Economy is almost certainly in recession and the picture ahead is murky

Published

3 years ago

November 3, 2022

admin

Let’s start with what we do know.

The economy is now almost certainly in recession. It will not be pleasant. This is a recession which will be felt in most households’ pockets – both through the rise in energy prices and shop prices and the rise in the cost of borrowing.

And when it comes to the cost of borrowing, things are certainly getting tougher. Today the Bank of England raised its official interest rates by 0.75 percentage points, meaning if you’re on a floating rate loan tied to Bank rate the increase will be immediately reflected in your monthly repayments.

In a sense, the Bank is merely doing what most people had expected and what markets had already priced in: in other words, the current fixed rate loans out there on the market already assumed something like this happening.

Remember that point: we’ll come back to it.

So we know the economy is in recession. We know prices are very high and times are looking tough – especially if you have a mortgage which needs to be re-fixed soon. But here’s where the certainty ends and the murkiness begins.

Normally the Bank of England produces one main forecast in its Monetary Policy Report – the quarterly document in which it gives its sense of the state of the economy. But this time around it did something unusual: it produced two, and gave quite a lot of prominence to both of them.

A money market rollercoaster

Why? Well, it comes back to the fact that money markets have been on a rollercoaster recently. As you’ll recall if you’ve followed the ride, in the wake of the mini-budget, expectations for where the Bank’s interest rate was going next year leapt up to over 6%. Since Liz Truss‘s exit, those expected rates have begun to fall, to the extent that as of this week they were expecting a peak of 4.75%. That’s a big change.

And these numbers matter enormously: the higher the rates, the more households who will struggle to make their repayments and the tougher life will get for businesses, many of which will struggle to operate. So even a change of a few fractions of a percentage point will make a big difference.

Eight successive quarters of contraction

That brings us back to the Bank’s latest forecasts. It has to base those forecasts for the state of the economy off an assumption of what’s happening to those interest rates. So it typically takes a two week “snapshot” of what money markets expect for borrowing rates and then builds a forecast around it. Normally that’s a pretty uncontroversial exercise, but not this time. Because as we all know, those rates were all over the place following the mini-budget and the ensuing gilt market meltdown.

The upshot is that the Bank’s central forecast – the one we usually look at – is particularly bad. It involves eight successive quarters of contraction: that would be the single longest recession since comparable records began in the early 20th century – though it would be much less deep than nearly all of those downturns. It would see the economy shrink by nearly 3% and unemployment get up to 6.5%.

But here’s the thing: that forecast is based on market expectations that Bank rate would get up to 5.25% next year. And the Bank is unusually explicit today that it thinks that is very unlikely. So that recession forecast is a little bit of a chimera: it is based on a scenario which will probably not happen.

So here’s where that other forecast comes in. The Bank produced a separate set of figures which ignore all that market mayhem and just imagine rates stay where they are, as of this afternoon, at 3% in perpetuity. On the basis of that forecast, there is still a recession, but it is barely more than half the depth of its central forecast and doesn’t last half as long. Unemployment doesn’t peak as high. Household income isn’t quite as badly hit. It’s tough, but not awful.

More rate rises

So: is that forecast a more reliable picture of the impending months? Well, not necessarily, for two reasons. First, the Bank said explicitly today that it thinks it will have to raise interest rates again, albeit not as high as markets were expecting a few weeks ago. What that means is anyone’s guess, but the signal is that they might not even have to rise as high as the 4.75% markets are currently pricing in. But that does mean a slightly worse outlook.

Second, the Bank’s forecast doesn’t make any assumptions about what the government’s Autumn Statement is going to do to the economy. And given everyone expects the government to cut spending and/or raise taxes, it’s a fair assumption that that could also bear down on economic activity.

It’s complicated

So, as you can see: it’s complicated. I know that’s not especially helpful if you’re after a quick summary. But it’s a fairer reflection of where we are. The UK is in recession, but it’s worth being a little wary of the more lurid headlines out there about how it’s the “longest in history”. The Bank is saying that’s a possibility if rates went higher (and it doesn’t currently think they will).

But there is another interesting thing going on here, which comes back to that point I made at the start – that when the Bank moves its rates it is, in a sense, reflecting what people out there in the market are expecting it to do. Those expectations matter – and the Bank can often influence them itself.

Today’s Monetary Policy Report contains some pretty heavy hints that the market has overshot its expectations about where Bank rate will go in the future. In other words, the report itself could plausibly persuade investors to notch down their expectations for where interest rates are heading next year.

If that happened, we would be left with an interesting paradox: that even as it raises interest rates even more than it has ever done since it became independent in 1997, the Bank could actually push down what markets expect that eventual peak to be.

In other words, this interest rate increase could be reducing the real-life cost of borrowing in the mortgage markets. Fixed rate loans could get cheaper as a result of today’s events, not more expensive.

Perhaps that sounds topsy-turvy, but then it’s no more weird than many of the other turns of this rollercoaster in recent weeks.

UK

Author Dame Jilly Cooper has died

Published

8 hours ago

October 6, 2025

admin

Author Dame Jilly Cooper has died, her publisher has said.

“It is with great sadness that we announce the death of Dame Jilly Cooper, DBE who died on Sunday morning, after a fall, at the age of 88,” a statement said.

The Queen paid tribute to Dame Jilly, calling her a “legend” who was a “wonderfully witty and compassionate friend”.

The best-selling author was renowned for her raunchy, so-called “bonkbuster” novels, which portrayed the scandals and sex lives of wealthy country social circles, including Rivals, Riders and Polo.

She was praised for her blend of risqué storylines and critique of Britain’s class system, personified by showjumping lothario Rupert Campbell-Black.

Her children Felix and Emily said: “Mum was the shining light in all of our lives. Her love for all of her family and friends knew no bounds.

“Her unexpected death has come as a complete shock.

“We are so proud of everything she achieved in her life and can’t begin to imagine life without her infectious smile and laughter all around us.”

Dame Jilly was propelled to commercial success in the 1980s, and sold 11 million copies of her books during her more than fifty-year career.

Last year, Rivals was adapted into a successful TV series, which she worked on as an executive producer.

Tributes to author who created ‘a whole new genre’

Dame Jilly was a long-standing friend of the Queen.

In a statement released by Buckingham Palace, she said: “I was so saddened to learn of Dame Jilly’s death last night.

“Very few writers get to be a legend in their own lifetime but Jilly was one, creating a whole new genre of literature and making it her own through a career that spanned over five decades.

“In person she was a wonderfully witty and compassionate friend to me and so many – and it was a particular pleasure to see her just a few weeks ago at my Queen’s Reading Room Festival where she was, as ever, a star of the show.

“I join my husband the King in sending our thoughts and sympathies to all her family.

“And may her hereafter be filled with impossibly handsome men and devoted dogs.”

The author’s many fans included former prime minister Rishi Sunak, who said the books offered “escapism”.

‘Dame Jilly defined culture’

Her agent Felicity Blunt said: “The privilege of my career has been working with a woman who has defined culture, writing and conversation since she was first published over fifty years ago.”

She added: “You wouldn’t expect books categorised as bonkbusters to have so emphatically stood the test of time, but Jilly wrote with acuity and insight about all things – class, sex, marriage, rivalry, grief and fertility.”

The executive producers of the Disney+ adaptation, Rivals, said they are “broken-hearted” and “her legacy will endure”.

Dominic Treadwell-Collins and Alex Lamb added: “Jilly was and always will be one of the world’s greatest storytellers, and it has been the most incredible honour to have been able to work with her to adapt her incredible novels for television.”

As tributes rolled in on Monday, TV presenter Kirsty Allsopp wrote on X: “I know 88 is a good age, but this is very sad news.

“A British institution, funny, enthusiastic and self-deprecating, we don’t see enough of it these days.”

Her publisher Bill Scott-Kerr said: “Jilly may have worn her influence lightly, but she was a true trailblazer.

“As a journalist she went where others feared to tread, and as a novelist she did likewise.

“With a winning combination of glorious storytelling, wicked social commentary and deft, lacerating characterisation, she dissected the behaviour, bad mostly, of the English upper middle classes with the sharpest of scalpels.”

The ‘unholy terror’

Born in Essex in 1937, Jilly Cooper came from a Yorkshire family known for newspaper publishing and politics.

Her writing career began in 1956 as a junior reporter on the Middlesex Independent, covering everything from parties to football.

She had said she was known as the “unholy terror” at school, and was sacked from 22 jobs before finding her way into book publishing.

Dame Jilly started writing stories for women’s magazines in 1968, and found her break in 1969 when The Sunday Times published a story on being an ”undomesticated” homemaker. It gave rise to a column that lasted over 13 years.

In 2019 she won the inaugural Comedy Women in Print lifetime achievement award, and in 2024 was made a dame for her services to literature and charity.

UK

Security guard reveals new details of Manchester synagogue attack

Published

10 hours ago

October 6, 2025

admin

Security guard reveals new details of Manchester synagogue attack

A security guard who helped barricade the doors during the Manchester synagogue attack has told Sky News he thought “we are all going to die” – as he watched two of his friends get struck by what’s believed to be a police bullet.

Ivor Rosenberg was a working volunteer security guard on the morning Jihad al Shamie, 35, launched his attack on the Heaton Park Hebrew Congregation Synagogue in Crumpsall.

He described first confronting al Shamie outside the synagogue some minutes earlier, thinking “he’s up to no good” – after he told different people conflicting stories about how he was looking for his car and a pub.

“He looked at me and said ‘what are you looking at?’,” Mr Rosenberg told Sky News.

“I just said, ‘I don’t know’… he said ‘you’re very brave inside the fence’… and he walked away.”

Mr Rosenberg said he started walking back up the stairs towards the synagogue when he heard “an almighty bang”.

“I turned around and I saw the car smashed into the wall of the gate,” he said.

He described Alan Levy, the synagogue chairman, managing to lock the main door as he ran straight to the office and dialled 999.

“I was screaming at them – ‘we’re under attack, we’re under attack!’,” he said.

“I could hear him banging on the doors, trying to get in – threatening to kill everyone.”

Mr Rosenberg said he looked out of the window and saw al Shamie banging on the synagogue door with a “large knife”.

“I was terrified,” he said.

After running to get chairs to put up against the synagogue door, he described holding the doors shut with a group of nine or 10 others from the synagogue.

It was then that he saw a bullet come through the door – hitting two of his friends.

After the police initially opened fire on al Shamie, Mr Rosenberg said he saw him trying to get up.

“I screamed – he’s getting up again,” he said.

“I stood back and we could hear a shot.

“Yoni – who was standing just a couple of feet away from me – dropped down to the ground.”

Yoni Finlay is currently recovering in hospital. He is one of two men that Greater Manchester Police believe they accidentally struck with gunfire while trying to shoot al Shamie.

The other is Adrian Daulby, 53, who died from his injuries.

Melvin Cravitz, 66, who was among those who helped to prevent al Shamie from entering the synagogue, also died.

Mr Rosenberg described seeing a “bullet hole” in the door – and believes the same bullet hit both Mr Finlay and Mr Daulby, who was also behind the door with him at the time.

He said at first he believed Mr Finlay, a friend of his for many years, was intentionally ducking to avoid the gunfire. He then quickly realised he had been injured.

“He said ‘I’ve been hit’. I think the bullet came through him and hit Mr Daulby. I thought ‘we’re all going to die’ for a minute. It was terrifying,” Mr Rosenberg said.

“I took my jacket off and cradled Yoni’s head. It was very, very scary.”

Mr Rosenberg said both of the men were “heroes” – and has had updates that Mr Finlay is continuing to recover in hospital.

Two other men also remain in hospital with serious injuries – a security guard with car-impact injuries and a community worker with stab wounds.

Mr Rosenberg said that he is still struggling to come to terms with what happened that day.

“I’m okay until someone asks me how I’m doing – then it’s hard,” he said.

Al Shamie was shot dead by police.

Four people arrested on suspicion of preparing terrorist acts remain in custody after police were granted a further five days to question them on Saturday.

UK

Former England rugby captain Lewis Moody reveals motor neurone disease diagnosis

Published

14 hours ago

October 6, 2025

admin

Former England rugby captain Lewis Moody reveals motor neurone disease diagnosis

England’s 2003 Rugby World Cup winner Lewis Moody has been diagnosed with motor neurone disease.

The 47-year-old former England captain said it had been “incredibly hard to process and a huge shock to me and my family”.

In a social media post, he wrote: “I’m writing to share some tough news. I have recently been diagnosed with ALS, also known as Motor Neurone Disease (MND).”

He said: “I feel fit and well in myself and I’m focused on staying positive, living life and dealing with the changes I will experience as they come.

“I am being well supported by my family, friends and medical professionals and I’m truly grateful to those who, in their time, helped progress research to support others, like me, living with this disease.

Since retiring from the sport in 2012, Moody and his wife, Annie, have dedicated much of their time to fundraising for The Lewis Moody Foundation, which supports those affected by brain tumours.

“My plan is to continue with this, but to also create an opportunity to support a charity closer to my current situation,” said Moody, who was awarded an MBE for services to rugby in 2004.

“I would be so grateful for your help with this and look forward to sharing more, once I am clear on what this looks like.”

Rugby players could be prone to motor neurone disease – but causes still unknown

Fellow rugby players Doddie Weir and Rob Burrow have died from the disease in recent years.

The sport – and in particular England skills coach Kevin Sinfield – have worked on high-profile fundraising campaigns to tackle it.

Athletes appear to be disproportionately likely to contract MND, which causes muscle weakness to the point it can eventually be hard to eat or breathe.

Research from Durham University found rugby players could be especially prone, as those who have suffered multiple concussions have higher levels of certain proteins in their blood that are linked to the disease.

But the exact cause of it remains unknown.

“For now, please know I feel your love and support,” Moody added.

“All I ask is that I am given some space to navigate this with my wife and sons, and those closest to us – but without doubt, I will continue to embrace life and grasp opportunities in the same way I always have.”

What is motor neurone disease?

Motor neurone disease (MND) causes muscle weakness that gets worse over the course of months or years.

It’s usually life-shortening and there’s currently no cure, but treatments have been developmed to help manage the symptoms.

Initial symptoms can be: stiff or weak hands, weak legs and feet and twitches, spasms or muscle cramps.

They can worsen into problems breathing, swallowing and speaking, changes to personality and mood and being unable to walk or move.

It affects around one in 300 people.

A handful of studies have shown a correlation between professional sports to MND, but do not prove a cause.

A ‘glittering career’

Moody won 71 caps for England and also five for the British and Irish Lions, and was a seven-time title winner with Leicester.

He is perhaps best known for winning the final lineout during the 2003 World Cup final, which led to Jonny Wilkinson’s historic match-winning drop goal.

Lions Rugby Chair Ieuan Evans MBE said: “We are all greatly saddened to hear the news of Lewis Moody’s diagnosis.”

He added: “As a player, Lewis inspired so many fans during a glittering career.”

Moody joined Leicester Tigers from Oakham School and made 223 appearances between 1996 and 2010.

The club said everyone there was “deeply saddened to learn that one of our greatest players” had been diagnosed with MND.

“The figures, trophies and awards tell you what an incredible player Lewis was, but that is only half the story,” said Tigers chief executive Andrea Pinchen.

“As an individual, his commitment to his club along with his warmth and passion shone through, which endeared him to teammates, staff and supporters alike.”