UK
Rachel Reeves is celebrating the Bank of England’s interest cut – but behind the scenes she has little to cheer
The economy is stagnating and job losses are mounting. Now is the time to cut interest rates again.
That was the view of the Bank of England’s nine-member rate setting committee on Thursday.
Well, at least five of them.
The other four presented us with a different view: Inflation is above target and climbing – this is no time to cut interest rates.
Who is right? All of them and none of them.
Central bankers have been backed into a corner by the current economic climate and navigating a path out is challenging.
The difficulty in charting that route was on display as the Bank struggled to decide on the best course of monetary policy.
The committee had to take it to a re-vote for the first time in the Bank’s history.
Please use Chrome browser for a more accessible video player
Bank of England is ‘a bit muddled’
On one side, central bankers – including Andrew Bailey – were swayed by the data on the economy. Growth is “subdued”, they said, and job losses are mounting.
This should weigh on wage increases, which are already moderating, and in turn inflation.
One member, Alan Taylor, was so worried about the economy he initially suggested a larger half a percentage point cut.
On the other side, their colleagues were alarmed by inflation.
The Bank upgraded its inflation forecasts, with the headline index expected to hit 4% in September.
In a blow to the chancellor, the September figure is used to uprate a number of benefits and pensions. The Bank lifted it from a previous forecast of 3.75%.
In explaining the increase, the Bank blamed higher utility bills and food prices.
Food price inflation could hit 5.5% this year, an increase driven by poor harvests, some expensive packaging regulations as well as higher employment costs arising from the Autumn Budget.
Rachel Reeves on Thursday. Pic: PA
When pressed by Sky News on the main contributor to that increase – poor harvests or government policy – the governor said: “It’s about 50-50.”
The Bank doesn’t like to get political but nothing about this is flattering for the chancellor.
The Bank said food retailers, including supermarkets, were passing on higher national insurance and living wage costs – the ones announced in the Autumn Budget – to customers.
Economists at the Bank pointed out that food retailers employ a large proportion of low wage workers and are more vulnerable to the lowering of the national insurance threshold because they have a larger proportion of part-time workers.
The danger doesn’t end there.
Read more:
Who is worst hit by Trump’s new tariffs?
Chancellor doesn’t rule out rising gambling taxes
Of all the types of inflation, food price inflation is among the most dangerous.
Households spend 11% of their disposable income, meaning higher food price inflation can play an outsized role in our perception of how high overall inflation in the economy is.
When that happens, workers are more likely to push for pay rises, a dangerous loop that can lead to higher inflation.
So while the chancellor is publicly celebrating the Bank’s fifth interest rate cut in a year, behind the scenes she will have very little to cheer.
Remnants of Tropical Storm Dexter will bring an increase in temperatures over the weekend, with highs of 34C possible next week.
A heatwave could be registered in parts of the South early next week and could spread more widely if temperatures hold.
Temperatures of 28C (82F) are possible in the South on Sunday, reaching 30C (86F) across parts of England on Monday before getting closer to 34C (93F) on Tuesday.
Pic: Joe Giddens/PA
Warm and muggy nights are to be expected, especially in the South.
Conditions will be more unsettled in the North, with strong winds and rain at times.
People punting along the River Cam in Cambridge last month. Pic: PA
In its forecast the Met Office said Friday will be a brighter day for many, with sunny spells across southern and central areas and highs of 25-26C expected. Northern Scotland will be breezy with showery outbreaks of rain.
Saturday will also see sunny spells for much of England and Wales, but there will be some rain in northern areas, paritcularly northern Scotland.
People enjoying the hot weather on Sunny Sands beach in Folkestone last month. Pic: PA
A weather front moving in from the west will bring rain to Northern Ireland, parts of Scotland and possibly northern England by Sunday evening, while central and southern areas are expected to remain dry with sunny spells.
Temperatures will begin to rise in the South from Sunday evening, as the remnants of Tropical Storm Dexter “draws warm air up from the southwest across the UK”, the Met Office said.
Temperatures are expected to exceed 30C across parts of central, southern and eastern England on Monday and Tuesday, the forecaster added.
Read more from Sky News:
What could happen when Trump and Putin meet
Charity calls for clarity on commission’s probe into Prince Harry claims
“We’re confident that temperatures will increase markedly by the start of next week, reaching the low 30s Celsius in parts of England on Monday and perhaps the mid 30s in a few places on Tuesday,” said Met Office deputy chief meteorologist Steven Keates.
“However, the length of this warm spell is still uncertain, and it is possible that high temperatures could persist further into next week, particularly in the south.”
“Ex-Dexter sets the wheels in motion for an uptick in temperatures, but the weather patterns then maintaining any hot weather are rather more uncertain”.
The Omada Health logo is displayed on a smartphone screen.
Sopa Images | Lightrocket | Getty Images
Omada Health reported quarterly results for the first time since its IPO in June.
Here’s how the company did based on average analysts’ estimates compiled by LSEG:
- Loss: Loss per share of 24 cents.
- Revenue: $61 million vs. $55.2 million expected
The virtual care company’s revenue increased 49% in its second quarter from $41.21 million a year earlier. The company reported a net loss of $5.31 million, or a 24-cent loss per share, compared to a net loss of $10.69 million, or $1.40 loss per share, during the same period last year.
“We believe our Q2 performance reflects Omada’s ability to capture tailwinds in cardiometabolic care, to effectively commercialize our GLP-1 Care Track, and to leverage advances in artificial intelligence for the benefit of our members,” Omada CEO Sean Duffy said in a release.
For its full year, Omada expects to report revenue between $235 million to $241 million, while analysts were expecting $222 million. The company said it expects to report an adjusted EBITDA loss of $9 million to $5 million for the full year, while analysts polled by FactSet expected a wider loss of $20.2 million.
Omada, founded in 2012, offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem.
The stock opened at $23 in its debut on the Nasdaq in June. At market close on Thursday, shares closed at $19.46.
Omada said it finished its second quarter with 752,000 total members, up 52% year over year.
The company will discuss the results during its quarterly call with investors at 4:30 p.m. ET.
WATCH: Omada Health CEO Sean Duffy on IPO debut: Today is the right moment for us
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike