Rate hikes ‘likely’ this year in fight against inflation: Feds Jerome Powell

Published

2 years ago

July 4, 2023

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With inflation in the United States still excessive, most Federal Reserve officials expect to raise interest rates further this year, Chair Jerome Powell told a House committee Wednesday.

Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go, Powell said on the first of two days of semi-annual testimony on Capitol Hill.

Even so, the Fed last week kept interest rates unchanged after 10 straight hikes so it could take time to gauge how higher borrowing rates have affected the economy, Powell said.

The contrast between the Feds stated concern over still-high inflation and its decision to skip a rate hike has heightened uncertainty about its next moves.

The hazier messaging suggests that Powell is seeking to balance competing demands from those Fed officials who want to keep raising rates and others who feel the central bank has done enough.

Asked on Wednesday to clarify last weeks messaging, Powell told the House Financial Services Committee that keeping rates level was consistent with the Feds increasing focus: Slowing the pace of its hikes in order to avoid raising rates higher than needed to reduce inflation and risk causing a deep recession in the process.

It may make sense to move rates higher but to do so at a more moderate pace, Powell said, likening the Feds rate hikes to a journey. As you get closer to your destination, as you try to find that destination, you slow down even further.

Partisan differences over the Feds policies emerged at the hearing, with Rep. Patrick McHenry, the North Carolina Republican who chairs the committee, saying the central bank must remain committed to eliminating this stealth tax on American workers and families, referring to inflation. And I urge you to continue that resolve.

Yet Rep. Maxine Waters of California, the senior Democrat on the panel, said the Fed made the right decision to pause interest rate hikes.

In his remarks Wednesday, Powell also indicated that the Fed chose to keep its key interest rate steady last week so it could assess the impact ofthree large bank failuresthis spring on the banking sector and whether the failures would reduce credit to consumers and businesses and slow the economy.

Despite the Feds focus on combating inflation, Republican committee members spent more time Wednesday questioning Powell about the central banks stance on bank regulation. McHenry suggested that Congress consider removing the Feds authority to regulate banks, if the policymakers take too strict an approach to overseeing small and medium-size lenders and potentially weaken lending.

After this years bank failures, Michael Barr, the Feds top financial regulator, indicated that the central bank might consider raising the level of capital that banks are required to hold in reserve against potential losses as a way to limit further failures.

But some committee Republicans argued Wednesday that requiring banks to hold more funds in reserve would restrict their ability to lend. Small businesses, they warned, would be especially hurt because they depend more on bank loans than do large companies, which can issue their own bonds. Reduced lending, they asserted, would weaken the economy.

Powell responded that any new such rules would likely focus on the largest U.S. banks those with more than $100 billion in assets, like Silicon Valley Bank and the other two institutions that failed. Community banks, by contrast, typically have under $10 billion in assets.

The Fed chair also said it could be several years before such rules would take effect. At the same time, he underscored that there is always a trade-off between requiring banks to hold certain levels of funds in reserve and encouraging lending. The challenge, he said, is to strike the right balance.

With inflation still well above the Feds 2% target, most economists have said they believe that a rate hike at its next meeting in late July is all but assured. What actions the central bank might take after that remains much less clear. The policymakers indicated last week that they expect to raise rates twice more this year. Yet they might not follow through if economic data suggests that inflation is falling quickly back to their target level.

Speaking at a news conference last week, Powell said there were no plans to raise rates at every other meeting or to follow any other particular time frame. Instead, as he reiterated Wednesday, Fed officials will monitor economic data and make their rate decisions meeting by meeting.

The central banks streak of rate increases have madeborrowing for consumersand businesses more expensive across a range of loans, including home and auto loans, credit cards and business borrowing. The goal has been to cool inflation by slowing spending and hiring.

Last year, the Fed jacked up its benchmark rate at a breakneck pace, including by three-quarters of a point on four occasions. Now, with year-over-year inflation having eased from9.1% a year ago to 4%, Powell has indicated that the Fed wants to move much more slowly.

A slower pace of rate increases, Powell has said, could help the Fed achieve a tricky feat: Weaken the economy enough to tame inflation, without undermining it so much as to cause a deep recession.

Yet on Wednesday, Powell repeated a warning he has often made: Defeating inflation wont be painless.

Reducing inflation is likely to require a period of below-trend growth and some softening of labor market conditions, he said.

Softer labor market conditions would include rising layoffs and a higher unemployment rate. Fed officials, though, have said they hope to curb inflation mainly by reducing the number of open jobs rather than through mass layoffs.

Cutting demand for workers would allow employers to slow their wage increases, thereby helping keep a lid on inflation.

Last week, 12 of the 18 Feds policymakers indicated that they envision at least two more rate hikes this year, and four predicted one additional increase. Only two officials forecast that the central bank will keep its key rate at its current level of 5.1% through years end.

Entertainment

Dua Lipa and Coldplay call on government to keep its promise on ticket resales

Published

1 hour ago

November 13, 2025

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Dua Lipa and Coldplay call on government to keep its promise on ticket resales

Some of the biggest names in music – including Coldplay, Dua Lipa and Radiohead – have urged the government to honour a pledge to cap ticket resale prices and shutout touts.

They have joined artists including The Cure’s Robert Smith, New Order, Mark Knopfler, Iron Maiden, PJ Harvey and this year’s Mercury Prize winner Sam Fender to sign a statement calling for a cap to “restore faith in the ticketing system” and “help democratise public access to the arts”.

Other signatories include the watchdog Which?, FanFair Alliance, O2, the Football Supporters’ Association and organisations representing the music and theatre industries, venues, managers, and ticket retailers.

In the statement, the coalition says new protections are needed to “help fix elements of the extortionate and pernicious secondary ticketing market that serve the interests of touts, whose exploitative practices are preventing genuine fans from accessing the music, theatre, and sports they love”.

Labour had promised in its manifesto to put a stop to concert-goers being scammed or priced out of events by touts using bots to buy tickets in bulk the moment they go on sale, which they can then sell on for huge mark-ups on secondary ticketing websites.

In government, the party again made that promise – but more than a year after it vowed action, and seven months since its consultation on the issue closed, there has been no clear indication of when new laws will be introduced.

The campaign comes as a new investigation from Which? found prolific sellers in locations including Brazil, Dubai, Singapore, Spain, and the US hoovering up tickets for popular events in the UK before relisting them at vastly inflated prices on StubHub and Viagogo.

How much?!

Which? found Oasis tickets for Wembley shows listed for £3,498.85 on StubHub and £4,442 on Viagogo.

A seat for the Minnesota Vikings vs Cleveland Browns NFL clash at Tottenham Hotspur was listed for £3,568.39 on StubHub, while a Coldplay ticket, also for Wembley, was £814.52 on StubHub.

And a ticket for the All Points East festival in London’s Victoria Park, headlined by Raye, for £114,666 on Viagogo.

The watchdog found it was often difficult for buyers to establish the seller’s identity or to contact them – despite the Competition and Markets Authority securing a court order in 2018 requiring Viagogo to outline the identity of traders.

And there’s more…

Which? also found evidence of speculative selling – when tickets are listed on secondary sites even though the seller has not bought them yet.

Tickets for a Busted vs McFly show in Glasgow, which were available through Ticketmaster – the original seller – were simultaneously being listed on StubHub and Viagogo at double the price.

Government to set out plans ‘shortly’

Which? consumer law expert Lisa Webb urged Prime Minster Sir Keir Starmer to commit to legislation.

A government spokeswoman said it is “fully committed to clamping down on touts,” had listened to comments in response to the consultation earlier this year, and would set out its plans “shortly”.

Business

Resident doctor strikes: I don’t want people to suffer but we have to walk out again, says BMA chief

Published

1 hour ago

November 13, 2025

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Resident doctor strikes: I don't want people to suffer but we have to walk out again, says BMA chief

The British Medical Association (BMA) has defended a new round of resident doctor walkouts starting on Friday, insisting medics’ pay is still “way down” compared with 2008 and that the government has failed to finish “a journey” towards restoring it.

BMA chair Dr Tom Dolphin told Sky News the dispute remains rooted in years of pay erosion that have left resident doctors far behind other public sector workers.

“When we started the dispute, […] the lowest level of the resident doctors were being paid £14 an hour,” he said.

“There were some pay rises over the last couple of years that brought that partly back to the value it should be at, but not all the way.

“The secretary of state (Wes Streeting) himself called it a journey, implying there were further steps to come, but we haven’t seen that.”

When asked if the row ultimately “comes down to money”, he replied: “In the sense that the secretary of state doesn’t want to or isn’t able to fund the pay increases to match the value that we had in 2008.”

Dr Dolphin argued that while “the general worker in the economy as a whole” has seen pay catch up since the 2008 financial crash, “doctors are still way down”.

The government points out that its 29% settlement last year was one of the largest in the public sector and was intended to draw a line under two years of walkouts.

How much do resident doctors earn?

After the most recent pay awards, in 2025/26 a medic just out of university receives a basic salary of £38,831 and has estimated average earnings of £45,900 after factors like extra pay for unsociable hours are taken into account, according to medical think tank the Nuffield Trust.

That average figure rises to £54,400 by the second year and a more senior speciality registrar earns an average of £80,500.

The BMA says that when the dispute started, the most junior doctors were making around £14 per hour. That works out at £29,120 per year for a 40-hour week.

That’s very close to the earnings of a doctor fresh out of medical school in 2022/23 – £29,384, according to Full Fact.

But that’s over a 52-week year without taking into account paid holiday or unsociable hours.

But Dr Dolphin said the deal still fell short: “The gap was biggest for doctors and needed the biggest amount of restoration, and that’s what we got.”

He defended the BMA’s use of the Retail Price Index (RPI), a metric rejected by the Office for National Statistics, saying it “better reflects the costs people face”.

Should resident doctors get a pay rise? Have your say in the poll at the bottom of this story.

‘Who do you think is treating the patients?’

With Chancellor Rachel Reeves preparing her budget amid warnings of deep cuts, Dr Dolphin said the BMA is not demanding an immediate cash injection.

“We’re quite happy for that money to be deferred with some kind of multi-year pay deal so that we can end the dispute and avoid having further industrial action about pay for several years to come,” he said.

“Money spent in the NHS is returned to the economy. For every pound you spend, you get several pounds back.”

When pressed on whether the £1.7bn cost of previous strike action could have been better spent on treatment and technology for NHS cancer patients, he hit back: “Who do you think is treating the cancer patients? It’s the doctors.”

Strikes will cause disruption, union boss admits

Dr Dolphin rejected suggestions that the dispute could destabilise the government, calling the idea “implausible”.

He admitted prolonged strikes have tested public patience, but said the government had left doctors with no choice.

“A prolonged industrial dispute makes people annoyed with both sides,” he said. “It is vexing to us that we are still in this dispute.”

“I don’t want patients to suffer,” he added. “I accept that the strikes cause disruption… of course that’s upsetting for them. I completely get that. And I’m sorry that it’s happening.”

Business

Anglesey chosen as site for UK’s first small nuclear power station

Published

1 hour ago

November 13, 2025

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Anglesey chosen as site for UK's first small nuclear power station

Wylfa, on Anglesey, also known as Ynys Mon, has been chosen as the site for the UK’s first small modular reactor nuclear power station, the UK government has confirmed.

Officials estimate the site in north Wales will support hundreds of full-time jobs, as well as 3,000 jobs in the local economy at the height of construction.

Work on the site is due to commence in 2026 with an initial programme involving three reactors. The location has the capacity to accommodate as many as eight small modular power stations in the longer term.

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Sky News understands ministers weighed up Oldbury in Gloucestershire as a possible site before ultimately deciding on Anglesey.

The project will be run by the publicly owned company Great British Energy-Nuclear and is supported by a UK government investment of £2.5bn.

Rolls-Royce SMR is set to design the UK’s first small modular nuclear reactors (SMRs), pending final contracts, which are expected to be signed later this year.

Prime Minister Sir Keir Starmer said: “Britain was once a world-leader in nuclear power, but years of neglect and inertia has meant places like Anglesey have been let down and left behind.”

He added: “We’re using all the tools in our armoury – cutting red tape, changing planning laws, and backing growth – to deliver the country’s first SMR in North Wales.”

The site is projected to supply electricity for three million homes – more than twice the number of homes in Wales. It is hoped the Wylfa reactors will start supplying power to the grid from the mid-2030s.

Eluned Morgan, the first minister of Wales, said: “This is the moment Ynys Mon and the whole of Wales has been waiting for.”

She added: “New nuclear is a step into the future, with secure jobs and secure energy guaranteed for the next generation. We have been pressing the case at every opportunity for Wylfa’s incredible benefits as a site, and I warmly welcome this major decision to invest in northwest Wales. Wales is once again leading the way.”

Small modular reactors are compact nuclear power stations, built as prefabricated units for on‑site installation, with the aim of being constructed more quickly than sites like Hinkley Point C.

Nuclear power is not new to the Welsh island. A station was first constructed in the 1960s and began generating electricity in 1971. The two reactors operated for decades before being shut down. Reactor 2 was decommissioned in 2012, followed by Reactor 1 in 2015.

Efforts to revive nuclear generation at the site have also been made before. In 2021, proposals to build a new plant were abandoned under the previous UK government.

Rhun ap Iorwerth, Plaid Cymru leader and MS for Ynys Mon, welcomed the investment, but aired caution over previous false hope.

He said: “Today’s announcement is significant for people on Ynys Mon and across Wales. It reflects years of hard work by both the Plaid Cymru-led Anglesey County Council and Llinos Medi – both as the current MP and former council leader.

“Since I was elected over 12 years ago, the future of the Wylfa site has remained a live issue on Ynys Mon. Whilst we’ve learnt from past experience that we need assurances now that this plan will actually be delivered, there’s no doubt that there’s a real opportunity here that we have to take advantage of.”

He added that his priority is “to ensure that the voices and interests of communities on Ynys Mon are represented at every step”, and that he has “always taken the view that we must make the most of the economic growth and job opportunities for young people that come with a new development at Wylfa”, while mitigating “the challenges” that such projects bring.

“The Welsh government also has a crucial role to play in these discussions. I want to make sure that Welsh government has real input, with Welsh interests placed at the heart of the development,” he concluded.