemployment. Growth forecasts for 2026 and 2027 were revised slightly upward to 1.5 per cent from 1.25 per cent.
These forecasts were based on market expectations that rate cuts would happen more slowly than projected in November, with interest rates now expected to fall to around 4.25 per cent this year compared to earlier estimates of 3.75 per cent.
If the projections hold, the BoE would have limited room for further rate cuts this year if it aims to bring inflation down gradually. However, Bailey said the forecasts were only one factor in the MPC’s decision-making.
Among the two policymakers who voted for a larger cut to 4.25 per cent, one described their stance as "activist," a term previously used by Mann.
That member argued for a 0.5 percentage point cut to send "a clearer signal of financial conditions appropriate for the United Kingdom," though they acknowledged that rates would need to remain elevated.
The other policymaker in favour of a bigger cut said weaker demand was likely to lower inflation and warranted a stronger response.
A PUBLIC inquiry begins on Tuesday into the murders of three young girls at a Taylor Swift-themed dance event in Southport last year.
The inquiry will examine whether the attack could have been prevented and how future incidents might be avoided.
The attack took place during a summer holiday event in northern England in July, when teenager Axel Rudakubana, who had a history of violence and an interest in genocide, carried out a knife attack. Three girls were killed and 10 others injured.
The incident led to widespread shock and was followed by several days of rioting across the country.
Rudakubana, who was 17 at the time, was sentenced in January to a minimum of 52 years in prison. He pleaded guilty just before his trial was due to begin. Prosecutors said there was no clear motive, describing the attack as driven by a desire to commit mass murder.
Following his conviction, prime minister Keir Starmer ordered an inquiry after it emerged during the trial that Rudakubana had been referred to a counter-radicalisation programme three times, but no further action had been taken.
He had also been previously arrested while carrying a knife and had admitted to possessing an al Qaeda training manual as well as making the poison ricin.
Adrian Fulford, who is leading the inquiry, said in a statement: "My focus throughout this inquiry will be a thorough and forensic investigation of all the circumstances surrounding the attack and the events leading up to it."
The first part of the inquiry will examine Rudakubana’s background and his contact with public bodies. A second phase will explore the wider issue of children becoming involved in violence, which has become an increasing concern for UK authorities.
Lawyers representing the families of the three girls – Bebe King, six, Elsie Dot Stancombe, seven, and Alice Dasilva Aguiar, nine – said they hoped the inquiry would help bring out the facts.
"We know that nothing the inquiry reveals, or subsequently recommends will change the unimaginable loss felt by the families of Elsie, Alice and Bebe, but we all now have a responsibility to ensure that something like this never happens again," they said in a statement.
By clicking the 'Subscribe’, you agree to receive our newsletter, marketing communications and industry
partners/sponsors sharing promotional product information via email and print communication from Garavi Gujarat
Publications Ltd and subsidiaries. You have the right to withdraw your consent at any time by clicking the
unsubscribe link in our emails. We will use your email address to personalize our communications and send you
relevant offers. Your data will be stored up to 30 days after unsubscribing.
Contact us at data@amg.biz to see how we manage and store your data.
The King said the public should draw on the 'extraordinary courage and compassion' shown in response to the attacks. (Photo credit: X/@RoyalFamily)
PRIME MINISTER Keir Starmer and King Charles on Monday paid tribute to the unity shown in the aftermath of the 7 July bombings in London, as the country marked 20 years since the attacks.
On 7 July 2005, four Islamist extremists carried out suicide bombings at Aldgate Station, Edgware Road, King's Cross and Tavistock Square. The attacks killed 52 people and injured hundreds more.
Events are being held across London to commemorate the anniversary. Members of the royal family are expected to join survivors and families of the victims.
The King said the public should draw on the "extraordinary courage and compassion" shown in response to the attacks.
"We remember with profound sadness the 52 innocent people who were killed in senseless acts of evil -- and the enduring grief of their loved ones," he said in a statement published by the Press Association.
"In doing so, we should also remember the countless stories of extraordinary courage and compassion that emerged from the darkness of that day.
"The selfless bravery of our emergency services, transport workers, and fellow citizens who rushed towards danger to help strangers reminds us of the very best of humanity in the face of the very worst."
‘We stood together then, and we stand together now’
Starmer said, "Those who tried to divide us failed."
"We stood together then, and we stand together now -- against hate and for the values that define us of freedom, democracy and the rule of law."
He added, "We honour the courage shown that day -- the bravery of the emergency services, the strength of survivors, and the unity of Londoners in the face of terror."
The Duke and Duchess of Edinburgh will attend a National Service of Commemoration at St Paul’s Cathedral. A separate service will also take place at the memorial in Hyde Park for survivors and families of the victims.
Call for unity and vigilance
Charles said, "While the horrors will never be forgotten", the country "may take comfort from the way such events rally communities together".
"It is this spirit of unity that has helped London, and our nation, to heal," he said.
"Let us therefore use this 20th anniversary to reaffirm our commitment to building a society where people of all faiths and backgrounds can live together with mutual respect and understanding."
Home secretary Yvette Cooper, speaking ahead of the anniversary, said Islamist and right-wing extremism remained the most significant threats to the UK.
(With inputs from agencies)
Keep ReadingShow less
The win was India’s first Test victory in nine matches at Edgbaston, where they had previously suffered seven defeats and a draw.
INDIA defeated England by 336 runs in the second Test at Edgbaston on Sunday, levelling the five-match series 1-1. Akash Deep, playing in place of rested pacer Jasprit Bumrah, took 10 wickets in the match — his first 10-wicket haul in Test cricket.
England were bowled out for 271 while chasing a target of 608. Deep took 6-99 in the second innings, ending with match figures of 10-147 — the best of his eight-Test career so far.
Jamie Smith was England’s top scorer in the second innings with 88, following his unbeaten 184 in the first. No other England batter crossed fifty.
The win was India’s first Test victory in nine matches at Edgbaston, where they had previously suffered seven defeats and a draw.
Gill creates Test history
India captain Shubman Gill became the first player in Test cricket to score 250 and 150 in the same match. Gill made 269 in the first innings and followed it up with 161 off 162 balls in the second. He now has three centuries in his first two Tests as captain, including a 147 in the series opener at Headingley, where India lost by five wickets.
India were also much improved in the field in this match. "The way we came back with our bowling and fielding was tremendous," Gill said.
Speaking about Deep, he added, "He bowled with so much heart and skilfully with his lengths. He moved it in both directions, which was tough to do. He was magnificent for us."
Gill confirmed that Jasprit Bumrah will “definitely be back for Lord’s”, where the third Test begins on Thursday.
England struggle in the chase
England resumed day five on 72-3 after a 90-minute rain delay. No team has ever chased more than 418 to win in the fourth innings — a record held by West Indies since 2003.
Ollie Pope was the first to fall on Sunday, failing to add to his overnight 24. He was bowled by Deep after getting a delivery that bounced extra and hit the stumps. His dismissal was cheered by a large Indian crowd.
Ben Stokes, on a king pair after a golden duck in the first innings, managed to avoid a second nought with a legside flick. But England soon slipped to 83-5 when Harry Brook was trapped lbw by Deep for 23. Brook had made 158 in the first innings, sharing a 300-plus stand with Smith.
Stokes and Smith added 70 for the sixth wicket before Stokes was dismissed by Washington Sundar for 33 in the last over before lunch. It was the first wicket in the match taken by someone other than Deep or Siraj. England went to lunch at 153-6.
Smith reached 88 with two successive sixes off Deep. But he was out next ball, caught after misjudging a slower delivery, giving Deep his fifth wicket of the innings.
Deep ended the match by dismissing Brydon Carse, who was caught at cover by Gill.
(With inputs from agencies)
Keep ReadingShow less
Currently, one in four families with children under five do not have access to local children’s centres or Family Hubs. (Representational image: iStock)
THE UK government has announced the nationwide rollout of Best Start Family Hubs across every local authority, aiming to support 500,000 more children by 2028.
The hubs are intended to offer easier access to family services and reduce pressure on parents.
Nationwide rollout and funding
Currently, one in four families with children under five do not have access to local children’s centres or Family Hubs.
The new initiative, backed by over £500 million, will create up to 1,000 hubs by the end of 2028, with all local authorities expected to have a hub by April 2026.
Areas including Warrington, Leeds, Reading, and Somerset are among those to gain access.
The hubs will provide services such as early language support, parenting sessions, housing advice, breastfeeding support, mental health services, and debt and welfare guidance.
A new digital platform will also be launched to connect parents with local hubs and the NHS App.
Quotes from ministers and organisations
Education Secretary Bridget Phillipson said: “It’s the driving mission of this government to break the link between a child’s background and what they go on to achieve – our new Best Start Family Hubs will put the first building blocks of better life chances in place for more children.”
Health and Social Care Secretary Wes Streeting said: “By bringing together early support services and investing £500 million in children’s development, we’re taking preventative action that will improve lives and reduce pressure on the NHS – a key part of our 10 Year Health Plan.”
Anna Feuchtwang, CEO of the National Children’s Bureau, said: “The Prime Minister’s Plan for Change set out his ambition to improve outcomes in early childhood. Now the government has put its money where its mouth is and committed to rolling out Best Start Family Hubs in every local authority.”
THE seven-year prison sentence handed to a 15-year-old boy convicted of the manslaughter of 80-year-old Bhim Sen Kohli is to be reviewed under the UK’s Unduly Lenient Sentence (ULS) scheme.
The boy, who cannot be named due to legal restrictions, was found guilty of carrying out an "unprovoked" attack on Kohli as he walked his dog in a park in Leicester, eastern England, in September last year.
The review follows a detailed assessment by Solicitor General Lucy Rigby KC MP to determine whether the case met the threshold for referral.
“The Solicitor General, Lucy Rigby KC MP, was appalled by this violent, cowardly attack on an innocent man. She wishes to express her deepest sympathies to Bhim Kohli’s friends and family at this difficult time,” said a spokesperson for the Attorney General’s Office.
“After a detailed review of the case, the Solicitor General concluded the sentence of the 15-year-old could be referred to the Court of Appeal. The court will now determine whether the sentence should be increased.”
A 13-year-old girl, who was also convicted of manslaughter for her role in the attack, avoided a custodial sentence. She had filmed the assault while laughing and encouraging the boy, the court heard.
At a sentencing hearing on June 5 at Leicester Crown Court, Justice Mark Turner described the attack as “wicked”. He said he was legally bound to consider the defendants’ ages.
The boy, referred to as D1, was convicted of physically assaulting Kohli, while the girl, referred to as D2, received a three-year youth rehabilitation order with a six-month curfew.
Addressing the girl in court, Justice Turner said that a custodial sentence would likely cause “more harm than good”. It is understood that her sentence will not be referred for review as it did not meet the legal threshold.
During the trial, the court was told that Kohli had been racially abused and repeatedly punched and kicked. His daughter, Susan Kohli, found him lying on the ground after the attack.
“They chose to attack a defenceless pensioner and for that I cannot give them any of my sympathy,” she said after the sentencing.
Kelly Matthews, senior district crown prosecutor at the Crown Prosecution Service, called the incident “tragic” and said it had deeply affected the Leicester community and beyond.
“Kohli set out to walk his dog in his local park, as he did every day, but lost his life in what followed,” she said.