Bank of England interest rate cut joy for mortgage holders as Reeves blames mini-Budget for inflation - live

The Bank of England has decided to cut interest rates for the first time in more than four years

Rachel Reeves admits taxes will rise in first Budget

The Bank of England has cut interest rates for the first time since 2020 as inflation continues to remain steady, holding at their two percent target for two consecutive months.

Bank Rate is currently 5.25per cent, a 16-year high where it has been pegged for the last year to fight inflation, but it has now been set at five percent, a drop of 0.25 percentage points.

Governor Andrew Bailey said the move comes after inflation pressures “eased enough that we’ve been able to cut interest rates today”.

The decision will come as joy for homeowners who have been struggling with rising mortgage payments as major banks have confirmed rates could go down as low as three per cent.

Chancellor Rachel Reeves has welcomed the move but warned “millions of families are still facing higher mortgage rates after the mini-budget”.

Key Points

• BoE cuts interest rates in major boost for mortgage holders
• Major banks reduce mortgages after Bank of England interest rate cuts
• Reeves welcomes interest rates cuts but warns families still struggling
• GPs take industrial action over budget dispute
• Braverman: Tories have ‘no chance of winning’ election

[1 August 2024 08:06 · Salma Ouaguira]

Bank could cut UK interest rates but decision a ‘close call’, experts say

The Bank of England could be encouraged to cut interest rates for the first time in more than four years amid growing evidence that inflation has been tamed, experts have said.

Expectations on financial markets show about a 65% chance of the Bank’s policymakers opting to reduce rates on Thursday.

The UK’s base rate has been held at 5.25% since August last year, the highest level since 2008.

Some experts think it could be cut to 5%, which would be the first time UK rates have been reduced since the onset of the Covid-19 pandemic in March 2020.

It comes after new economic data suggested the UK’s cost-of-living crisis has eased in recent months thanks to inflation coming off the boil.

Consumer Prices Index (CPI) inflation hit 2% in May and June, which is the central bank’s target level, indicating that price rises have been brought under control.

Economists stressed that other key indicators of inflationary pressure – mainly services inflation and wage rises – have remained a concern for policymakers.

James Smith, developed market economist for ING, said it will be a “close call” but he expects a majority of policymakers to vote in favour of a 0.25 percentage point rate cut on Thursday.

He said services inflation – which looks only at service-related industries such as hospitality and culture – is the “guiding light for Bank of England policy right now”.

The UK’s base rate has been held at 5.25% since August last year (PA) (PA Archive)

[1 August 2024 07:20 · Salma Ouaguira]

Keir Starmer to meet police chiefs after second night of violence hits Britain

The prime minister will host senior police leaders in Downing Street this afternoon in the wake of violent unrest in multiple parts of the country.

He is expected to remind the police that people “exploit” the right to protest in order to “sow hatred” or commit “violent acts” should be met with “the full force of the law”.

Sir Keir Starmer will also commit to working in partnership with police forces across the UK to stop “mindless violence” following scenes of unrest in Southport, London, Hartlepool and elsewhere.

It comes as more than 100 people were arrested after protesters in Whitehall launched beer cans and glass bottles at police and threw flares at the statue of Winston Churchill in Parliament Square.

Demonstrators wearing England flags and waving banners saying “enough is enough” and “stop the boats” had congregated outside Downing Street in the wake of the killing of three young girls in a knife attack in Southport, which social media posts had wrongly claimed was carried out by a Muslim asylum seeker who crossed the Channel in a small boat.

The angry scenes also included loud chants of: “We want our country back” and: “Oh Tommy Robinson”, referring to the right-wing activist. One man wore a shirt with the slogan: “Nigel Farage for Prime Minister, Tommy Robinson for Home Secretary”.

[31 July 2024 19:30 · Salma Ouaguira]

Labour facing fresh calls to back EU youth mobility scheme as party launches ‘new approach’ on migration

The government has been urged to pursue a youth mobility scheme with the European Union (EU) alongside the “new approach” to legal migration launched by Yvette Cooper.

The home secretary on Tuesday launched a plan to boost the UK workforce’s skills before recruiting abroad in a bid to bring overall numbers down.

In a swipe at the previous Conservative government, Ms Cooper said rising levels of legal migration in recent years reflected a “failure over many years to tackle skills shortages and other problems in the UK labour market”.

Our political correspondent Archie Mitchell has the full story:

[31 July 2024 19:00 · Salma Ouaguira]

Rayner’s ‘revolution’ slashes London house building target

Angela Rayner’s planning “revolution” will see London’s housebuilding target slashed by 20,000 homes, despite a wider push to boost the number of houses being built each year.

The deputy prime minister and housing secretary unveiled a major overhaul of the planning system today, which will see all councils in England given new, mandatory housing targets as part of a plan to deliver 1.5 million more homes in the UK.

She warned that Britain is facing the “most acute housing crisis in living memory”, claiming that the number of new homes is set to drop below 200,000 this year – something Ms Rayner dubbed “unforgivable”.

Our political correspondent Millie Cooke has the full story:

[31 July 2024 18:30 · Salma Ouaguira]

Expert taskforce launched to plan fresh generation of new towns

An expert taskforce is being launched to spearhead Labour’s plans for a fresh generation of new towns.

The towns, which the new government says will create communities of at least 10,000 homes each, are billed as a part of the largest housebuilding programme since the post-war period.

Angela Rayner, the deputy prime minister, has asked two experts to lead the independent New Towns Taskforce.

Its chair, Sir Michael Lyons, has played leading roles in regeneration development company the English Cities Fund, as well as in local government, and has sat on the board of housing developers.

Deputy chair Dame Kate Barker is a housing economist who also chairs a major universities pension scheme and was an external member of the Bank of England’s Monetary Policy Committee between 2001 and 2010.

While some of the new communities set to be built through the programme will be separate from existing towns, others will be urban extensions and regeneration schemes of existing places.

Ms Rayner has insisted the taskforce will “work together with local people to help us decide on the right places for these new towns, delivering more homes, jobs and green spaces”.

The communities will be governed by a “New Towns Code”, a set of rules for developers to ensure the towns are well-connected with infrastructure and public services, are well-designed, sustainable and are nice looking places.

The deputy prime minister’s appointment of Sir Michael and Dame Kate comes a day after she announced an overhaul of the planning system to pave the way for 1.5 million new homes over the next five years to tackle England’s acute housing crisis.

[31 July 2024 18:00 · Salma Ouaguira]

Reeves will have to U-turn on winter fuel savings, warns ex-minister

Chancellor Rachel Reeves has been warned that her plans to means test winter fuel payments will not be possible because of ageing computer systems.

Former pensions minister Guy Opperman, who ran benefits for pensioners between 2017 and 2022 and looked at means testing winter fuel payments, has issued a warning that the system in the Department for Workm and Pensions cannot cope with the changes Ms Reeves has proposed.

The chancellor announced that she would save almost £3 billion by ending winter fuel payments of £200 for over-70s and £800 for over-80s who are not on pension credit.

That means around 10 million out of the 11.5 million pensioners who received the payment will no longer get it and 7 milion of the 8.5 million households which received will no longer be entitled to the payment.

Our political correspondent David Maddox has the full story:

[31 July 2024 17:30 · Salma Ouaguira]

VOICES John Rentoul: Sidelined? No – Angela Rayner’s ambitious housing plan may be the making of her

The new deputy prime minister’s first big outing in the Commons was her chance to prove that she has not been pushed to the political margins by Keir Starmer and Rachel Reeves – and she delivered in spades, says John Rentoul:

[31 July 2024 17:15 · Salma Ouaguira]

VOICES: Reeves’ urinal problem is about much more than a toilet...

Is having a urinal in the chancellor’s bathroom the worst thing in the world? Not really. But it does take the p***, Ryan Coogan writes:

[31 July 2024 17:00 · Salma Ouaguira]

Suella Braverman says Labour scrapping European committee is ‘beginning of the end’ for Brexit

Suella Braverman has dubbed Labour’s decision to scrap the European Scrutiny Committee the “beginning of the end” of Brexit.

Commons leader Lucy Powell on Tuesday announced plans to abolish the select committee, which was established in 1973 to scrutinise the government on EU affairs. This came as part of a wider reform of some of the MP select committees.

Select committees are small groups of MPs or members of the House of Lords that are set up to investigate a specific issue or policy in detail.

The former home secretary hit out at the decision on social media, saying it is “anti-democratic, lacking transparency and a disservice to the millions of British people who voted to deliver Brexit in 2016 and 2019.”

Ms Braverman added: “This is the beginning of the end of Brexit.” Our political correspondent Millie Cooke has the full story:

[31 July 2024 16:40 · Salma Ouaguira]

Renewable energy budget boosted to £1.5bn as record funding allocated

The UK’s renewable energy budget has been increased to a record £1.5 billion, Ed Miliband announced on Wednesday.

Of that, £1.1 billion will be allocated for offshore wind, which the government described as “the backbone of the UK’s clean energy mission”.

Our political correspondent Millie Cooke has the full story: