The governor of the Bank of England has told Sky News he expects the next interest rate move to be a cut.
Andrew Bailey was speaking shortly after the Bank forecast that inflation could ease to its 2% target within a few months.
However, it opted to hold borrowing costs at 5.25% for the fourth time in a row at its latest meeting.
One member of the Bank‘srate-setting Monetary Policy Committee (MPC) voted for a cut in its base-level interest rate for the first time since the pandemic.
Britain’s central bank signalled that it was now edging closer to reducing the rate, as it dropped language about the potential need for further hikes from the minutes of its meeting and did not push back against widespread expectations that it will begin cutting later this year.
That was despite continued caution over the outlook for the pace of price increases.
In response to the question how long interest rates should be at this level, Mr Bailey responded: “The decision, unless the world changes, and of course unfortunately the world does change and particularly at the moment, the next decision is more likely to be when do we cut.”
He added: “We haven’t reached a view on when that will be.”
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In a further sign that it is beginning to consider lowering the rate, the nine-member committee was split three ways, with one member, Swati Dhingra, voting for a cut, two members voting for higher rates and the remaining six members favouring a hold.
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8:22
Sky News speaks to BoE governor
It is the first time since March 2020 that a member has voted for lower rates, and the first time since March 2008 that the committee was split three ways over whether to raise, lower or hold.
Investors currently anticipate that the Bank will begin cutting rates in the middle of the year, reducing them to just over 3% by 2026.
The Bank’s forecasts did little to dissuade them that these cuts are coming, though Mr Bailey said the moment had not yet come.
He pointed to the fact that while the consumer price index measure of annual inflation is set to drop to 2% in April, it will later bounce back, mostly due to energy costs.
He said: “Today we’ve decided to hold interest rates at 5.25%. We have had good news on inflation over the past few months. It has fallen a long way, from 10% a year ago to 4%.
“But we need to see more evidence that inflation is set to fall all the way to the 2% target, and stay there, before we can lower interest rates.”
The Bank upgraded its forecasts for gross domestic product (GDP) growth in the coming years, projecting annual growth rates of 0.5% by early next year (compared with a previous forecast of zero growth), 0.8% by early 2026 (compared with 0.6%) and 1.5% by early 2027.
However, it said that it expected only zero GDP growth in the final quarter of last year – implying (since the previous quarter was a contraction) that there is a near 50:50 chance of the UK facing a technical recession.
The Bank’s economists reckon that around two-thirds of the impact of higher interest rates has now fed through to the wider economy, but more than two million households are still due to see their mortgagesrefix to higher rates in the coming months.
A suspect detained after a car struck pedestrians at a Liverpool FC trophy parade was arrested on suspicion of attempted murder, dangerous driving and driving while unfit through drugs, Merseyside Police have said.
The 53-year-old is described as white British and from the West Derby area of Liverpool.
Police say 11 people are still being treated in hospital and are recovering well. A total of 65 people were injured, they said.
At a press briefing this afternoon, assistant chief constable Jenny Sims said the car followed an ambulance after a road block on Water Street was lifted so paramedics could help a man who had a suspected heart attack.
The car entered the road from Rumford Street, Merseyside Police said.
Detectives have said the incident is not being treated as terror-related, and no further suspects are being sought.
“There was no intelligence to suggest an incident of this nature would take place,” Ms Sims said.
She also defended the policing operation during the parade, saying the force planned for “all contingencies”.
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0:57
‘From jubilation to sirens’
Her comment came after the city’s metro mayor Steve Rotheram said questions about how the car was able to enter the road were “legitimate”.
The arrested man remains in custody and is being interviewed by officers, police said.
Image: Pic: PA
Image: Forensic officers at the scene today. Pic: PA
Merseyside Police is receiving help from neighbouring forces “due to the number of victims”, detective chief superintendent Karen Jaundrill added.
She continued: “Extensive CCTV inquiries are being carried out across the city to establish the movements of the car, a Ford Galaxy, before the incident took place.
“We have already had an incredible response from many of those who were there last night.”
Jack Trotter and his girlfriend Abbie Gallagher had just met some other Liverpool fans and were taking videos, when the Ford Galaxy quickly approached.
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“I look around and there’s people in the air,” she said. “I just freaked out. I was just trying to find Jack.
“Luckily enough, he heard me screaming. He came up and said, ‘I’m here’. We didn’t know what to say, we were just crying.”
Royals ‘saddened’ by events
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Princess Anne visits Liverpool after parade crash
Messages of support have been sent to the people of Liverpool since the incident, with the Prince and Princess of Wales saying they were “deeply saddened” by the events.
“What should have been a joyful celebration ended with tragedy,” they added.
Meanwhile, the King, who is currently taking part in a tour of Canada, said: “I know that the strength of community spirit for which your city is renowned will be a comfort and support to those in need.”
The King and other members of the Royal Family have said they are “deeply saddened” after a number of people were struck by a car during Liverpool FC’s title parade.
The head of state, who is currently on a two-day visit in Canada with his wife, said: “It is truly devastating to see that what should have been a joyous celebration for so many could end in such distressing circumstances.
“At this heartbreaking time for the people of Liverpool, I know that the strength of community spirit for which your city is renowned will be a comfort and support to those in need.”
Image: Police and other emergency personnel at the scene of the incident in Liverpool. Pic: AP
The Prince and Princess of Wales have also issued a statement, saying they were “deeply saddened” by what happened in Liverpool.
William, who is patron of the Football Association, and his wife Kate said in a message shared by Kensington Palace on social media: “What should have been a joyful celebration ended with tragedy.
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“Our thoughts are with those who were injured and to the first responders and emergency services on the ground.”
Image: The Princess Royal thanked hospital staff. Pic: PA
Divisional medical director for surgery at Aintree University Hospital, Marc Lucky, told Princess Anne that medics were “very, very fortunate” that there were not more major injuries.
Consultant Jay Rathore added: “Most of the injuries were limb injuries. No life-threatening, we were able to manage them.”
The princess was already due to be in Liverpool on Tuesday to visit the MS Queen Anne after it arrived on Monday for Cunard’s 185th anniversary celebrations.
Image: The King and Queen are currently on a trip to Canada. Pic: PA
She expanded her itinerary to also meet nurses, consultants, and paramedics, as well as representatives from Merseyside Fire and Rescue Service and the football club, in light of Monday night’s incident.
“We really appreciate you still coming, because it will mean a lot to the people of the city,” Liverpool City Council leader Liam Robinson said as he thanked the princess for her visit.
A Buckingham Palace spokesman said: “The princess would like to share her heartfelt condolences and support for the families and communities affected.
“Her Royal Highness also wishes to acknowledge the courage of the emergency services, some of whom she met today, and all those providing care and comfort during this difficult time.”
King Charles says Canada will remain “strong and free” – in a speech viewed by many Canadians as a show of support for the country’s sovereignty following annexation threats by Donald Trump.
It comes after Mr Trump repeatedly suggested that Canada should become America’s 51st state.
Prime Minister Mark Carney later invited Charles, who is the head of state in Canada, to the state opening of parliament.
On Tuesday, Charles said in a speech, written by Mr Carney’s government to open Canada’s parliament, that the country would remain “strong and free”, quoting the national anthem, but did not directly refer to Mr Trump’s annexation threats.
“We must face reality: since the Second World War, our world has never been more dangerous and unstable. Canada is facing challenges that, in our lifetimes, are unprecedented,” the King told politicians in the Senate Building in Ottawa in French.
“Many Canadians are feeling anxious and worried about the drastically changing world around them,” he added.
Image: Mark Carney applauded the King. Pic: PA
Image: King Charles spoke with former Canadian PM Justin Trudeau. Pic: PA
In the speech, he highlighted his admiration for “Canada’s unique identity, which is recognised across the world for bravery and sacrifice in defence of national values”.
He set out the government’s legislative agenda on the second day of his Canada visit, an honour usually reserved for the governor general.
King Charles is only the second monarch, after his mother Queen Elizabeth II, to do so. The late queen delivered the speech at the state opening of the Canadian parliament in 1957, her first visit to the country as head of state, and again in 1977.
Image: King Charles and Queen Camilla were riding in a horse-drawn landau. Pic: Reuters
Image: King Charles III and Queen Camilla are pictured ahead of the opening of parliament. Pic: PA
Image: Charles and Camilla laid a wreath at the national war memorial in Ottawa. Pic: PA
He said that it has been nearly 70 years since his mother first opened the Canadian parliament, and at the time, World War II remained a painful memory while the Cold War was intensifying simultaneously.
“Freedom and democracy were under threat,” the King said.
“Today, Canada faces another critical moment. Democracy, pluralism, the rule of law, self-determination, and freedom are values which Canadians hold dear, and ones which the government is determined to protect.”
‘So much more than a royal visit’
This trip was so much more than a royal visit, it was all about cementing Canada’s sovereignty.
And what we’ve seen is two short days, poignantly packed with spectacle and symbolism.
From an open-top carriage procession to a theatrical political ceremony – Canada wanted to put on a visual show of sovereignty, and this was a masterclass.
All the stops were pulled out.
The King must sit above politics, but this was a very political visit. He is King of Canada and head of state here.
But he arrives at a time of fractious relations between Canada and the US.
Putting him at the centre of Canada’s parliament sends a strong signal to President Trump.
During the speech, the King added his own warm words, speaking with deep affection about the country. He also spoke of how the crown brings Canada “unity” and represents “stability and continuity”.
And then, reading the words of his government, a punchy message to President Trump. Delivered by the King, the words hit home harder.
When he quoted the national anthem with the words Canada must stay “strong and free”, the applause rose up.
At a time when Canada feels threatened by the US, having the King on side matters.
The King has been walking a delicate diplomatic tightrope in Ottawa. Here to celebrate Canada, without causing offence to politicians south of the border.
President Trump can be unpredictable, but he affectionately holds the King and Royal Family in high regard, and that goes a long way.
The King heads home after just twenty-three hours.
Canada has been visibly boosted – the bond with its King has been renewed and strategically strengthened.
He added that since Queen Elizabeth II’s first Canadian parliament opening, the country “has dramatically changed: repatriating its constitution, achieving full independence, and witnessing immense growth”.
Addressing the protection of Canada’s sovereignty, Charles read out a promise by the Canadian government that it would rebuild, rearm and reinvest in its armed forces.
“It will invest to strengthen its presence in the north, as this region, which is an integral part of the Canadian nation, faces new threats,” he read.
Image: King Charles and Queen Camilla were led by procession to open the first session of parliament in Canada
Image: Royal Canadian Mounted Police (RCMP) officers on horseback rode towards the senate building. Pic: Reuters
Image: King Charles and Queen Camilla visited the Senate. Pic: Reuters
The speech, which was awarded a standing ovation by attendees, was largely written by officials working for Mr Carney’s government, with Charles adding his own comments about his love for Canada.
The King opening Canada’s parliament is a “clear message of sovereignty” and “not coincidental”, Mr Carney previously said.
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King’s Canada visit: Why is it important?
Image: King Charles and Mark Carney during the event
He also revealed that Canadians “weren’t impressed” by the decision of the UK government to offer Mr Trump an unprecedented second state visit to the UK.