The Bank of England is preparing the ground for lower interest rates

Published

2 years ago

March 21, 2024

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For some reason which no-one can quite remember, when economists talk about interest rates they invariably find themselves referring to species of birds.

They call those who are broadly in favour of lower interest rates “doves”. Those who are keen on higher borrowing costs are “hawks”.

Analysts in the City of London draw up diagrams of the nine members of the Bank’s Monetary Policy Committee, denoting how many of which bird there are at each meeting.

Money latest: Reaction to Bank of England’s interest rate decision

Those who invariably lean towards higher rates are perma-hawks or uber-hawks and those on the other side are perma-doves; an announcement which surprises in one direction is “dovish” or “hawkish” and so on and so forth.

At the last meeting there were two hawks on the committee (Catherine Mann and Jonathan Haskel, who both voted for an increase in rates), and one dove (Swati Dhingra, who voted for a cut). Two hawks versus one dove. The rest of the committee voted to leave rates on hold and that was that.

This time around the hawks fled the tower (if that is the appropriate terminology), with both Mann and Haskel voting not to increase rates but to leave them on hold. That leaves one dove.

In other words, in the Kremlinology of interest rates, all of a sudden an interest rate cut is looking that bit closer. Right now markets reckon it could come as soon as June, and some economists think there’s an outside chance of it arriving in May. It’s just a question of how quickly the neutrals turn dovish.

The pound fell slightly after news of the vote (8-1 in favour of holding interest rates at 5.25%).

And all of this silliness about birds belies a more straightforward, less avian, story. Inflation – the main thing the Bank is targeting – is dropping.

This doesn’t mean, as you’ll already know, that prices themselves are falling; they remain stubbornly higher than they were a few years ago. However they are at least rising less quickly, and that is what the Bank cares about.

Come April, inflation could even be down to the Bank’s 2% target.

Other central banks around the world are also poised (the Federal Reserve and European Central Bank) to cut rates and some (the Swiss National Bank) have already done so. And like many birds, the Bank of England tends to move with the rest of the monetary flock.

All of which is to say, it might have looked as if nothing happened today. And in one sense that’s true. Like a swan gliding across the water, the Bank seems on the surface to be doing very little.

But beneath the surface the legs are kicking, manoeuvring and preparing the ground for lower interest rates. And that’s quite enough bird analogies for one day.

Business

Elon Musk’s $1trn pay package approved by Tesla

Published

7 hours ago

November 7, 2025

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Elon Musk's trn pay package approved by Tesla

Elon Musk could be on track for a $1trn (£761bn) pay package – if Tesla meets a series of extremely ambitious targets over the next 10 years.

The world’s richest man has the potential to become a trillionaire after the controversial plans were approved by 75% of the company’s shareholders.

It would be the largest corporate pay package in history.

However, it won’t be easy. As part of the agreement, Musk will need to deliver 20 million Tesla vehicles over the next decade – more than double the number churned out over the past 12 years.

He will be tasked with dramatically increasing the company’s valuation and operating profits.

Another requirement is for Tesla to roll out one million AI-powered robots – despite the fact it hasn’t released a single one so far.

Musk will also need to come up with a succession plan on who will replace him as the chief executive of Tesla.

As each step is successfully completed, he will receive more company shares and his ownership stake will rise – potentially from 13% now to almost 29%.

And even if Musk falls short of some of these targets, he could end up earning a lot of money.

Figures from Forbes magazine suggest the 54-year-old already has a net worth of $493bn (£375bn) – and while that means he has more money than anyone else on the planet, he isn’t the richest person in history… yet.

That title belongs to John D Rockefeller, the railroad titan who had a wealth of $630bn (£480bn) back in 1913 – when adjusted for inflation.

Why?

Now is the moment Tesla wants to innovate, develop into robotics, self-driving and embrace the growth of artificial intelligence (AI).

It’s seeking a visionary leader to spearhead this move. And a lot of Tesla’s market value is tied up in this ambition.

Tesla’s board of directors, who oversee the management of the business, are adamant that only Musk can make the lofty ambitions a reality.

Some believe there’s no one else like Musk.

More shares in the company are “critical to keep Musk at the helm to lead Tesla through the most critical time in the company’s history”, said financial services firm Wedbush.

“We believe this was the smart move by the board to lay out these incentives/pay package at this key time as the biggest asset for Tesla is Musk … and with the AI revolution, this is a crucial time for Tesla ahead with autonomous and robotics front and centre.”

Opposition

Not everyone is in favour of the pay package.

Major investor advice firm Institutional Shareholder Services (ISS) warned the 10-year pay agreement reduces the board’s ability “to meaningfully adjust future pay levels in the event of unforeseen events or changes in either the performance or strategic focus of the company over the next decade”.

In a note, ISS said: “The high value of each tranche could also potentially undermine Musk’s desire to achieve all goals and create significant value for shareholders”, and that the goals “lack precision”.

Musk has described ISS and another major adviser, Glass Lewis, as “corporate terrorists”.

There was speculation he would walk away from the business if the package was not agreed on.

Business

ITV in ‘preliminary’ talks over £1.6bn sale of media and entertainment arm to Sky

Published

9 hours ago

November 7, 2025

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ITV has revealed talks with Sky, the owner of Sky News, over the possible sale of its media and entertainment (M&E) division in a deal worth £1.6bn.

Sky News understands the approach centres on the potential creation of a UK-focused streaming giant.

The division takes in ITV’s current broadcast operations and channels, which are largely dependent on advertising revenue.

The talks do not include the company’s studios arm, which makes shows such as I’m A Celebrity… Get Me Out Of Here!

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“There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place”, a statement by ITV to the London Stock Exchange said.

“A further announcement will be made in due course if appropriate”, it concluded.

ITV shares jumped by 15% in early trading in response to the statement.

Sky, which is wholly owned by the US media and entertainment firm Comcast, declined to comment.

ITV released its statement after news of the discussions were first revealed by Bloomberg News.

Just hours earlier, the company’s latest financial results showed it was moving to save millions of pounds due to an advertising slowdown.

ITV reported delays to some programmes over the coming months to save costs as a result.

It predicted a 9% decline in ad revenues across 2025, with the most recent trends being blamed on advertisers pulling back on spending in anticipation of the chancellor’s budget later this month.

It is understood that a possible deal between Sky and ITV would seek to create a larger, more attractive proposition for advertisers in the UK streaming sphere through a focus on UK audiences.

ITV has long been the subject of takeover speculation.

The latest came from the Reuters news agency earlier this year when it reported early-stage talks with Abu Dhabi-backed group RedBird IMI about a possible merger of their respective production businesses.

French media group Banijay was also reported to have held discussions about a possible offer for ITV’s studio business or a full takeover.

Business

Elon Musk’s $1 trillion pay package approved by Tesla

Published

16 hours ago

November 7, 2025

admin

Elon Musk could be on track for a $1trn (£761bn) pay package – if Tesla meets a series of extremely ambitious targets over the next 10 years.

The world’s richest man has the potential to become a trillionaire after the controversial plans were approved by shareholders.

However, it won’t be easy. As part of the agreement, Musk will need to deliver 20 million Tesla vehicles over the next decade – more than double the number churned out over the past 12 years.

He will be tasked with dramatically increasing the company’s valuation and operating profits.

Another requirement is for Tesla to roll out one million AI-powered robots – despite the fact it hasn’t released a single one so far.

Musk will also need to come up with a succession plan on who will replace him as the chief executive of Tesla.

As each step is successfully completed, he will receive more company shares and his ownership stake will rise – potentially from 13% now to almost 29%.

And even if Musk falls short of some of these targets, he could end up earning a lot of money.

That title belongs to John D. Rockefeller, the railroad titan who had wealth of $630bn (£480bn) back in 1913 – when adjusted for inflation.

Why?

Now is the moment Tesla wants to innovate, develop into robotics, self-driving and embrace the growth of artificial intelligence (AI).

It’s seeking a visionary leader to spearhead this move. And a lot of Tesla’s market value is tied up in this ambition.

Tesla’s board of directors, who oversee the management of the business, are adamant that only Musk can make the lofty ambitions a reality.

Some believe there’s no one else like Musk.

More shares in the company are “critical to keep Musk at the helm to lead Tesla through the most critical time in the company’s history”, said financial services firm Wedbush.

“Getting Musk’s pay package approved will be a big step towards advancing Tesla’s future goals,” Wedbush analysts wrote.

Opposition

Not everyone is in favour of the pay package.

Mr Musk has described ISS and another major adviser, Glass Lewis, as “corporate terrorists”.

There was speculation he would walk away from the business if the package was not agreed on.