The Bank of England may have lifted interest rates by less than a lot of people had been expecting up until recently – up by a quarter percentage point rather than a half – but for those with mortgages, the most striking thing from the trove of analysis they’ve published today isn’t about today but about tomorrow.
Because there are heavy hints dropped throughout the Bank’s Monetary Policy Report that it expects borrowing costs to stay high for a lot longer than many had anticipated.
Only a few months ago financial markets were betting that the Bank Rate – the official borrowing level set at Threadneedle Street – would be down to 4% by 2024 and 3.7% by 2025. Far higher than the post-financial crisis period but a fall all the same.
Now, those same markets think rates will still be at 5.9% in 2024 and at 5% by 2025. And rather than challenging those assumptions, the Bank has come as close as possible to reinforcing them.
This institution doesn’t provide explicit guidance about where it’s expecting interest rates to go; it prefers to drop hints. And the hint in the minutes alongside the decision today was about as heavy as you could get.
“The [Monetary Policy Committee] would ensure that Bank Rate was sufficiently restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term, in line with its remit.”
Higher for longer, in other words.
Why? Another clue is to be found elsewhere in the Bank’s forecasts today. It’s worth quoting at length: “Sharp increases in energy food and other import prices over the past two years have had second-round effects on domestic prices and wages.
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“These second-round effects are likely to take longer to unwind than they did to emerge and the Monetary Policy Committee has placed weight in its recent forecasts on the risk that they might persist for longer.
“The committee now judges that some of this risk may have begun to crystallise.”
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‘Interest rates are not going down anytime soon’
It fears, in other words, that the inflation cat is now out of the bag. And thus getting price rises to come down may involve considerably more work on its part than it previously anticipated. Higher for longer.
Which of course means pain for many households – especially those with mortgages and those renting (most landlords also have mortgages).
And unlike previous eras where most households were on floating rate mortgages and thus that pain was very quickly felt in their pockets, today that pain is being drip fed into the economy as two and five year fixed-rate mortgages gradually expire and are replaced with far more expensive monthly payments.
Again, that means the impact of these interest rate increases is going to be a long, drawn-out affair. And you can see the implications in the Bank’s economic forecast. The economy isn’t likely to face a recession, at least according to its central projection.
But it will essentially flatline – depressed by these higher rates – for three years, not showing meaningful growth until 2026.
It is a depressing prospect. Perhaps the best thing to hope for is that the Bank is wrong. This has happened before – indeed it’s already submitting to an independent inquiry into how it failed to foresee the recent spike in inflation, led by former Federal Reserve chairman Ben Bernanke.
It’s not altogether implausible that they fail to foresee a more meaningful economic recovery.
Ozzy Osbourne has taken his final tour of Birmingham – with his family experiencing the love of thousands of fans who turned out to see the heavy metal star come home.
“We love you, Ozzy!” came the shouts from the crowd as his cortege stopped at Black Sabbath Bridge in the city, a site that has become a shrine to the performer since his death at 76 last week.
His family and loved ones, including his wife Sharon Osbourne and their children Jack, Kelly and Aimee, spent several minutes taking in all the flowers, messages and other tributes left in an outpouring of love from fans.
Image: Jack, Sharon and Kelly Osbourne laid flowers. Pic: PA
Sharon was in tears as she took it all in. Supported by her children, she gave a peace sign to the crowd before returning to the procession vehicles.
Each family member carried a pink rose, wrapped in black paper, tied with a purple ribbon – the traditional Black Sabbath colours. The flowers bearing his name in the hearse were also purple.
Before reaching the city centre, the cortege had travelled past Ozzy’s childhood home in Aston. Just a few weeks ago, he was on stage at Villa Park performing his final gig alongside many of the musicians his music had inspired, from Metallica to Guns N’ Roses to Yungblud.
Image: Tributes to Ozzy can be seen all over Birmingham. Pic: Reuters
On a hugely emotional day, his presence could be felt throughout the city, with the star’s music playing in pubs and posters paying tribute: “Birmingham will always love you.”
For fans, this was a chance to say not just goodbye, but also thank you to a star who never forgot where he came from. His remarkable achievements from humble beginnings and continued love for his hometown, even when he lived thousands of miles away in Los Angeles, meant that for many, the loss feels incredibly personal.
Image: The Black Sabbath Bridge has become a shrine in recent days. Pic: Reuters
‘The Prince of Laughter – not Darkness’
Graham Wright, a roadie who worked with Black Sabbath in the 1970s and beyond, up to the Back To The Beginning reunion gig at Villa Park, told Sky News he would remember Ozzy not by his traditional nickname, the Prince of Darkness – but as the Prince of Laughter instead.
“It was a shock he left us so soon after [the show],” he said. “The show was tough for him but he was determined to say goodbye to his fans, that was the main thing. It was important for all four of [Black Sabbath] to get back together and do a farewell.
“The tears will be flowing today to see the Ozz man – the Prince of Laughter, not Darkness. He really was. We’ll all miss him.”
Image: Pic: Reuters
‘My mum used to say he was a lovely boy’
Chris Mason, general manager of The Brasshouse pub, which is next to Black Sabbath Bridge, said music by the band and Ozzy’s solo material had been played pretty much “on loop” since his death.
“I’m a metal fan and Ozzy being the godfather of the scene – if not for Ozzy and Black Sabbath, we wouldn’t have heavy metal,” he said. “This is what Birmingham is about, bringing people together, and Ozzy and Black Sabbath did that.
“He was Mr Birmingham and his family have brought him back.”
Mohabbat Ali, who used to live on the same street as Ozzy’s childhood home, said the property had become one of the focal points for tributes in the city.
Describing what it was like living near him, he said: “He played guitars, very loud at night sometimes, but my mum used to say he was a lovely boy.”
From an era of preening rock gods, Ozzy was the real deal
The sea of black was always a given – but this wasn’t about respecting funeral traditions. Ozzy himself had previously said he wanted his send-off, when it came, to be a celebration and not a “mope-fest”.
This was his final tour in the city that meant so much to him.
For fans, he meant so much to them.
For his family, the emotion was raw.
Sharon, his soulmate, has spent her life and career organising his shows, and it was clear how hard this day was for her.
After they left, fans flooded the streets to lay flowers.
Not since David Bowie has an artist’s death prompted such an outpouring of emotion. From an era of preening rock gods, Ozzy was the real deal – one of the most notorious figures in rock, but a man who remained as Brummie as can be.
‘A true legend who never forgot his roots’
Birmingham’s lord mayor, Councillor Zafar Iqbal, also attended the procession and spoke of the city’s pride in Ozzy.
“What a great honour for us to have him here one last time,” he said. “The love for Ozzy – well, you can feel it in the air.”
The star put both Aston and Birmingham on the map, he said, and always took the time to get to know people.
Mr Iqbal said Ozzy sent him a letter after reading on the mayor’s website biography how he had struggled with dyslexia at school – something the star identified with.
“I’ve got the letter in a frame and it’s in my office… he was just a natural human being, down to earth. You wouldn’t have known he was a rock star – but he was a true legend, who never forgot his roots.”
The population of England and Wales has grown by more than 700,000 in the year to June 2024 – the second-largest increase in over 75 years.
The change was largely fuelled by international migration, with natural change – the difference between births and deaths – accounting for only a small proportion.
According to the Office for National Statistics, there were an estimated 61.8 million people in England and Wales in mid-2024, up from 61.1 million the year before.
It is the second-largest numerical jump since at least 1949, when comparable data began.
And it is behind only the rise of 821,210 that took place in the preceding 12 months from mid-2022 to mid-2023.
Nigel Henretty of the ONS said the population of the two countries has increased each year since mid-1982, but said the rate of population increases has been higher in recent years.
“Net international migration continues to be the main driver of this growth, continuing the long-term trend seen since the turn of the century,” he said.
Net international migration – the difference between people moving to the country and leaving – accounted for 690,147 of the estimated population increase of 706,881 people, or 98% of the total.
There were slightly more births than deaths in the most recent year, which added 29,982 to the population.
There was also a net decrease in internal migration – the number of people moving from England and Wales to elsewhere in the UK.