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Ultra-low interest rates are set to return with inflation due to tumble in the near future, according to the International Monetary Fund (IMF).

This will be welcome news to homeowners, many of whom have recently been hit with a steep rise in mortgage costs.

The United Nations financial agency says that the combination of an ageing population and low productivity is set to rein in inflation and take interest rates back to pre-COVID levels.

Skyrocketing inflation, currently at a four-decade high in Britain, is only a hiccup in the overall trend for low interest rates, rather than a permanent change to the global financial landscape, the IMF said.

“Recent increases in real interest rates are likely to be temporary. When inflation is brought back under control, advanced economies’ central banks are likely to ease monetary policy and bring real interest rates back towards pre-pandemic levels,” a report by IMF economists concluded.

The IMF analysis found that the “natural” rate of interest had not been changed by the pandemic.

The so-called “natural” rates of interest, an anchor for monetary policy that neither stimulates nor discourages economic activity, “will remain low in advanced economies or decline further in emerging markets,” the report concluded.

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If accurate, that means less fiscal pressure as governments will be able to borrow more cheaply.

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But it would mean central banks, particularly in developed countries, may again have to rely on bond buying and other strategies to cut policy interest rates.

Some economists have argued the pandemic shifted the natural rate of interest higher, reversing forces like globalisation that helped keep borrowing costs low and also driving up government debts to historic levels.

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The Bank of England has released documents revealing a slight increase in UK’s GDP in Q2 of 2023, contrary to its earlier predictions of a technical recession.

The IMF said it is possible things have changed, and noted that the impact of developments like the transition to a less carbon-intensive economy remain to be seen.

However, the fund said its analysis suggests that the current high rates “are likely to be temporary”.

Once rates normalise to prior low levels, a deep enough recession may force central banks “to resort to the same strategies they employed in the decade before the pandemic, such as balance sheet policy and forward guidance”.

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Government accused of ‘cover-up’ over collapse of China spy trial

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Government accused of 'cover-up' over collapse of China spy trial

Kemi Badenoch has accused the government of a “cover-up” over the collapse of a China spy trial.

The Tory leader said there were a “lot of questions to answer” as to why the trial involving two men did not proceed.

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It is expected that ministers will have to answer questions about the case today, as parliament returns from recess.

In particular, there are questions around the role played by Jonathan Powell, the prime minister’s national security adviser, in the trial not going ahead.

Ministers have repeatedly said Mr Powell played no role in the decisions that led to the collapse of the trial – but Ms Badenoch said she was “worried that there is a cover up taking place”.

Speaking to broadcasters in Grantham today, Ms Badenoch said: “We will be making sure that we ask questions in parliament about exactly who knew what, where and when, but Jonathan Powell certainly has questions to answer.”

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She refuted suggestions from ministers that Mr Powell had had no involvement in the collapse of the trial, saying: “We are seeing information that contradicts that.

“That is why it is very important that the government come clean about who knew what, where, when, and why this has happened.”

Former parliamentary researcher Christopher Cash, 30, of Whitechapel, east London, and teacher Christopher Berry, 33, of Witney, Oxfordshire, were charged with passing politically sensitive information to a Chinese intelligence agent between December 2021 and February 2023. They have both denied the allegations.

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Over the past week, Sir Keir Starmer, his ministers and Mr Powell have faced accusations they were involved in the trial being dropped.

Last week Stephen Parkinson, the director of public prosecutions and the head of the Crown Prosecution Service, took the unusual step of sending MPs a letter to claim that the government repeatedly refused to provide evidence that China represented a national security threat at the time of the allegations.

Mr Parkinson said the CPS had tried “over many months” to get the evidence it needed to carry out the prosecution, but it had not been forthcoming from the government.

Downing Street also said today it was “entirely false” to suggest the government influenced the collapse of the case because of concerns Beijing could withdraw investment in the UK.

Asked about reports in the Sunday Times which suggested a decision was taken high up in government to abandon the case, the prime minister’s official spokesman told reporters: “It is entirely false. The CPS (Crown Prosecution Service) decision to drop the case was entirely a matter for the CPS.

“There was no role for any member of this government, no minister, or special adviser, to take any decision in relation to this case. That is entirely for the CPS.”

The government had argued that China needed to have been branded an “enemy” during the period it was accused of spying for the prosecution to go ahead – effectively blaming the previous Conservative government.

The Conservatives claim the government’s rationale is an excuse because it had said many times Beijing was a national security threat while it was in government.

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The prime minister has said he wanted to be “absolutely clear no ministers were involved” in any decisions relating to the case, but notably sidestepped answering whether Mr Powell was involved.

Bridget Phillipson, the education secretary, yesterday gave the government’s most definitive answer yet about whether Mr Powell was part of the reason the case was dropped weeks before they were set to go on trial.

Asked on Sunday Morning with Trevor Phillips if she could assure him that the national security adviser played no role in the decision, Ms Phillipson said: “Yes, I can give that assurance.

“We’re very disappointed that the CPS were not able to take forward the prosecution.”

The Liberal Democrats have called on the government to hold an inquiry into the collapse of the case.

Calum Miller, the party’s foreign affairs spokesman, said the case had “exposed appalling gaps in our government’s ability and willingness to challenge China’s espionage efforts”.

“We cannot let the government sweep this case under the rug in its efforts to cosy up to President Xi. An inquiry – preceded by rigorous scrutiny through parliament – would provide the answers the public deserves.”

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Tommy Robinson refused to give phone pin to police as he drove his Bentley to Benidorm, court hears

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Tommy Robinson refused to give phone pin to police as he drove his Bentley to Benidorm, court hears

Tommy Robinson refused to hand over his phone pin when police stopped his Bentley on the way to Benidorm, a court has heard.

He allegedly told officers “Not a chance, bruv” and said he was a journalist when they pulled him aside at the Channel Tunnel at Folkestone in July 2024.

Robinson, real name Stephen Yaxley-Lennon, is accused of “frustrating” counter-terrorism powers by refusing to give access to the phone.

He denies the charge.

The right-wing political activist was flanked by security guards as he arrived at Westminster Magistrates Court for the opening of the trial on Monday.

The 42-year-old faces three months in prison and/or a £2,500 fine if found guilty.

Robinson had £13,000 and 1,900 euros on him when he was stopped and told police he was going to Benidorm in Spain for a few days, said prosecutor Jo Morris.

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He allegedly refused to give the pin as he claimed the phone had sensitive “journalist material” on it.

He’s said to have told police: “It’s my work, I’m a journalist,” claiming it contained information about “vulnerable girls”.

The court heard Robinson was stopped in his silver Bentley SUV because he gave “short, vague replies” about what he was doing and “made no eye contact”.

PC Mitchell Thorogood told the court it was also “unusual” he bought tickets on the day rather than in advance and was in an expensive car not registered in his name.

Pic: PA
Image:
Pic: PA

When police took Robinson into an interview room and demanded his phone, he allegedly told them: “Not a chance bruv… you look like a c*** so you ain’t having it.”

Officers said they recognised Robinson when they stopped him and his lawyer, Alisdair Williamson KC, suggested the stop may have been “discriminatory” against his political beliefs.

Police can stop anyone at a UK port and hold them for six hours if they suspect they may be involved in planning or committing acts of terrorism.

They are legally obliged to answer questions and must give access to their electronic devices or face a criminal charge.

In a video on X before the hearing, Robinson said Elon Musk had “picked up the legal bill” for “this absolute state persecution”.

The case comes a month after Robinson led a huge rally in central London under the banner ‘Unite the Kingdom’.

The trial continues.

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Man arrested over 1994 murder of 13-year-old Lindsay Rimer

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Man arrested over 1994 murder of 13-year-old Lindsay Rimer

A man has been arrested on suspicion of the 1994 murder of 13-year-old Lindsay Rimer.

Police said the man was arrested at an undisclosed prison where he is serving a sentence for other offences.

The man, who is being interviewed today and tomorrow, is expected to be bailed and returned to prison while enquires continue.

Officers are also interviewing a number of potential witnesses in the Hebden Bridge and wider Halifax area.

Lindsay left her home to buy a box of corn flakes late during the evening of 7 November, 1994, but didn’t return home.

Her body was then found in a canal close to her home six months later.

Following today’s arrest, senior investigating officer, detective chief inspector James Entwistle, said: “We remain very firmly committed to doing everything we can to get justice for Lindsay, and to give her family the answers they still so desperately need after all these years.

Lindsay Rimer's body was found in a canal close to her home six months later. Pic: West Yorkshire Police
Image:
Lindsay Rimer’s body was found in a canal close to her home six months later. Pic: West Yorkshire Police

“The arrest we have made today comes as a result of our continued focus on progressing the investigation.

“We are keeping Lindsay’s family updated and, while we appreciate the understandable public interest that today’s arrest will bring, we do not anticipate any immediate developments at this stage.

“Although it is now more than thirty years since Lindsay was murdered, we remain convinced there is someone out there who has vital information that could finally help to ease her family’s pain, and we urge them do the right thing and tell us what they know.”

Anyone with further information has been urged to contact police by calling 101 quoting Operation Posemill, or sending a text or voicemail to 07707147314.

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