General Election 2024: Hopes for interest rate cut suffer further blow
The prospect of a pre-election interest rate cut by the Bank of England has been damaged by official figures showing no progress in bringing down the pace of wage growth.
Data from the Office for National Statistics (ONS) showed basic pay rising at an annual rate of 6% in the three months to April.
That was flat on the figure reported by the ONS for the past two months. Upwards pressure came from the government’s 9.8% rise in the National Living Wage, which took effect in April.
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When the impact of inflation was taken into account, the wage rate stood at its highest level since July 2021 at 2.9%.
The pay measure that includes bonuses actually rose to 5.9% from 5.7%, according to the ONS
While it is good news for voters as it leaves pay growth at way more than double the 2.3% inflation rate, it will not help persuade the Bank of England that the time is right for an interest rate cut when it reveals its latest decision on 20 June.
Rishi Sunak would be keen for the Bank, which is independent of the government, to impose a cut to borrowing costs on that date to bolster his case that the outlook for household and consumer finances is improving.
With the Conservatives far behind Labour in the polls, the employment figures from the ONS are the last before polling day on 4 July.
The data also showed a rise in the unemployment rate to 4.4% from 4.3%, though this figure comes with a big health warning from the ONS due to continuing reliability issues with its labour force survey.
The same caution was applied to the figure covering the number of people of working age judged to be economically inactive.
That stood at 9.4 million and was up on the previous month due to a rise in long term sickness and care demands.
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The ONS said: “This month’s figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong.”
What this all means for the Bank
The big picture is definitely mixed. The jobless rate figure in particular may have some influence in Threadneedle St as it signals further damage to the economy from higher interest rates.
The Bank has hinted that an interest rate cut is likely in the coming months but it remains worried about sticky services inflation and the pace of wage growth fuelling more price rises in the economy.
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May: ‘Path is downwards’ on interest rates
Basic pay increases have outpaced the rate of inflation since last June, boosting consumer spending power on the face of it, but household budgets have remained squeezed.
The cost of living crisis, exacerbated by unprecedented raw energy price hikes following Russia’s invasion of Ukraine, has evolved over time to even extend to the Bank’s medicine to supress inflation.
There were 14 consecutive interest rate increases from December 2021 up until last summer aimed at dampening demand to help bring price growth down.
The rate hikes drove up the cost of borrowing, with mortgage holders for example facing additional bills of hundreds of pounds more per month on average as low fixed rate terms expired.
New deals proved eyewatering in comparison.
With the main consumer prices index measure of inflation running at 2.3% – above the Bank’s 2% target – members of the rate-setting committee have acknowledged progress but they are unlikely to follow the European Central Bank in cutting rates this month.
Financial markets saw just a 10% chance of a rate cut from 5.25% to 5% on 20 June.
Most of the money is on September.
However, those predictions could yet shift.
The ONS is also set to release this week the preliminary growth figures for the economy in April. They are predicted by economists to show zero growth for the month, largely due to the impact of poor weather.
The following week sees the publication of the latest inflation figures.
How political parties have reacted
Commenting on the jobs data, shadow Work and Pensions Secretary Liz Kendall said: “Today’s figures confirm that the Tories have no hiding place after 14 years of abject failure.
“On Rishi Sunak’s watch, a record number of people are out of work due to long-term sickness at terrible cost to them, to business and the taxpayer, and we remain the only G7 country whose employment rate still isn’t back to pre-pandemic levels.
“Labour’s plan will get Britain working by cutting NHS waiting lists, introducing a new national jobs and careers service, making work pay and supporting people into good jobs across every part of the country.
“It’s time to stop the chaos, turn the page and start rebuilding Britain.”
Liberal Democrat Treasury spokesperson Sarah Olney said: “This Conservative carousel of chaos has our economy on a rollercoaster ride and the British people are sick and tired of it – it’s time for a change.”
Solana decentralized finance (DeFi) protocol Loopscale has temporarily halted its lending markets after suffering an approximately $5.8 million exploit.
On April 26, a hacker siphoned approximately 5.7 million USDC (USDC) and 1200 Solana (SOL) from the lending protocol after taking out a “series of undercollateralized loans”, Loopscale co-founder Mary Gooneratne said in an X post.
The exploit only impacted Loopscale’s USDC and SOL vaults and the losses represent around 12% of Loopscale’s total value locked (TVL), Gooneratne added.
Loopscale is “working to resume repayment functionality as soon as possible to mitigate unforeseen liquidations,” its said in an X post.
“Our team is fully mobilized to investigate, recover funds, and ensure users are protected,” Gooneratne said.
In the first quarter of 2025, hackers stole more than $1.6 billion worth of crypto from exchanges and on-chain smart contracts, blockchain security firm PeckShield said in an April report.
More than 90% of those losses are attributable to a $1.5 billion attack on ByBit, a centralized cryptocurrency exchange, by North Korean hacking outfit Lazarus Group.
Related: Crypto hacks top $1.6B in Q1 2025 — PeckShield
Unique DeFi lending model
Launched on April 10 after a six-month closed beta, Loopscale is a DeFi lending protocol designed to enhance capital efficiency by directly matching lenders and borrowers.
It also supports specialized lending markets, such as “structured credit, receivables financing, and undercollateralized lending,” Loopscale said in an April announcement shared with Cointelegraph.
Loopscale’s order book model distinguishes it from DeFi lending peers such as Aave that aggregate cryptocurrency deposits into liquidity pools.
Loopscale’s main USDC and SOL vaults yield APRs exceeding 5% and 10%, respectively. It also supports lending markets for tokens such as JitoSOL and BONK (BONK) and looping strategies for upwards of 40 different token pairs.
The DeFi protocol has approximately $40 million in TVL and has attracted upwards of 7,000 lenders, according to researcher OurNetwork.
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United States Senator Jon Ossoff expressed support for impeaching President Donald Trump during an April 25 town hall, citing the President’s plan to host a private dinner for top Official Trump memecoin holders.
“I mean, I saw just 48 hours ago, he is granting audiences to people who buy his meme coin,” said Ossoff, a Democrat, according to a report by NBC News.
“When the sitting president of the United States is selling access for what are effectively payments directly to him. There is no question that that rises to the level of an impeachable offense.”
Senator Ossoff said he “strongly” supports impeachment proceedings during a town hall in the state of Georgia, where he is running for reelection to the Senate.
The Senator added that an impeachment is unlikely unless the Democratic Party gains control of Congress during the US midterm elections in 2026. Trump’s own Republican Party currently has a majority in both the House of Representatives and the Senate.
Related: US lawmaker says TRUMP coin could risk national security
Conflicts of interest
On April 23, the Official Trump (TRUMP) memecoin’s website announced plans for Trump to host an exclusive dinner at his Washington, DC golf club with the top 220 TRUMP holders.
The website subsequently posted a leaderboard tracking top TRUMP wallets and a link to register for the event. The TRUMP token’s price has gained more than 50% since the announcement, according to data from CoinMarketCap.
The specific guest list is unclear, but the memecoin’s website states that applicants must pass a background check, “can not be from a [Know Your Customer] watchlist country,” and cannot bring any additional guests.
On April 25, the team behind TRUMP denied social media rumors that TRUMP holders need at least $300,000 to participate in an upcoming dinner with the president.
“People have been incorrectly quoting #220 on the block explorer as the cutoff. That’s wrong because it includes things like locked tokens, exchanges, market makers, and those who are not participating. Instead, you should only be going off the leaderboard,” they wrote.
Legal experts told Cointelegraph that Trump’s cryptocurrency ventures, including the TRUMP memecoin and Trump-affiliated decentralized finance (DeFi) protocol World Liberty Financial, raise significant concerns about potential conflicts of interest.
“Within just a couple of days of him taking office, he’s signed a number of executive orders that are significantly going to affect the way that our crypto and digital assets industry works,” Charlyn Ho of law firm Rikka told Cointelegraph in February.
“So if he has a personal pecuniary benefit arising from his own policies, that’s a conflict of interest.”
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions
Crypto investor sentiment has seen a significant recovery from global tariff concerns, but analysts warn that the market’s structural weaknesses may still result in downside momentum during periods of weekend illiquidity.
Risk appetite appeared to return among crypto investors this week after US President Donald Trump adopted a softer tone, saying that import tariffs on Chinese goods may “come down substantially.”
However, the improved investor sentiment “does not guarantee that Bitcoin will avoid volatility over the weekend,” analysts from Bitfinex exchange told Cointelegraph:
“Sentiment improvements reduce fragility, but they do not eliminate structural risks like thin weekend liquidity.”
“Historically, weekends remain vulnerable to sharp moves — especially when open interest is high and market depth is low,” the analysts said, adding that unexpected macroeconomic news can still increase volatility during low liquidity periods.
Related: Trump fought the bond market, the bond market won: Saifedean Ammous
Bitcoin (BTC) staged a near 11% recovery during the past week, but its rally has previously been limited by Sunday liquidity dynamics.
Bitcoin fell below $75,000 on Sunday, April 6, despite initially decoupling from the US stock market’s $3.5 trillion drop on April 4 after US Federal Reserve Chair Jerome Powell warned that Trump’s tariffs may affect the economy and raise inflation.
The correction was exacerbated by the lack of weekend liquidity and the fact that Bitcoin was the only large liquid asset available for de-risking, industry watchers told Cointelegraph.
Related: US banks are ‘free to begin supporting Bitcoin’ — Michael Saylor
“While improved sentiment creates a more stable foundation, cryptocurrency markets are still susceptible to rapid movements during periods of reduced trading volume,” according to Marcin Kazmierczak, co-founder and chief operating officer of RedStone blockchain oracle firm.
“The sentiment recovery provides some cushioning, but traders should remain cautious as weekend liquidity constraints can still amplify price movements regardless of the current market mood,” he told Cointelegraph.
Crypto investors may have “maxed out on tariff-related fears”
Cryptocurrency markets may have priced in the full extent of tariff-related concerns, according to Aurelie Barthere, principal research analyst at crypto intelligence platform Nansen.
“It feels like we’ve maxed out on tariff-related fear,” she told Cointelegraph, adding:
“While many remain uncertain about where things are headed over the next month or so, it also seems like markets were just waiting for the slightest signal that we’re back in the game.”
“Whether the rally is sustainable depends on whether we can break through previous resistance levels, at least in isolation. It could have legs, as markets now seem to believe there’s a ‘Trump put’ under equities, the US dollar and US Treasurys,” Barthere added, warning of more potential volatility amid the upcoming negotiations.
Nansen previously predicted a 70% chance that crypto markets will bottom and start a recovery by June, but highlighted that the timing will depend on the outcome of tariff negotiations.
The tariff negotiations may only be “posturing” for the US to reach a trade agreement with China, which may be the “big prize” for Trump’s administration, according to Raoul Pal, founder and CEO of Global Macro Investor.
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