Bank of England interest rate decision
Newsflash: The Bank of England has raised UK interest rates to 4% as it continues to fight inflation.
The increase from the 3.5 percent widely expected by economists will put more pressure on mortgage payers and businesses struggling to pay their loans.
This is the 10th consecutive meeting in which the Bank’s Monetary Policy Committee has voted to raise UK borrowing costs.
UK rates are now at their highest level since October 2008, when the Bank just started cutting rates in response to the financial crisis.
“,”elementId”:”758b48c6-706c-4a56-a64c-e6121074e14c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
They say:
“,”elementId”:”15248989-2d69-47ab-9581-1cac6dd3e88a”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Seven members judged that a 0.5 percentage point increase in Bank Rate, to 4%, was warranted at this meeting.
\n
Economic activity had weakened, but there had been some signs of greater resilience in the most recent data. Headline CPI inflation had begun to edge back and was likely to fall sharply over the rest of the year, as a result of past developments in energy and other goods prices. However, the labour market had remained tight and domestic price and wage pressures had been stronger than expected, suggesting risks of greater persistence in underlying inflation.
\n
Measures of inflation expectations were still at elevated levels. The risks to the inflation outlook in the medium term were both large and asymmetric, with a skew towards greater persistence. This warranted additional weight being put on recent strength in the labour market and inflation data, and relatively less on the medium-term projections. A 0.5 percentage point increase in Bank Rate at this meeting would address the risk that domestic wage and price pressures remained elevated even as external cost pressures waned.
\n
“,”elementId”:”0ae7e60e-3eb6-4636-b9cc-a6d5cfae40f3″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
But Swati Dhingra and Silvana Tenreyro argued, in vain, against a 10th consecutive increase in UK borrowing costs.
“,”elementId”:”f587a168-7baf-49cb-b09f-a375c5877b76″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
They pointed out that the real economy remained weak, as a result of falling real incomes and the tightening in financial conditions over the past year. They also pointed to forward-looking indicators suggesting that the downturn was affecting the labour market, the minutes say.
“,”elementId”:”6ff8a796-a755-4408-9617-a825641f906c”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675339731000,”blockCreatedOnDisplay”:”12.08 GMT”,”blockLastUpdated”:1675339971000,”blockLastUpdatedDisplay”:”12.12 GMT”,”blockFirstPublished”:1675339955000,”blockFirstPublishedDisplay”:”12.12 GMT”,”blockFirstPublishedDisplayNoTimezone”:”12.12″,”title”:”Why did the Bank raise interest rates today?”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63dba70f8f088fc478bd82cd”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Bank of England believes inflation has probably peaked, in the UK and other advanced economies too.
“,”elementId”:”bcf9a421-924c-414c-a1dd-a1d3d6abb75b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
In a summary of today’s decision, the Bank says:
“,”elementId”:”8c865b72-9c98-4a70-9ec8-ce5a7a358ba9″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Global consumer price inflation remains high, although it is likely to have peaked across many advanced economies, including in the United Kingdom.
\n
Wholesale gas prices have fallen recently and global supply chain disruption appears to have eased amid a slowing in global demand. Many central banks have continued to tighten monetary policy, although market pricing indicates reductions in policy rates further ahead.
\n
“,”elementId”:”f11a4954-ded2-463b-9cd0-21df45ffc880″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675339535000,”blockCreatedOnDisplay”:”12.05 GMT”,”blockLastUpdated”:1675339669000,”blockLastUpdatedDisplay”:”12.07 GMT”,”blockFirstPublished”:1675339670000,”blockFirstPublishedDisplay”:”12.07 GMT”,”blockFirstPublishedDisplayNoTimezone”:”12.07″,”title”:”Bank: inflation likely to have peaked”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63dba65c8f088fc478bd82cc”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Bank of England was split over today’s decision.
“,”elementId”:”d810cd07-5cc8-4987-adf6-edd3d83cd2a2″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Monetary Policy Committee voted by a majority of 7–2 to increase Bank Rate by 0.5 percentage points, to 4%.
“,”elementId”:”6aaf6794-3d91-4fff-8c3e-e12b293f960e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Two members, Swati Dhingra and Silvana Tenreyro, preferred to maintain Bank Rate at 3.5% [they had both voted for no change in December as well].
“,”elementId”:”837788ad-7c50-47a5-a93b-f7c8e7e3b1ea”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675339356000,”blockCreatedOnDisplay”:”12.02 GMT”,”blockLastUpdated”:1675339521000,”blockLastUpdatedDisplay”:”12.05 GMT”,”blockFirstPublished”:1675339521000,”blockFirstPublishedDisplay”:”12.05 GMT”,”blockFirstPublishedDisplayNoTimezone”:”12.05″,”title”:”Policymakers split 7-2 over rate rise”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db9ee98f088fc478bd8271″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Newsflash: the Bank of England has lifted UK interest rates to 4%, the highest level in over 14 years, as it continues to battle inflation.
“,”elementId”:”7e818a8e-bd93-4142-99e6-3257cb970d1e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The increase from 3.5%, which was broadly expected by economists, puts more pressures on mortgage payers and businesses struggling to pay off their loans.
“,”elementId”:”a9ac795c-25ef-48a3-a67e-7de68bbb4b5b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
This is the 10th meeting in a row at which the Bank’s Monetary Policy Committee has voted to raise UK borrowing costs.
“,”elementId”:”8c6d8cf5-2379-4ef7-836a-144cc8ffb070″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
UK rates are now at the highest level since October 2008, when the Bank had only just started cutting rates in response to the financial crisis.
“,”elementId”:”3acd4802-b4f8-495f-aa97-52ae2c4a4be9″}],”attributes”:{“pinned”:true,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675337449000,”blockCreatedOnDisplay”:”11.30 GMT”,”blockLastUpdated”:1675339283000,”blockLastUpdatedDisplay”:”12.01 GMT”,”blockFirstPublished”:1675339283000,”blockFirstPublishedDisplay”:”12.01 GMT”,”blockFirstPublishedDisplayNoTimezone”:”12.01″,”title”:”Bank of England Interest Rate Decision”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db8a018f08ba2ef0b6f7e8″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
UK energy regulator Ofgem has announced it will launch an investigation into British Gas after an investigation found its debt collectors broke into customers’ homes to force-fit pay-as-you-go meters, even when they are known to have extreme vulnerabilities.
“,”elementId”:”ac9c44e4-cfc0-4146-a6aa-162389ee5d16″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
An undercover reporter from The Times worked for Arvato, a company used by British Gas to pursue debts, and found they worked with a locksmith to break into the home of a single father of three young children and switched it to a prepayment meter.
“,”elementId”:”501ccbe2-5576-4185-9329-3d7a33468a01″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
According to job notes seen by The Times, other British Gas customers who have had prepayment meters fitted by force in recent weeks include a woman in her fifties described as “severe mental health bipolar”, a woman who “suffers with mobility problems and is partially sighted” and a mother whose “daughter is disabled and has a hoist and [an] electric wheelchair”.
“,”elementId”:”13bdf1ae-474d-42dc-b0e7-ca82c9dd4821″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
AFS employees are incentivised with bonuses to fit prepayment meters. But if families with these gas meters cannot afford to top up, their heating is cut off.
“,”elementId”:”905412fb-ddae-4b35-8a8b-bba575229a68″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
An Ofgem spokesperson says:
“,”elementId”:”525515e6-3862-451b-9685-471943ad4d2d”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“These are extremely serious allegations from The Times which we will investigate urgently with British Gas and we won’t hesitate to take firm enforcement action.
\n
“It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted and without carrying out thorough checks to ensure it is safe and practicable to do so.
\n
“We recently announced a major market-wide review investigating the rapid growth in prepayment meter installations and potential breaches of licences driving it. We are clear that suppliers must work hard to look after their customers at this time, especially those who are vulnerable, and the energy crisis must not be an excuse for unacceptable behaviour towards any customer – particularly those in vulnerable circumstances.”
\n
“,”elementId”:”95bf2a13-6824-46a9-8ec1-aaff00b3f040″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
British Gas has suspended the use of court warrants to force the installation of prepayment meters, following The Times’ investigation.
“,”elementId”:”d2f43782-df37-4553-95d1-3686785145b2″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Chris O’Shea, the chief executive of the owner of British Gas, Centrica, said the allegations around Arvato were unacceptable.
“,”elementId”:”7ddef3ec-7396-4740-a4c6-863d103a8198″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/feb/01/british-gas-halts-use-of-warrants-to-force-people-on-to-prepayment-meters-allegations-vulnerable-customers-break-in”,”text”:”British Gas halts use of warrants to force people on to prepayment meters”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”39c92620-4247-4664-8be9-b8f45e841473″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675332097000,”blockCreatedOnDisplay”:”10.01 GMT”,”blockLastUpdated”:1675332617000,”blockLastUpdatedDisplay”:”10.10 GMT”,”blockFirstPublished”:1675332617000,”blockFirstPublishedDisplay”:”10.10 GMT”,”blockFirstPublishedDisplayNoTimezone”:”10.10″,”title”:”Ofgem launches urgent investigation into British Gas over prepayment meters”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db74418f08ba2ef0b6f724″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Calls for a tougher windfall tax on energy companies are growing louder today, after Shell smashed its profit record by making almost $40bn last year.
“,”elementId”:”469e1df7-805b-481a-a2fc-465f52d78088″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Labour MP Ed Miliband, shadow secretary of state for Climate Change and Net Zero, says Shell’s earnings are the “windfalls of war”.
“,”elementId”:”b7fb76da-fd9d-4dad-bfe6-db368be428ee”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
He insists the government must close the loophole in the current windfall tax which lets companies offset tax against spending on new investment in the North Sea.
“,”elementId”:”bef03435-030d-46e7-a9d1-a9f7f46076ed”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Miliband told Radio 4’s Today Programme that “people are sick and tired of the way this country is run”.
“,”elementId”:”be55b80e-fd80-4377-8545-fa6163fae143″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Because at one in the same time, you’ve got millions of people who cannot afford heat and power.
\n
You’ve got a government that is saying, there’s nothing we can do. Prices are going to go up by another 40% in April and at the same time, Shell is making record profits, the windfalls of war in unexpected unearned profits, and the government fails to levy a proper windfall tax with massive loopholes for fossil fuel companies.
\n
That is why this country has to change and and and why, in my view, the government has to change.
\n
“,”elementId”:”b2a51712-5cc4-4840-bb10-bd85656fc92f”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Shell reported this morning that it has taken a $1.9bn charge related to windfall taxes in the EU and UK but did not break down how much it had paid for each one [Shell makes most of its profits outside the UK, which would not be subject to the levy].
“,”elementId”:”d5fad4b4-ce04-4b06-abfc-02a2299dff41″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Stuart Lamont, investment manager at RBC Brewin Dolphin, says Shell’s record profits will only intensify calls for more to be done to claw back profits from energy companies in the current environment.
“,”elementId”:”0966930a-89ae-4b07-bf62-e2419909525f”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
The politics of it all aside, the events of the last year have seen Shell’s earnings, cashflow, and debt position improve significantly and shareholders are benefitting through another share buyback programme and an increased dividend.
\n
“,”elementId”:”dbbb7aca-f5c1-458f-bebd-91dffaae77ae”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Global Justice Now are calling for a polluters tax. Dorothy Guerrero, their head of policy, says:
“,”elementId”:”f4c97f05-6429-4e9b-ab28-b97c4069f993″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“It’s sickening to see that in a year where people can’t afford to heat their homes because of rising energy bills, Shell is announcing record annual profits of $39.9bn. As thousands of people went out to the streets yesterday to protest and strike against low pay and the rising cost of living, oil giants like Shell are lining the pockets of shareholders with profits made from a global energy crisis.
\n
These profits are made off the destruction of our planet and there are communities all over the world who are already paying the price for that right now. It’s time to bring in a polluters tax, end this facade and finally make them properly pay up for their climate-wrecking damages.”
\n
“,”elementId”:”8b99ec60-5baa-4b57-9284-2f4bfcd072da”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675326529000,”blockCreatedOnDisplay”:”08.28 GMT”,”blockLastUpdated”:1675328838000,”blockLastUpdatedDisplay”:”09.07 GMT”,”blockFirstPublished”:1675328838000,”blockFirstPublishedDisplay”:”09.07 GMT”,”blockFirstPublishedDisplayNoTimezone”:”09.07″,”title”:”Miliband: Shell record profits are ‘windfalls of war'”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db6b678f08ba2ef0b6f6fd”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Bank of England faced an ‘acute policy dilemma’ this week, as policymakers weigh up whether (as expected) to hike interest rates today – the 10th rise in a row.
“,”elementId”:”cf102a90-1cf0-4c49-a5d7-80f4552f3df5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Our economics editor Larry Elliott explains:
“,”elementId”:”9806e5e0-aa43-485b-996d-fae047193c55″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
On the one hand, the economy is showing signs of weakening. Higher mortgage costs have taken the heat out of the housing market, with the Nationwide building society reporting a fifth monthly fall in property prices. Business failures are rising as tougher financing conditions wipe out “zombie” companies only viable while rates were at ultra-low levels.
\n
The International Monetary Fund said this week the economy would contract by 0.6% this year and the UK would be the only member of the G7 group of leading industrial nations to go backwards. Faced with this scenario in previous years, the Bank would have been cutting interest rates, not raising them.
\n
Yet, after peaking at a 40-year-high of just over 11%, inflation as measured by the consumer prices index has fallen back only slightly and is still above 10%. The Bank’s legally mandated job is to bring inflation back sustainably to its 2% target and the MPC is concerned that if it allows price pressures to become embedded they will be hard to shift.
\n
“,”elementId”:”1e2b1eaf-2bbf-4e9f-903f-8f228d37d4d9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Larry also point out that “anything other than a half-point increase would be a surprise”, at a time when other leading central banks are raising rates, adding:
“,”elementId”:”ed3c1a9b-6343-4d1a-8f51-7cbcf9e1dbd5″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Assuming that is the case, attention in the markets will turn to whether an 11th and even a 12th successive rate rise is in prospect.
\n
“,”elementId”:”1feeffaa-5d39-4d6a-82cd-660927c947d8″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Here’s the full analysis:
“,”elementId”:”b207587b-6c62-43c6-b448-cd6cd7f77069″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/feb/02/weaker-economy-higher-inflation-bank-of-englands-dilemma”,”text”:”Weaker economy, higher inflation: Bank of England’s dilemma”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”0e78ef28-b1e9-46aa-8969-0129e0bab32d”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675324263000,”blockCreatedOnDisplay”:”07.51 GMT”,”blockLastUpdated”:1675324870000,”blockLastUpdatedDisplay”:”08.01 GMT”,”blockFirstPublished”:1675324871000,”blockFirstPublishedDisplay”:”08.01 GMT”,”blockFirstPublishedDisplayNoTimezone”:”08.01″,”title”:”Analysis: Weaker economy, higher inflation: Bank of England’s dilemma”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db68c18f088fc478bd80b4″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The head of the TUC has described Shell’s $40bn of profits last year as “obscene” and “an insult to working families”.
“,”elementId”:”10e57050-b097-4155-9c6c-b00920de334b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
TUC General Secretary Paul Nowak said the government must beef up its windfall tax, so that energy firms pay ‘their fair share’.
“,”elementId”:”93631a83-94e1-45b9-9e4c-2e34c3afc58d”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“As households up and down Britain struggle to pay their bills and make ends meet, Shell are enjoying a cash bonanza.
\n
“The time for excuses is over. The government must impose a larger windfall tax on energy companies. Billions are being left on the table.
\n
“Instead of holding down the pay of paramedics, teachers, firefighters and millions of other hard-pressed public servants, ministers should be making Big Oil and Gas pay their fair share.
\n
“There is nothing stopping Rishi Sunak and Jeremy Hunt from making that political choice.”
\n
“,”elementId”:”c3f9a171-212e-4d13-8a70-aa192d8d9fa5″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675323585000,”blockCreatedOnDisplay”:”07.39 GMT”,”blockLastUpdated”:1675323689000,”blockLastUpdatedDisplay”:”07.41 GMT”,”blockFirstPublished”:1675323689000,”blockFirstPublishedDisplay”:”07.41 GMT”,”blockFirstPublishedDisplayNoTimezone”:”07.41″,”title”:”TUC: Shell profits are “an insult” to working families”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db5c3f8f08422c6ba09a6c”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Trade union Unite is calling for an emergency windfall tax on banks, saying they have enjoyed a profits bonanza from the increase in interest rates last year.
“,”elementId”:”32ca7cff-99a0-4e67-b34d-4c3a51c57adc”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Unite said its research showed that in the first nine months of 2022, leading banks generated £19.8bn of profits.
“,”elementId”:”87a7eef7-e76a-4b05-9c5d-5662e05b5bd3″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Higher interest rates boost bank profitability, by increasing the earnings on their cash balances. Since the end of 2021, big banks’ bank net interest income has increased by 37%, the union reports.
“,”elementId”:”d6eebfef-31ea-485e-9551-ef345e544ee1″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Unite general secretary Sharon Graham said:
“,”elementId”:”5b3d1b68-3644-46e1-ad06-a6f7351903d5″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“It’s time the truth was told. Interest rate rises are putting the fear of death into households across Britain, but we know now that at the same time they are delivering billions in excess profits to the big City banks.
\n
“Our economy is broken. Nothing symbolises that better than the spectacle of politicians demanding pay cuts from nurses whilst doing nothing to get City noses out of the ‘banking-billions’ trough.
\n
“That’s why I am calling for a windfall tax on the excess profits of the big banks. Workers did not create this crisis and they should not be the ones to pay for it.
\n
“It’s time the profiteers and their friends in the city were told profiteering won’t pay and it’s time they paid their fair share.”
\n
“,”elementId”:”5776d28e-1477-47a2-8c9a-7dc62f44c4b4″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675322302000,”blockCreatedOnDisplay”:”07.18 GMT”,”blockLastUpdated”:1675323527000,”blockLastUpdatedDisplay”:”07.38 GMT”,”blockFirstPublished”:1675323527000,”blockFirstPublishedDisplay”:”07.38 GMT”,”blockFirstPublishedDisplayNoTimezone”:”07.38″,”title”:”Unite union calls for emergency windfall tax on banks”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db64c58f08ba2ef0b6f6cb”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Oil giant Shell has reported record earnings of almost $40bn for 2022 this morning.
“,”elementId”:”3f60acb8-44c4-4f9d-a698-90411b12b2d9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The surge in profits caps a tumultuous year – and one that was extremely profitable for oil majors, as Russia’s invasion of Ukraine drove up wholesale energy prices.
“,”elementId”:”f434c4b6-1bba-457e-9129-4d1678c2127b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
My colleague Alex Lawson has the details:
“,”elementId”:”e0d3e0fa-fb06-4995-a03f-222830ebae85″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Shell’s annual profits have more than doubled to a record of nearly $40bn (£32.3bn) after a surge in wholesale gas prices linked to the war in Ukraine boosted its performance, as consumers struggled to pay huge energy bills.
\n
The oil and gas company posted profits of $9.81bn in the final quarter of last year, compared with $6.4bn a year earlier. That took annual adjusted profits to $39.87bn, outstripping the $19.3bn notched up in 2021.
\n
Analysts had expected Shell’s chief executive, Wael Sawan, to report adjusted earnings of $7.97bn for the fourth quarter and $38.17bn for the year, in his City debut. It represented an increase on the $9.45bn registered in the third quarter.
\n
“,”elementId”:”ae72bca7-7db2-4fe5-b1b5-1a8b1cb34673″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Shell shareholders will continue to benefit from the earnings surge: the company has announced a new share buyback scheme, with $4bn to shareholders over the next three months.
“,”elementId”:”36c1ca5d-c08a-42c1-bd48-ac989171b9eb”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Here’s the full story:
“,”elementId”:”7750504c-94b1-41b1-a8d6-e4266cf4acf4″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/feb/02/shell-profits-2022-surging-oil-prices-gas-ukraine”,”text”:”Shell makes record $40bn in profits on back of surging gas prices”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”21b5a782-86a1-422b-82ab-84df5c1fb884″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675322565000,”blockCreatedOnDisplay”:”07.22 GMT”,”blockLastUpdated”:1675323539000,”blockLastUpdatedDisplay”:”07.38 GMT”,”blockFirstPublished”:1675323522000,”blockFirstPublishedDisplay”:”07.38 GMT”,”blockFirstPublishedDisplayNoTimezone”:”07.38″,”title”:”Shell makes record $40bn in profits on back of surging gas prices”,”contributors”:[{“name”:”Alex Lawson”,”imageUrl”:”https://i.guim.co.uk/img/uploads/2022/07/04/Alex_Lawson.jpg?width=300&quality=85&auto=format&fit=max&s=0a2753e67ed22ba4b5c32755d249728e”,”largeImageUrl”:”https://i.guim.co.uk/img/uploads/2022/07/04/Alex_Lawson.png?width=300&quality=85&auto=format&fit=max&s=3398bbd57b8c8e39c78278bf7116ae5e”}],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db59d78f088fc478bd803f”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
“,”elementId”:”de977724-e321-4129-a7a6-a612a0be0b48″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Despite the risk of a looming recession, the Bank of England is expected to raise UK interest rates for the 10th time in a row today as it continues to battle inflation.
“,”elementId”:”6ce81c87-5cd4-4b48-bbc1-70ee114f108e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Economists predict the BoE will lift Bank Rate by another half a percent, up to 4%, the highest since autumn 2008 – as this chart from December shows:
“,”elementId”:”de946a7a-c5ea-4a15-a4af-9a3b1cfda9d6″},{“_type”:”model.dotcomrendering.pageElements.InteractiveBlockElement”,”url”:”https://interactive.guim.co.uk/uploader/embed/2023/02/boe-zip/giv-13425yaUXlLAeeVlT/”,”alt”:”A chart showing UK interest rate rises”,”scriptUrl”:”https://interactive.guim.co.uk/embed/iframe-wrapper/0.1/boot.js”,”isMandatory”:false,”elementId”:”b6ed229d-cd71-4b9c-92bb-c243e463de5a”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
UK consumer price inflation eased slightly to 10.5% in December, having hit 11.1% in October, offering hopes that price pressures may have peaked.
“,”elementId”:”2c313561-732c-4256-8ac4-3488b834dd49″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
But last month, the Bank of England’s chief economist warned that high rates of UK inflation could persist for longer than expected.
“,”elementId”:”db27c14e-90fc-49e6-b8b4-8e44b003dc6c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Huw Pill said:
“,”elementId”:”995722d7-dbd7-4c7d-8745-58e2db0dc0b9″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“The distinctive context that prevails in the UK – of higher natural gas prices with a tight labour market, adverse labour supply developments and goods market bottlenecks – creates the potential for inflation to prove more persistent.”
\n
“,”elementId”:”9385b9ee-f47e-43eb-986e-cbda5e8d2db5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Those concerns could spur policymakers on the Monetary Policy Committee to keep tightening policy. All nine MPC members get a vote, and their decision is released at noon.
“,”elementId”:”3a665ba9-a7c8-4ab7-8bf3-60e2bd6b6078″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/jan/09/bank-of-england-high-inflation-could-last-longer-than-expected-chief-economic-energy-prices-uk-recession”,”text”:”Bank of England warns high inflation could last longer than expected”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”242ea776-4894-4fc8-be46-37438010c44f”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Another interest rate rise would push up borrowing costs for the approximately 2.2 million people on a variable rate mortgage. More than a million households must renew their fixed-rate deals this year, and already face a jump in repayments.
“,”elementId”:”42a04b0d-864c-4de7-ac9e-d8d35896a438″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explains:
“,”elementId”:”b5de0135-230e-4fa5-9a1f-8130d8c7af30″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
In one hand, the double-digit inflation continues taking a toll on the UK economy and on people’s lives. According to the latest data, food inflation in Britain hit the eye-watering level of 16.7% in the 4 weeks to January 22.
\n
On the other hand, the rising rates take a toll on the British housing market.
\n
“,”elementId”:”26e3e786-57bb-44b6-ac46-9cc63784d792″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Yesterday, Nationwide reported that house prices in the UK fell again in January, sliding for the fifth month in a row.
“,”elementId”:”2e907cf4-e543-442c-8a0d-6a7b85f387fe”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/money/2023/feb/01/uk-house-prices-fall-for-fifth-month-in-a-row”,”text”:”UK house prices fall for fifth month in a row”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”df3f8334-ddbc-4d71-affb-ccbb72a6cac9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Bank will also give its latest assessment of the UK economy. Three months ago, it warned the UK faced a lengthy recession, but it could upgrade its outlook today, as the market chaos following last September’s mini-budget has eased.
“,”elementId”:”1e9ffaa8-0f6f-40c9-b4bb-4976c7bc6873″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The BoE isn’t the only central bank battling inflation, of course. The European Central Bank sets its interest rates today too, and is also expected to raise borrowing costs by 50 basis points, or half a percent.
“,”elementId”:”6adacb53-8b4e-47f7-ba62-b5c991fc3142″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Last night, America’s Federal Reserve lifted its key rate by a mere quarter-point (25 basis points), and signalled a slowdown in its tightening programme.
“,”elementId”:”89e0bf6c-8e11-4b18-8d87-c776d1972a47″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Fed chair Jerome Powell said:
“,”elementId”:”62c260e2-49cf-461a-8039-16b99d7fb058″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“We covered a lot of ground, and the full effects of our rapid tightening so far are yet to be felt. Even so, we have more work to do.”
\n
“,”elementId”:”8d1bfad8-014f-4e84-a63b-8c38dbd24d6a”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
But, Powell also tried to dampen expectations that the Fed could unwind some of its hefty interest rate increases, cautioning:
“,”elementId”:”2f2c7e41-184d-4dba-ade7-858a1a01968f”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“If the economy performs broadly in line with those expectations, it will not be appropriate to cut rates this year.
\n
“,”elementId”:”a7646a29-61c2-4e4a-b573-1b7bba8f6f4f”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/feb/01/fed-small-interest-hike-inflation-eases”,”text”:”Fed announces smallest interest hike in a year as inflation ‘eases somewhat’”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”3d3cfae5-6b73-4e14-9ae7-389c84d4b053″},{“_type”:”model.dotcomrendering.pageElements.SubheadingBlockElement”,”html”:”
The agenda
“,”elementId”:”e32d6e54-8754-4a02-bdf5-2cbe8834e4e4″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
- \n
-
7am GMT: Germany’s trade balance for December
-
Noon GMT: Bank of England releases interest rate decision, and publishes Monetary Policy Report
-
12.30pm GMT: Bank of England press conference
-
1.15pm GMT: European Central Bank interest rate decision
-
1.30pm GMT: US jobless claims data
-
1.45pm GMT: European Central Bank press conference
\n
\n
\n
\n
\n
\n
“,”elementId”:”e625defb-ea7c-43fc-9c65-8b32ec858994″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675322302000,”blockCreatedOnDisplay”:”07.18 GMT”,”blockLastUpdated”:1675337544000,”blockLastUpdatedDisplay”:”11.32 GMT”,”blockFirstPublished”:1675322302000,”blockFirstPublishedDisplay”:”07.18 GMT”,”blockFirstPublishedDisplayNoTimezone”:”07.18″,”title”:”Bank of England expected to raise interest rates to 14-year high”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”}],”filterKeyEvents”:false,”format”:{“display”:0,”theme”:0,”design”:10},”id”:”key-events-carousel-mobile”}”>
Key events
“,”elementId”:”758b48c6-706c-4a56-a64c-e6121074e14c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
They say:
“,”elementId”:”15248989-2d69-47ab-9581-1cac6dd3e88a”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Seven members judged that a 0.5 percentage point increase in Bank Rate, to 4%, was warranted at this meeting.
\n
Economic activity had weakened, but there had been some signs of greater resilience in the most recent data. Headline CPI inflation had begun to edge back and was likely to fall sharply over the rest of the year, as a result of past developments in energy and other goods prices. However, the labour market had remained tight and domestic price and wage pressures had been stronger than expected, suggesting risks of greater persistence in underlying inflation.
\n
Measures of inflation expectations were still at elevated levels. The risks to the inflation outlook in the medium term were both large and asymmetric, with a skew towards greater persistence. This warranted additional weight being put on recent strength in the labour market and inflation data, and relatively less on the medium-term projections. A 0.5 percentage point increase in Bank Rate at this meeting would address the risk that domestic wage and price pressures remained elevated even as external cost pressures waned.
\n
“,”elementId”:”0ae7e60e-3eb6-4636-b9cc-a6d5cfae40f3″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
But Swati Dhingra and Silvana Tenreyro argued, in vain, against a 10th consecutive increase in UK borrowing costs.
“,”elementId”:”f587a168-7baf-49cb-b09f-a375c5877b76″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
They pointed out that the real economy remained weak, as a result of falling real incomes and the tightening in financial conditions over the past year. They also pointed to forward-looking indicators suggesting that the downturn was affecting the labour market, the minutes say.
“,”elementId”:”6ff8a796-a755-4408-9617-a825641f906c”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675339731000,”blockCreatedOnDisplay”:”12.08 GMT”,”blockLastUpdated”:1675339971000,”blockLastUpdatedDisplay”:”12.12 GMT”,”blockFirstPublished”:1675339955000,”blockFirstPublishedDisplay”:”12.12 GMT”,”blockFirstPublishedDisplayNoTimezone”:”12.12″,”title”:”Why did the Bank raise interest rates today?”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63dba70f8f088fc478bd82cd”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Bank of England believes inflation has probably peaked, in the UK and other advanced economies too.
“,”elementId”:”bcf9a421-924c-414c-a1dd-a1d3d6abb75b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
In a summary of today’s decision, the Bank says:
“,”elementId”:”8c865b72-9c98-4a70-9ec8-ce5a7a358ba9″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Global consumer price inflation remains high, although it is likely to have peaked across many advanced economies, including in the United Kingdom.
\n
Wholesale gas prices have fallen recently and global supply chain disruption appears to have eased amid a slowing in global demand. Many central banks have continued to tighten monetary policy, although market pricing indicates reductions in policy rates further ahead.
\n
“,”elementId”:”f11a4954-ded2-463b-9cd0-21df45ffc880″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675339535000,”blockCreatedOnDisplay”:”12.05 GMT”,”blockLastUpdated”:1675339669000,”blockLastUpdatedDisplay”:”12.07 GMT”,”blockFirstPublished”:1675339670000,”blockFirstPublishedDisplay”:”12.07 GMT”,”blockFirstPublishedDisplayNoTimezone”:”12.07″,”title”:”Bank: inflation likely to have peaked”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63dba65c8f088fc478bd82cc”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Bank of England was split over today’s decision.
“,”elementId”:”d810cd07-5cc8-4987-adf6-edd3d83cd2a2″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Monetary Policy Committee voted by a majority of 7–2 to increase Bank Rate by 0.5 percentage points, to 4%.
“,”elementId”:”6aaf6794-3d91-4fff-8c3e-e12b293f960e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Two members, Swati Dhingra and Silvana Tenreyro, preferred to maintain Bank Rate at 3.5% [they had both voted for no change in December as well].
“,”elementId”:”837788ad-7c50-47a5-a93b-f7c8e7e3b1ea”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675339356000,”blockCreatedOnDisplay”:”12.02 GMT”,”blockLastUpdated”:1675339521000,”blockLastUpdatedDisplay”:”12.05 GMT”,”blockFirstPublished”:1675339521000,”blockFirstPublishedDisplay”:”12.05 GMT”,”blockFirstPublishedDisplayNoTimezone”:”12.05″,”title”:”Policymakers split 7-2 over rate rise”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db9ee98f088fc478bd8271″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Newsflash: the Bank of England has lifted UK interest rates to 4%, the highest level in over 14 years, as it continues to battle inflation.
“,”elementId”:”7e818a8e-bd93-4142-99e6-3257cb970d1e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The increase from 3.5%, which was broadly expected by economists, puts more pressures on mortgage payers and businesses struggling to pay off their loans.
“,”elementId”:”a9ac795c-25ef-48a3-a67e-7de68bbb4b5b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
This is the 10th meeting in a row at which the Bank’s Monetary Policy Committee has voted to raise UK borrowing costs.
“,”elementId”:”8c6d8cf5-2379-4ef7-836a-144cc8ffb070″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
UK rates are now at the highest level since October 2008, when the Bank had only just started cutting rates in response to the financial crisis.
“,”elementId”:”3acd4802-b4f8-495f-aa97-52ae2c4a4be9″}],”attributes”:{“pinned”:true,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675337449000,”blockCreatedOnDisplay”:”11.30 GMT”,”blockLastUpdated”:1675339283000,”blockLastUpdatedDisplay”:”12.01 GMT”,”blockFirstPublished”:1675339283000,”blockFirstPublishedDisplay”:”12.01 GMT”,”blockFirstPublishedDisplayNoTimezone”:”12.01″,”title”:”Bank of England Interest Rate Decision”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db8a018f08ba2ef0b6f7e8″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
UK energy regulator Ofgem has announced it will launch an investigation into British Gas after an investigation found its debt collectors broke into customers’ homes to force-fit pay-as-you-go meters, even when they are known to have extreme vulnerabilities.
“,”elementId”:”ac9c44e4-cfc0-4146-a6aa-162389ee5d16″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
An undercover reporter from The Times worked for Arvato, a company used by British Gas to pursue debts, and found they worked with a locksmith to break into the home of a single father of three young children and switched it to a prepayment meter.
“,”elementId”:”501ccbe2-5576-4185-9329-3d7a33468a01″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
According to job notes seen by The Times, other British Gas customers who have had prepayment meters fitted by force in recent weeks include a woman in her fifties described as “severe mental health bipolar”, a woman who “suffers with mobility problems and is partially sighted” and a mother whose “daughter is disabled and has a hoist and [an] electric wheelchair”.
“,”elementId”:”13bdf1ae-474d-42dc-b0e7-ca82c9dd4821″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
AFS employees are incentivised with bonuses to fit prepayment meters. But if families with these gas meters cannot afford to top up, their heating is cut off.
“,”elementId”:”905412fb-ddae-4b35-8a8b-bba575229a68″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
An Ofgem spokesperson says:
“,”elementId”:”525515e6-3862-451b-9685-471943ad4d2d”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“These are extremely serious allegations from The Times which we will investigate urgently with British Gas and we won’t hesitate to take firm enforcement action.
\n
“It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted and without carrying out thorough checks to ensure it is safe and practicable to do so.
\n
“We recently announced a major market-wide review investigating the rapid growth in prepayment meter installations and potential breaches of licences driving it. We are clear that suppliers must work hard to look after their customers at this time, especially those who are vulnerable, and the energy crisis must not be an excuse for unacceptable behaviour towards any customer – particularly those in vulnerable circumstances.”
\n
“,”elementId”:”95bf2a13-6824-46a9-8ec1-aaff00b3f040″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
British Gas has suspended the use of court warrants to force the installation of prepayment meters, following The Times’ investigation.
“,”elementId”:”d2f43782-df37-4553-95d1-3686785145b2″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Chris O’Shea, the chief executive of the owner of British Gas, Centrica, said the allegations around Arvato were unacceptable.
“,”elementId”:”7ddef3ec-7396-4740-a4c6-863d103a8198″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/feb/01/british-gas-halts-use-of-warrants-to-force-people-on-to-prepayment-meters-allegations-vulnerable-customers-break-in”,”text”:”British Gas halts use of warrants to force people on to prepayment meters”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”39c92620-4247-4664-8be9-b8f45e841473″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675332097000,”blockCreatedOnDisplay”:”10.01 GMT”,”blockLastUpdated”:1675332617000,”blockLastUpdatedDisplay”:”10.10 GMT”,”blockFirstPublished”:1675332617000,”blockFirstPublishedDisplay”:”10.10 GMT”,”blockFirstPublishedDisplayNoTimezone”:”10.10″,”title”:”Ofgem launches urgent investigation into British Gas over prepayment meters”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db74418f08ba2ef0b6f724″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Calls for a tougher windfall tax on energy companies are growing louder today, after Shell smashed its profit record by making almost $40bn last year.
“,”elementId”:”469e1df7-805b-481a-a2fc-465f52d78088″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Labour MP Ed Miliband, shadow secretary of state for Climate Change and Net Zero, says Shell’s earnings are the “windfalls of war”.
“,”elementId”:”b7fb76da-fd9d-4dad-bfe6-db368be428ee”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
He insists the government must close the loophole in the current windfall tax which lets companies offset tax against spending on new investment in the North Sea.
“,”elementId”:”bef03435-030d-46e7-a9d1-a9f7f46076ed”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Miliband told Radio 4’s Today Programme that “people are sick and tired of the way this country is run”.
“,”elementId”:”be55b80e-fd80-4377-8545-fa6163fae143″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Because at one in the same time, you’ve got millions of people who cannot afford heat and power.
\n
You’ve got a government that is saying, there’s nothing we can do. Prices are going to go up by another 40% in April and at the same time, Shell is making record profits, the windfalls of war in unexpected unearned profits, and the government fails to levy a proper windfall tax with massive loopholes for fossil fuel companies.
\n
That is why this country has to change and and and why, in my view, the government has to change.
\n
“,”elementId”:”b2a51712-5cc4-4840-bb10-bd85656fc92f”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Shell reported this morning that it has taken a $1.9bn charge related to windfall taxes in the EU and UK but did not break down how much it had paid for each one [Shell makes most of its profits outside the UK, which would not be subject to the levy].
“,”elementId”:”d5fad4b4-ce04-4b06-abfc-02a2299dff41″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Stuart Lamont, investment manager at RBC Brewin Dolphin, says Shell’s record profits will only intensify calls for more to be done to claw back profits from energy companies in the current environment.
“,”elementId”:”0966930a-89ae-4b07-bf62-e2419909525f”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
The politics of it all aside, the events of the last year have seen Shell’s earnings, cashflow, and debt position improve significantly and shareholders are benefitting through another share buyback programme and an increased dividend.
\n
“,”elementId”:”dbbb7aca-f5c1-458f-bebd-91dffaae77ae”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Global Justice Now are calling for a polluters tax. Dorothy Guerrero, their head of policy, says:
“,”elementId”:”f4c97f05-6429-4e9b-ab28-b97c4069f993″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“It’s sickening to see that in a year where people can’t afford to heat their homes because of rising energy bills, Shell is announcing record annual profits of $39.9bn. As thousands of people went out to the streets yesterday to protest and strike against low pay and the rising cost of living, oil giants like Shell are lining the pockets of shareholders with profits made from a global energy crisis.
\n
These profits are made off the destruction of our planet and there are communities all over the world who are already paying the price for that right now. It’s time to bring in a polluters tax, end this facade and finally make them properly pay up for their climate-wrecking damages.”
\n
“,”elementId”:”8b99ec60-5baa-4b57-9284-2f4bfcd072da”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675326529000,”blockCreatedOnDisplay”:”08.28 GMT”,”blockLastUpdated”:1675328838000,”blockLastUpdatedDisplay”:”09.07 GMT”,”blockFirstPublished”:1675328838000,”blockFirstPublishedDisplay”:”09.07 GMT”,”blockFirstPublishedDisplayNoTimezone”:”09.07″,”title”:”Miliband: Shell record profits are ‘windfalls of war'”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db6b678f08ba2ef0b6f6fd”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Bank of England faced an ‘acute policy dilemma’ this week, as policymakers weigh up whether (as expected) to hike interest rates today – the 10th rise in a row.
“,”elementId”:”cf102a90-1cf0-4c49-a5d7-80f4552f3df5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Our economics editor Larry Elliott explains:
“,”elementId”:”9806e5e0-aa43-485b-996d-fae047193c55″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
On the one hand, the economy is showing signs of weakening. Higher mortgage costs have taken the heat out of the housing market, with the Nationwide building society reporting a fifth monthly fall in property prices. Business failures are rising as tougher financing conditions wipe out “zombie” companies only viable while rates were at ultra-low levels.
\n
The International Monetary Fund said this week the economy would contract by 0.6% this year and the UK would be the only member of the G7 group of leading industrial nations to go backwards. Faced with this scenario in previous years, the Bank would have been cutting interest rates, not raising them.
\n
Yet, after peaking at a 40-year-high of just over 11%, inflation as measured by the consumer prices index has fallen back only slightly and is still above 10%. The Bank’s legally mandated job is to bring inflation back sustainably to its 2% target and the MPC is concerned that if it allows price pressures to become embedded they will be hard to shift.
\n
“,”elementId”:”1e2b1eaf-2bbf-4e9f-903f-8f228d37d4d9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Larry also point out that “anything other than a half-point increase would be a surprise”, at a time when other leading central banks are raising rates, adding:
“,”elementId”:”ed3c1a9b-6343-4d1a-8f51-7cbcf9e1dbd5″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Assuming that is the case, attention in the markets will turn to whether an 11th and even a 12th successive rate rise is in prospect.
\n
“,”elementId”:”1feeffaa-5d39-4d6a-82cd-660927c947d8″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Here’s the full analysis:
“,”elementId”:”b207587b-6c62-43c6-b448-cd6cd7f77069″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/feb/02/weaker-economy-higher-inflation-bank-of-englands-dilemma”,”text”:”Weaker economy, higher inflation: Bank of England’s dilemma”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”0e78ef28-b1e9-46aa-8969-0129e0bab32d”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675324263000,”blockCreatedOnDisplay”:”07.51 GMT”,”blockLastUpdated”:1675324870000,”blockLastUpdatedDisplay”:”08.01 GMT”,”blockFirstPublished”:1675324871000,”blockFirstPublishedDisplay”:”08.01 GMT”,”blockFirstPublishedDisplayNoTimezone”:”08.01″,”title”:”Analysis: Weaker economy, higher inflation: Bank of England’s dilemma”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db68c18f088fc478bd80b4″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The head of the TUC has described Shell’s $40bn of profits last year as “obscene” and “an insult to working families”.
“,”elementId”:”10e57050-b097-4155-9c6c-b00920de334b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
TUC General Secretary Paul Nowak said the government must beef up its windfall tax, so that energy firms pay ‘their fair share’.
“,”elementId”:”93631a83-94e1-45b9-9e4c-2e34c3afc58d”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“As households up and down Britain struggle to pay their bills and make ends meet, Shell are enjoying a cash bonanza.
\n
“The time for excuses is over. The government must impose a larger windfall tax on energy companies. Billions are being left on the table.
\n
“Instead of holding down the pay of paramedics, teachers, firefighters and millions of other hard-pressed public servants, ministers should be making Big Oil and Gas pay their fair share.
\n
“There is nothing stopping Rishi Sunak and Jeremy Hunt from making that political choice.”
\n
“,”elementId”:”c3f9a171-212e-4d13-8a70-aa192d8d9fa5″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675323585000,”blockCreatedOnDisplay”:”07.39 GMT”,”blockLastUpdated”:1675323689000,”blockLastUpdatedDisplay”:”07.41 GMT”,”blockFirstPublished”:1675323689000,”blockFirstPublishedDisplay”:”07.41 GMT”,”blockFirstPublishedDisplayNoTimezone”:”07.41″,”title”:”TUC: Shell profits are “an insult” to working families”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db5c3f8f08422c6ba09a6c”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Trade union Unite is calling for an emergency windfall tax on banks, saying they have enjoyed a profits bonanza from the increase in interest rates last year.
“,”elementId”:”32ca7cff-99a0-4e67-b34d-4c3a51c57adc”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Unite said its research showed that in the first nine months of 2022, leading banks generated £19.8bn of profits.
“,”elementId”:”87a7eef7-e76a-4b05-9c5d-5662e05b5bd3″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Higher interest rates boost bank profitability, by increasing the earnings on their cash balances. Since the end of 2021, big banks’ bank net interest income has increased by 37%, the union reports.
“,”elementId”:”d6eebfef-31ea-485e-9551-ef345e544ee1″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Unite general secretary Sharon Graham said:
“,”elementId”:”5b3d1b68-3644-46e1-ad06-a6f7351903d5″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“It’s time the truth was told. Interest rate rises are putting the fear of death into households across Britain, but we know now that at the same time they are delivering billions in excess profits to the big City banks.
\n
“Our economy is broken. Nothing symbolises that better than the spectacle of politicians demanding pay cuts from nurses whilst doing nothing to get City noses out of the ‘banking-billions’ trough.
\n
“That’s why I am calling for a windfall tax on the excess profits of the big banks. Workers did not create this crisis and they should not be the ones to pay for it.
\n
“It’s time the profiteers and their friends in the city were told profiteering won’t pay and it’s time they paid their fair share.”
\n
“,”elementId”:”5776d28e-1477-47a2-8c9a-7dc62f44c4b4″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675322302000,”blockCreatedOnDisplay”:”07.18 GMT”,”blockLastUpdated”:1675323527000,”blockLastUpdatedDisplay”:”07.38 GMT”,”blockFirstPublished”:1675323527000,”blockFirstPublishedDisplay”:”07.38 GMT”,”blockFirstPublishedDisplayNoTimezone”:”07.38″,”title”:”Unite union calls for emergency windfall tax on banks”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db64c58f08ba2ef0b6f6cb”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Oil giant Shell has reported record earnings of almost $40bn for 2022 this morning.
“,”elementId”:”3f60acb8-44c4-4f9d-a698-90411b12b2d9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The surge in profits caps a tumultuous year – and one that was extremely profitable for oil majors, as Russia’s invasion of Ukraine drove up wholesale energy prices.
“,”elementId”:”f434c4b6-1bba-457e-9129-4d1678c2127b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
My colleague Alex Lawson has the details:
“,”elementId”:”e0d3e0fa-fb06-4995-a03f-222830ebae85″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
Shell’s annual profits have more than doubled to a record of nearly $40bn (£32.3bn) after a surge in wholesale gas prices linked to the war in Ukraine boosted its performance, as consumers struggled to pay huge energy bills.
\n
The oil and gas company posted profits of $9.81bn in the final quarter of last year, compared with $6.4bn a year earlier. That took annual adjusted profits to $39.87bn, outstripping the $19.3bn notched up in 2021.
\n
Analysts had expected Shell’s chief executive, Wael Sawan, to report adjusted earnings of $7.97bn for the fourth quarter and $38.17bn for the year, in his City debut. It represented an increase on the $9.45bn registered in the third quarter.
\n
“,”elementId”:”ae72bca7-7db2-4fe5-b1b5-1a8b1cb34673″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Shell shareholders will continue to benefit from the earnings surge: the company has announced a new share buyback scheme, with $4bn to shareholders over the next three months.
“,”elementId”:”36c1ca5d-c08a-42c1-bd48-ac989171b9eb”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Here’s the full story:
“,”elementId”:”7750504c-94b1-41b1-a8d6-e4266cf4acf4″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/feb/02/shell-profits-2022-surging-oil-prices-gas-ukraine”,”text”:”Shell makes record $40bn in profits on back of surging gas prices”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”21b5a782-86a1-422b-82ab-84df5c1fb884″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675322565000,”blockCreatedOnDisplay”:”07.22 GMT”,”blockLastUpdated”:1675323539000,”blockLastUpdatedDisplay”:”07.38 GMT”,”blockFirstPublished”:1675323522000,”blockFirstPublishedDisplay”:”07.38 GMT”,”blockFirstPublishedDisplayNoTimezone”:”07.38″,”title”:”Shell makes record $40bn in profits on back of surging gas prices”,”contributors”:[{“name”:”Alex Lawson”,”imageUrl”:”https://i.guim.co.uk/img/uploads/2022/07/04/Alex_Lawson.jpg?width=300&quality=85&auto=format&fit=max&s=0a2753e67ed22ba4b5c32755d249728e”,”largeImageUrl”:”https://i.guim.co.uk/img/uploads/2022/07/04/Alex_Lawson.png?width=300&quality=85&auto=format&fit=max&s=3398bbd57b8c8e39c78278bf7116ae5e”}],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”},{“id”:”63db59d78f088fc478bd803f”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
“,”elementId”:”de977724-e321-4129-a7a6-a612a0be0b48″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Despite the risk of a looming recession, the Bank of England is expected to raise UK interest rates for the 10th time in a row today as it continues to battle inflation.
“,”elementId”:”6ce81c87-5cd4-4b48-bbc1-70ee114f108e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Economists predict the BoE will lift Bank Rate by another half a percent, up to 4%, the highest since autumn 2008 – as this chart from December shows:
“,”elementId”:”de946a7a-c5ea-4a15-a4af-9a3b1cfda9d6″},{“_type”:”model.dotcomrendering.pageElements.InteractiveBlockElement”,”url”:”https://interactive.guim.co.uk/uploader/embed/2023/02/boe-zip/giv-13425yaUXlLAeeVlT/”,”alt”:”A chart showing UK interest rate rises”,”scriptUrl”:”https://interactive.guim.co.uk/embed/iframe-wrapper/0.1/boot.js”,”isMandatory”:false,”elementId”:”b6ed229d-cd71-4b9c-92bb-c243e463de5a”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
UK consumer price inflation eased slightly to 10.5% in December, having hit 11.1% in October, offering hopes that price pressures may have peaked.
“,”elementId”:”2c313561-732c-4256-8ac4-3488b834dd49″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
But last month, the Bank of England’s chief economist warned that high rates of UK inflation could persist for longer than expected.
“,”elementId”:”db27c14e-90fc-49e6-b8b4-8e44b003dc6c”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Huw Pill said:
“,”elementId”:”995722d7-dbd7-4c7d-8745-58e2db0dc0b9″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“The distinctive context that prevails in the UK – of higher natural gas prices with a tight labour market, adverse labour supply developments and goods market bottlenecks – creates the potential for inflation to prove more persistent.”
\n
“,”elementId”:”9385b9ee-f47e-43eb-986e-cbda5e8d2db5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Those concerns could spur policymakers on the Monetary Policy Committee to keep tightening policy. All nine MPC members get a vote, and their decision is released at noon.
“,”elementId”:”3a665ba9-a7c8-4ab7-8bf3-60e2bd6b6078″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/jan/09/bank-of-england-high-inflation-could-last-longer-than-expected-chief-economic-energy-prices-uk-recession”,”text”:”Bank of England warns high inflation could last longer than expected”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”242ea776-4894-4fc8-be46-37438010c44f”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Another interest rate rise would push up borrowing costs for the approximately 2.2 million people on a variable rate mortgage. More than a million households must renew their fixed-rate deals this year, and already face a jump in repayments.
“,”elementId”:”42a04b0d-864c-4de7-ac9e-d8d35896a438″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explains:
“,”elementId”:”b5de0135-230e-4fa5-9a1f-8130d8c7af30″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
In one hand, the double-digit inflation continues taking a toll on the UK economy and on people’s lives. According to the latest data, food inflation in Britain hit the eye-watering level of 16.7% in the 4 weeks to January 22.
\n
On the other hand, the rising rates take a toll on the British housing market.
\n
“,”elementId”:”26e3e786-57bb-44b6-ac46-9cc63784d792″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Yesterday, Nationwide reported that house prices in the UK fell again in January, sliding for the fifth month in a row.
“,”elementId”:”2e907cf4-e543-442c-8a0d-6a7b85f387fe”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/money/2023/feb/01/uk-house-prices-fall-for-fifth-month-in-a-row”,”text”:”UK house prices fall for fifth month in a row”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”df3f8334-ddbc-4d71-affb-ccbb72a6cac9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Bank will also give its latest assessment of the UK economy. Three months ago, it warned the UK faced a lengthy recession, but it could upgrade its outlook today, as the market chaos following last September’s mini-budget has eased.
“,”elementId”:”1e9ffaa8-0f6f-40c9-b4bb-4976c7bc6873″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The BoE isn’t the only central bank battling inflation, of course. The European Central Bank sets its interest rates today too, and is also expected to raise borrowing costs by 50 basis points, or half a percent.
“,”elementId”:”6adacb53-8b4e-47f7-ba62-b5c991fc3142″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Last night, America’s Federal Reserve lifted its key rate by a mere quarter-point (25 basis points), and signalled a slowdown in its tightening programme.
“,”elementId”:”89e0bf6c-8e11-4b18-8d87-c776d1972a47″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Fed chair Jerome Powell said:
“,”elementId”:”62c260e2-49cf-461a-8039-16b99d7fb058″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“We covered a lot of ground, and the full effects of our rapid tightening so far are yet to be felt. Even so, we have more work to do.”
\n
“,”elementId”:”8d1bfad8-014f-4e84-a63b-8c38dbd24d6a”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
But, Powell also tried to dampen expectations that the Fed could unwind some of its hefty interest rate increases, cautioning:
“,”elementId”:”2f2c7e41-184d-4dba-ade7-858a1a01968f”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
\n
“If the economy performs broadly in line with those expectations, it will not be appropriate to cut rates this year.
\n
“,”elementId”:”a7646a29-61c2-4e4a-b573-1b7bba8f6f4f”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/feb/01/fed-small-interest-hike-inflation-eases”,”text”:”Fed announces smallest interest hike in a year as inflation ‘eases somewhat’”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”3d3cfae5-6b73-4e14-9ae7-389c84d4b053″},{“_type”:”model.dotcomrendering.pageElements.SubheadingBlockElement”,”html”:”
The agenda
“,”elementId”:”e32d6e54-8754-4a02-bdf5-2cbe8834e4e4″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
- \n
-
7am GMT: Germany’s trade balance for December
-
Noon GMT: Bank of England releases interest rate decision, and publishes Monetary Policy Report
-
12.30pm GMT: Bank of England press conference
-
1.15pm GMT: European Central Bank interest rate decision
-
1.30pm GMT: US jobless claims data
-
1.45pm GMT: European Central Bank press conference
\n
\n
\n
\n
\n
\n
“,”elementId”:”e625defb-ea7c-43fc-9c65-8b32ec858994″}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1675322302000,”blockCreatedOnDisplay”:”07.18 GMT”,”blockLastUpdated”:1675337544000,”blockLastUpdatedDisplay”:”11.32 GMT”,”blockFirstPublished”:1675322302000,”blockFirstPublishedDisplay”:”07.18 GMT”,”blockFirstPublishedDisplayNoTimezone”:”07.18″,”title”:”Bank of England expected to raise interest rates to 14-year high”,”contributors”:[],”primaryDateLine”:”Thu 2 Feb 2023 12.12 GMT”,”secondaryDateLine”:”First published on Thu 2 Feb 2023 07.18 GMT”}],”filterKeyEvents”:false,”id”:”key-events-carousel-mobile”}”>
Filters beta
Why did the bank increase the interest rate today?
This week’s BoE minutes showed most policymakers at the MPC were concerned that wages and prices in the UK would continue to rise even as inflationary pressures eased.
they say:
Seven members believe that it is necessary to increase the bank rate by 0.5 percentage points to 4% in this session.
Economic activity had weakened, but the latest data showed signs of greater resilience. Headline CPI inflation had started to ease and is likely to decline sharply for the rest of the year, a result of past developments in energy and other commodity prices. However, the labor market remained tight and domestic price and wage pressures were stronger than expected, pointing to the risk of further persistence in core inflation.
The measure of inflation expectations was still at high levels. Risks to the inflation outlook over the medium term were both large and asymmetric, with a bias towards greater persistence. This requires placing more weight on recent strength in the labor market and inflation data and relatively less on medium-term forecasts. A 0.5% increase in the bank rate in this session can remove the risk of increasing domestic wage and price pressures even as external cost pressures decrease.
but Swati religious And Silvana Tenerife Vainly, he argued against a tenth consecutive rise in Britain’s borrowing costs.
They noted that the real economy remained weak last year as a result of falling real incomes and tightening fiscal conditions. They also pointed to forward-looking indicators that the recession is affecting the labor market.
Bank: Inflation has probably reached its peak
The Bank of England believes that inflation is likely to have peaked in the UK and other advanced economies as well.
In a summary of today’s decision, the bank says:
Global consumer price inflation remains high, although it is likely to have peaked in many advanced economies, including the UK.
Wholesale gas prices have fallen recently, and global supply chain disruptions appear to have eased amid a slowdown in global demand. Many central banks have continued to tighten monetary policy, although market pricing suggests further cuts in policy rates in the future.
Policymakers were split 7-2 on interest rate hikes
The Bank of England is divided over today’s decision.
The Monetary Policy Committee voted by a majority of 7 to 2 to increase the Bank Rate by 0.5% to 4%.
two members Swati religious And Silvana Tenerifeprefers to keep the bank rate at 3.5%. [they had both voted for no change in December as well].
Bank of England interest rate decision
Newsflash: The Bank of England has raised UK interest rates to 4% as it continues to fight inflation.
The increase from the 3.5 percent widely expected by economists will put more pressure on mortgage payers and businesses struggling to pay their loans.
This is the 10th consecutive meeting in which the Bank’s Monetary Policy Committee has voted to raise UK borrowing costs.
UK rates are now at their highest level since October 2008, when the Bank just started cutting rates in response to the financial crisis.
Stand By Your Desks! The Bank of England is up next….
— Shaun Richards (@notayesmansecon) February 2, 2023
\n”,”url”:”https://twitter.com/notayesmansecon/status/1621115475953618947″,”id”:”1621115475953618947″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”b52b89ef-f7ee-4327-91bd-554b0905681a”}}”>
Stand by your desks! The Bank of England is next.
— Sean Richards (@notayesmansecon) February 2, 2023
Tensions are running high in the City with less than 15 minutes to go until the Bank of England’s decision on UK interest rates.
Money markets indicate that a 50 basis point or half percentage point increase to 4% is highly likely (about an 86% chance).
But the pound is still weaker today, down half a cent against the US dollar to $1.232.
Marius Hajikiriakossenior investment analyst at XMThe Bank of England says it faces a difficult task as it tries to strike a balance between containing double-digit inflation while business surveys point to a rapidly deteriorating economy.
Haji Kyriakos explains:
Markets have almost fully priced in a 50 basis point rate hike, but the decision could have a downside twist if the vote is sharply divided or updated forecasts continue to point to a recession this year. be
The days of ultra-low interest rates are behind us, ex Bank of England Legislator Michael Saunders says
Sanders said on Bloomberg TV this morning that people shouldn’t expect rates to return to the “very low levels we saw before the pandemic,” even if the BoE starts cutting rates next year.
UK interest rates fell to 0.5% in 2009 after the financial crisis, then bottomed out, but fell to 0.25% after the 2016 Brexit referendum. It then rose to 0.1% in March 2020 after the pandemic, before the bank. Started walking in December 2021.
Saunders It says Britain will not return to such low interest rates in the “foreseeable future”.
He says:
These were exceptional conditions, very low, universal and neutral interest rates, a long period of excess capacity, a long period of very low inflation.
And I think going through the pandemic, and then experiencing very high inflation last year, inflation expectations are likely to be consistently higher and require slightly higher nominal interest rates.
“The days of ultra low interest rates are behind us”
Former Bank of England policy maker Michael Saunders looks ahead to the central bank's decision with @flacqua https://t.co/i15FAPA8r2 pic.twitter.com/iz8AfycIYB
— Bloomberg UK (@BloombergUK) February 2, 2023
\n”,”url”:”https://twitter.com/BloombergUK/status/1621088910855094272″,”id”:”1621088910855094272″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”be86c3bc-8a0a-495d-9a8b-3dbcaf0f0bb3″}}”/>
Bloomberg also points out that (as noted earlier) the half-point rate isn’t quite priced in—there’s a possibility of a lower, quarter-point rate hike.
Money markets haven’t fully priced in a half-point hike at this Bank of England meeting
That indicates some doubt https://t.co/i15FAPA8r2 pic.twitter.com/c6W2tjClzs
— Bloomberg UK (@BloombergUK) February 2, 2023
\n”,”url”:”https://twitter.com/BloombergUK/status/1621070851108921345″,”id”:”1621070851108921345″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”a20aa9d9-a9a5-4e16-8d6a-c4ffee5bdf75″}}”/>
Stock markets opened strongly this morning after the US Federal Reserve slowed its interest rate hike cycle last night.
United Kingdom FTSE 100 This index has reached 7809 with an increase of 48 points or 0.6% and has returned to its highest level in the last four years which was recorded last month.
European markets are also higher with Germany DAX 1.5 percent increase.
Europe ↗️ and liking pending rate hikes, apparently$DAX 15411 +1.5% ⬅️🔝$FTSE 7801 +0.5%$CAC 7123 +0.65%$AEX 758 +1.3%$IBEX 9216 +1.3%$MIB 26922 +0.8%$SMI 11220 +0.15%$MOEX 2239 +0.4%$VSTOXX 17.38 🔻$DAX range = 15007 – 15408 ♉️
— Ted Darling (@tdarling1) February 2, 2023
\n”,”url”:”https://twitter.com/tdarling1/status/1621093063677329408″,”id”:”1621093063677329408″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”ae5aec11-1a29-4f26-9fd3-99ef3e810343″}}”/>
Craig Erlam, Senior market analyst at Oanda, Federal Reserve Chairman Jerome Powell cheered investors last night by talking about progress in easing inflationary pressures after the Fed raised interest rates by just 25 basis points.
Erlam says:
While Powell was determined not to overstate the Fed’s shift in view on inflation and interest rates, some comments were well received by markets.
Accepting that deflation has begun is one clear comment, but this was accompanied by his insistence that they needed more evidence and that it would take a few more hikes before monetary policy could be appropriately restrained. find
Borrowers will be hit hard if the Bank of England raises interest rates again this afternoon William Mastersthe UK’s top sales trader on the investment platform saxo
The Bank of England looks set to raise interest rates for the 10th time in a row today, from 3.5% to 4%.
With inflation currently at 10.5%, the Bank has been stuck between a rock and a hard place for a long time and has no choice but to raise rates again with the aim of bringing inflation down to 2%.
This rate hike has hit borrowers hard, and those with particularly large mortgages or credit cards continue to feel the squeeze, as the cost of living has already eroded any consumer purchasing power. . Some homeowners have even decided to roll the dice and apply floating rates to their mortgages in the hopes that inflation will subside soon and rates will drop again later in the year.
The UK is still likely to enter recession in the coming months, something the BoE should factor into its decision, and in the longer term consumer prices will be under pressure, although many businesses will be negatively impacted by costs. for management.”
Ofgem has launched an urgent investigation into British Gas’ prepaid meters
Britain’s energy regulator, Ofgem, has announced it will launch an investigation into British Gas, after an investigation found the company’s debt collectors broke into customers’ homes to forcibly adjust their payment meters, even when they were highly vulnerable. .
An undercover reporter from The Times was working for Arvato, the company used by British Gas to track down debts, and discovered they were working with a locksmith to break into the home of a single father of three young children and turn it into Change a prepaid meter.
Other British Gas customers forced to install pre-paid meters in recent weeks include a 50-year-old woman described as having “severely bipolar mental health problems”, according to job notes seen by The Times. It takes and is affected to some extent. Bina” and a mother whose “daughter is disabled and has a lift and [an] Electric wheelchair.
AFS employees are incentivized with rewards to fit prepaid meters. But if the families who have these gas meters are not able to pay the charge, their heating will be cut off.
One Ofgem The spokesperson says:
“These are very serious allegations by The Times which we will investigate immediately with British Gas and will not hesitate to take decisive enforcement action.
“It is unacceptable for any supplier to impose mandatory installations on vulnerable customers who are struggling to pay their bills, before exhausting all options and without carrying out thorough checks to ensure it is safe and practical.
We recently announced a major market-wide review investigating the rapid growth in prepaid meter installations and potential license violations. It is clear that suppliers must work hard to look after their customers at this time, especially those who are vulnerable, and the energy crisis should not be an excuse for unacceptable behavior towards any customer – especially those in vulnerable circumstances. are, be
Following an investigation by The Times, British Gas has suspended the use of court orders to force the installation of pre-paid meters.
Chris O’Shea, chief executive of British Gas owner Centrica, said the allegations surrounding Arvato were unacceptable.
The pound is slightly weaker this morning as traders await the Bank of England’s midday interest rate decision.
The pound fell 0.3 percent, or a third of a cent, to $1.234 against the U.S. dollar and the same amount against the euro to 1.122 euros.
The euro hit a 10-month high against the dollar at $1,099, as markets expect the European Central Bank to raise interest rates by half a point this afternoon as the US Federal Reserve cuts its rate of hike. reduced to 25. Base score (quarter) last night.
Just in: Heathrow Airport is looking for a new CEO.
Heathrow has told the City that chief executive John Holland Kay has decided to step down this year.
This comes after nine years at the helm of Britain’s biggest hub, which included disruption from the Covid-19 pandemic, when passenger numbers hit a 50-year low, followed by last year’s chaotic scenes. It happened because passengers missed their flights and lost their luggage.
There were also tensions with the airlines over the charges Heathrow was allowed to levy on them:
The board has begun a process to select his successor, and Holland-Kay has put his resignation on hold until a new CEO takes office.
The chairman of Heathrow Airport, Lord Deaton, said Holland Kay had been “a fantastic leader for Heathrow”, adding:
Over the past nine years, he has worked tirelessly in partnership with shareholders, ministers, airlines and other stakeholders to ensure that the country can be proud of its ‘front door’. The Board would like to place on record our appreciation to John for his dedication and commitment to Heathrow during his tenure as CEO.