Bank of England increases interest rate for 14th time in a row to 5.25%

Published

2 years ago

August 3, 2023

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The Bank of England has raised interest rates for the fourteenth successive time, lifting its official rate to 5.25%.

The quarter percentage point increase was somewhat smaller than some economists had expected, following the release of lower-than-anticipated inflation data last month.

“Inflation is falling and that’s good news,” said the Bank’s governor Andrew Bailey.

“We know that inflation hits the least well off hardest and we need to make absolutely sure that it falls all the way back to the 2% target. That’s why we’ve raised rates to 5.25% today.”

However, while the Bank’s forecasts do not imply a recession in the coming years, they paint the picture of an economy which is both weaker than previously forecast and effectively flatlining all the way through to 2026.

This is, said the Bank, in large part because of the fact that interest rates are expected to remain at high levels for considerably longer than markets previously anticipated.

While the Bank itself doesn’t deliver its own interest rate forecasts, it dropped a heavy hint that it does expect borrowing costs to stay high for some time, saying in the minutes to its policy meeting that: “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.”

The nine-person MPC was split on today’s decision, with two members (Catherine Mann and Jonathan Haskel) voting for a bigger increase and one member (Swati Dhingra) voting to keep rates on hold.

However, economists and financial markets are betting on further increases, with markets pricing in a peak of 5.75% or slightly higher.

The Bank’s forecasts indicate that the prime minister is likely to meet his pledge to halve inflation by the end of the year, pointing towards a rate of around 4.9% in the final quarter (the government’s pledge implies a rate of 5.4%).

However, considerably uncertainty remains, with around a 20% chance of a higher figure.

While the Bank’s forecast for gross domestic product (GDP) growth in the year to the third quarter is slightly higher than before (0.8% rather than the 0.6% it forecast in May), it is still far weaker than what would be considered “trend growth”.

Moreover, the GDP forecast for the same period in 2024 was also cut from 0.6% to 0.3%, as was the relevant forecast in 2025 (from 0.8% to 0.3%). All told, they add up to a long period of insipid economic growth.

Chancellor Jeremy Hunt said, “If we stick to the plan, the Bank forecasts inflation will be below 3% in a year’s time without the economy falling into a recession.

“But that doesn’t mean it’s easy for families facing higher mortgage bills so we will continue to do what we can to help households.”

Labour’s shadow chancellor Rachel Reeves said: “This will be incredibly worrying for households across the country.”

“Responsibility for this crisis lies with the Tories. They’ve crashed our economy leaving working people worse off.

“Labour’s plans will boost growth and get bills down.”

UK

Zack Polanski and Nigel Farage are polar opposites in politics, but have one thing in common

Published

7 hours ago

October 23, 2025

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Zack Polanski and Nigel Farage are polar opposites in politics, but have one thing in common

Zack Polanski and Nigel Farage might be polar opposites when it comes to politics – but they do have one thing in common.

The pair are both cutting through in a changing media landscape when attention is scarce and trust in mainstream politics is scarcer still.

For Farage, the Reform UK leader, momentum has been building since he won a seat at the general election last year and he continues to top the polls.

But in the six weeks since Polanski became leader of the Greens, membership has doubled, they’ve polled higher than ever before while three Labour councillors have defected. Has the insurgent firebrand finally met his match?

“I’m sure I don’t need to say this, but I despise Nigel Farage’s politics and disagree with him on almost everything,” Polanski tells Sky News.

“But I think his storytelling has undoubtedly cut through and so yes there has been a huge part of us saying ‘If Farage can do that with a politics of hate and division, then it’s time for the Green Party to do that with a politics of hope and community’ and that’s absolutely what I intend to keep doing.”

Polanski was speaking after a news conference to announce the defections of the councillors in Swindon – a bellwether area that is currently led by a Labour council and has two Labour MPs, but was previously controlled by the Tories.

It is the sort of story the party would previously have announced in a press release, but the self-described “eco populist” is determined to do things differently to grab attention.

He has done media interviews daily over the past few weeks, launched his own podcast and turbocharged the Greens social media content – producing slick viral videos such as his visit to Handsworth (the Birmingham neighbourhood where Robert Jenrick claimed he saw no white people).

Polanski insists that it is not increased exposure in and of itself that is attracting people to his party but his messaging – he wants to “make hope normal again”.

“I’m not going to be in a wetsuit or be parachuting from a helicopter”, he says in a swipe at Lib Dem leader Ed Davey.

“I think you only need to do stunts if you don’t have something really clear to say and then you need to grab attention.

“I think when you look at the challenges facing this country right now if you talk about taxing wealth and not work, if you talk about the mass inequality in our society and you talk about your solidarity with people living in poverty, with working-class communities, I think these are the things that people both want to hear, but also they want to know our solutions. The good news is I’ve got loads of solutions and the party has loads of solutions. “

Some of those solutions have come under criticism – Reform UK have attacked his policy to legalise drugs and abolish private landlords.

Polanski is confident he can win the fight. He says it helps that he talks “quite quickly because it means that I’m able to be bold but also have nuance”. And he is a London Assembly member not an MP, so he has time to be the party’s cheerleader rather than being bogged down with case work.

As for what’s next, the 42-year-old has alluded to conversations with Labour MPs about defections. He has not revealed who they are but today gave an idea of who he would welcome – naming Starmer critic Richard Burgon.

Like Burgon, Polanski believes Starmer “will be gone by May” and that the local elections for Labour “will be disastrous”.

He wants to replace Labour “right across England and Wales” when voters go to the polls, something Reform UK has also vowed to do.

Could the Greens be kingmakers?

Luke Tryl, director of More in Common, says this reflects a “new axis of competition” as frontline British politics shifts from a battle of left vs right to a battle of process vs anti-establishment.

Farage has been the beneficiary of this battle so far but Tryl says Polanski is “coming up in focus groups” in a way his predecessors didn’t. “He is cutting through”, the pollster says.

However, one big challenge Polanski faces is whether his rise will cause the left vote to fragment and make it easier for Farage to win – something he has said he wants to avoid at all costs.

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And yet, asked if he would form a coalition with Labour to keep Farage out of power in the event of a hung parliament, he suggested he would only do so if Sir Keir Starmer is no longer prime minister.

“I have issues with Keir Starmer as prime minister,” he says. “I think he had the trust of the public, but I would say that’s been broken over and over again. If we had a different Labour prime minister that would be a different conversation about where their values are.”

He adds: “I do think stopping Nigel Farage has to be a huge mission for any progressive in this country, but the biggest way we can stop Nigel Farage is by people joining the Green Party right now; creating a real alternative to this Labour government, where we say we don’t have to compromise on our values.

“If people wanted to vote for Nigel Farage, they’d vote for Nigel Farage. What does Keir Starmer think he’s doing by offering politics that are similar but watered down? That’s not going to appeal to anyone, and I think that’s why they’re sinking in the polls.”

UK

Paratrooper known as ‘Soldier F’ not guilty of Bloody Sunday murders

Published

8 hours ago

October 23, 2025

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Paratrooper known as 'Soldier F' not guilty of Bloody Sunday murders

A former paratrooper accused of murdering two civilians in the Bloody Sunday shootings in Northern Ireland 53 years ago has been found not guilty.

Soldier F – who cannot be identified for legal reasons – was accused of killing James Wray and William McKinney during disorder after a civil rights parade on 30 January 1972 in Londonderry, also known as Derry.

The veteran was also found not guilty of five attempted murders at Belfast Crown Court on Thursday.

He had denied all seven charges.

Thirteen people were shot dead by the Parachute Regiment on the day in question.

Soldier F did not give evidence, but the court heard about previous statements from two paratroopers – known as G and H – who were in Glenfada Park North along with F.

The prosecution said their testimony was direct evidence that the defendant had opened fire in the area.

However, the defence argued that they were unreliable witnesses as their statements were inconsistent with each other and with other witnesses who gave evidence.

The trial was held in Belfast in front of a judge, not a jury.

Delivering his judgment, Judge Patrick Lynch said the evidence presented against the veteran fell well short of what was needed for conviction.

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