The boss of Britain’s biggest mortgage lender has told Sky News he expects three interest rate cuts this year, bringing some relief to borrowers and mortgage holders.
Lloyds Banking Group chief executive Charlie Nunn said he anticipates rates will continue to fall gradually thanks to the resilience of household and business finances – but cautioned that the UK could expect low growth because of a relative lack of investment.
Speaking at the World Economic Forum in Davos, he said: “We think there’ll be three rate cuts this year.
“Of course, most people choose to fix their mortgage for two to five years and the pricing on that has been relatively stable and we think that stability is likely to remain for the remainder of this year.
“Those that are on the fixed rates are in a good place, and for those that are on a variable rate, their mortgage is likely to continue to come down slowly with the base rate.
“For those that are remortgaging, they are likely to get a significant uptick depending on when they set their mortgage.”
As Britain’s longest-serving bank chief in charge of the largest retail lender with more than 27 million customers, Mr Nunn is well-placed to assess consumer sentiment and economic prospects at the start of the year.
Image: Lloyds Banking Group chief executive Charlie Nunn
He added: “The UK economy is what I would characterise as very resilient but relatively slow growth. And that’s first of all because household finances continue to strengthen – there are some customers struggling to make ends meet and we’re always focused on them – but actually, deposits and savings in households have increased 6% year-on-year, and cash flows for many businesses again have also strengthened in the last year.
“What we haven’t yet got is investment in growth, and we still have quite a tight labour market with quite high wage inflation.”
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5:45
Why should countries invest in UK?
Mr Nunn praised Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds for delivering a positive message about the UK’s prospects in Davos, where optimism about America has contrasted with gloom-consuming European prospects.
“The UK message here has been very positive,” he said. “We’ve got a sort of barbell going on, with colleagues in America being very positive post the inauguration of [Donald] Trump… while Europe is feeling quite negative in Davos, and the UK is building its own path really as a place that people want to invest.”
“The UK is well-placed, we think, relative to the rest of the world, but sentiment has been down in the last few months and people have been nervous about some of the changes that the chancellor made on taxes in the coming months.”
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2:16
Trump puts Davos delegates on notice
The Lloyds boss was sanguine about the impact of Mr Trump’s second term, saying what counts is what he does, rather than just what he says.
“He’s one of the most predictable politicians we track, what he did on Monday this week is exactly what he said he’d do,” he said. “So there’s no uncertainty, I think, about his priorities and what he sees as important for the US economy and the ‘US first’ mindset.
“The uncertainty has always been around the execution, if he does execute, to what extent and when. Our base case for this year is that Trump will be good for the US growth, it will probably slow down the global economy if he starts to apply tariffs.”
A small plane has crashed at Southend Airport in Essex.
Essex Police said it was at the scene of a “serious incident”.
Images posted online showed huge flames and a large cloud of black smoke, with one witness saying they saw a “fireball”.
A police statement said: “We were alerted shortly before 4pm to reports of a collision involving one 12-metre plane.
“We are working with all emergency services at the scene now and that work will be ongoing for several hours.
“We would please ask the public to avoid this area where possible while this work continues.”
Image: A huge fireball near the airport. Pic: Ben G
It has been reported that the plane involved in the incident is a Beech B200 Super King Air.
According to flight-tracking service Flightradar, it took off at 3.48pm and was bound for Lelystad, a city in the Netherlands.
One man, who was at Southend Airport with his family around the time of the incident, said the aircraft “crashed headfirst into the ground”.
John Johnson said: “About three or four seconds after taking off, it started to bank heavily to its left, and then within a few seconds of that happening, it more or less inverted and crashed.
“There was a big fireball. Obviously, everybody was in shock in terms of witnessing it. All the kids saw it and the families saw it.”
Mr Johnson added that he phoned 999 to report the crash.
Southend Airport said the incident involved “a general aviation aircraft”.
Four flights scheduled to take off from Southend this afternoon were cancelled, according to its website.
Flightradar data shows two planes that had been due to land at Southend were diverted to nearby airports London Gatwick and London Stansted.
Image: Plumes of black smoke. Pic: UKNIP
Essex County Fire and Rescue Service said four crews, along with off-road vehicles, have attended the scene.
Four ambulances and four hazardous area response team vehicles are also at the airport, as well as an air ambulance, the East of England Ambulance Service said.
Its statement described the incident as “still developing”.
Image: Fire engines at the airport
David Burton-Sampson, the MP for Southend West and Leigh, posted on social media: “I am aware of an incident at Southend Airport. Please keep away and allow the emergency services to do their work.
“My thoughts are with everyone involved.”
Local councillor Matt Dent said on X: “At present all I know is that a small plane has crashed at the airport. My thoughts are with all those involved, and with the emergency services currently responding to the incident.”
This breaking news story is being updated and more details will be published shortly.
Another hint that tax rises are coming in this autumn’s budget has been given by a senior minister.
Speaking to Sunday Morning with Trevor Phillips, Transport Secretary Heidi Alexander was asked if Sir Keir Starmer and the rest of the cabinet had discussed hiking taxes in the wake of the government’s failed welfare reforms, which were shot down by their own MPs.
Trevor Phillips asked specifically if tax rises were discussed among the cabinet last week – including on an away day on Friday.
Tax increases were not discussed “directly”, Ms Alexander said, but ministers were “cognisant” of the challenges facing them.
Asked what this means, Ms Alexander added: “I think your viewers would be surprised if we didn’t recognise that at the budget, the chancellor will need to look at the OBR forecast that is given to her and will make decisions in line with the fiscal rules that she has set out.
“We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.”
Ms Alexander said she wouldn’t comment directly on taxes and the budget at this point, adding: “So, the chancellor will set her budget. I’m not going to sit in a TV studio today and speculate on what the contents of that budget might be.
“When it comes to taxation, fairness is going to be our guiding principle.”
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Afterwards, shadow home secretary Chris Philp told Phillips: “That sounds to me like a barely disguised reference to tax rises coming in the autumn.”
He then went on to repeat the Conservative attack lines that Labour are “crashing the economy”.
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10:43
Chris Philp also criticsed the government’s migration deal with France
Mr Philp then attacked the prime minister as “weak” for being unable to get his welfare reforms through the Commons.
Discussions about potential tax rises have come to the fore after the government had to gut its welfare reforms.
Sir Keir had wanted to change Personal Independence Payments (PIP), but a large Labour rebellion forced him to axe the changes.
With the savings from these proposed changes – around £5bn – already worked into the government’s sums, they will now need to find the money somewhere else.
The general belief is that this will take the form of tax rises, rather than spending cuts, with more money needed for military spending commitments, as well as other areas of priority for the government, such as the NHS.
It is “shameful” that black boys growing up in London are “far more likely” to die than white boys, Metropolitan Police chief Sir Mark Rowley has told Sky News.
In a wide-ranging interview with Sunday Morning with Trevor Phillips, the commissioner saidthat relations with minority communities are “difficult for us”, while also speaking about the state of the justice system and the size of the police force.
Sir Mark, who came out of retirement to become head of the UK’s largest police force in 2022, said: “We can’t pretend otherwise that we’ve got a history between policing and black communities where policing has got a lot wrong.
“And we get a lot more right today, but we do still make mistakes. That’s not in doubt. I’m being as relentless in that as it can be.”
He said the “vast majority” of the force are “good people”.
However, he added: “But that legacy, combined with the tragedy that some of this crime falls most heavily in black communities, that creates a real problem because the legacy creates concern.”
Sir Mark, who also leads the UK’s counter-terrorism policing, said black boys growing up in London “are far more likely to be dead by the time they’re 18” than white boys.
“That’s, I think, shameful for the city,” he admitted.
“The challenge for us is, as we reach in to tackle those issues, that confrontation that comes from that reaching in, whether it’s stop and search on the streets or the sort of operations you seek.
“The danger is that’s landing in an environment with less trust.
“And that makes it even harder. But the people who win out of that [are] all of the criminals.”
Image: Met Police Commissioner Sir Mark Rowley
The commissioner added: “I’m so determined to find a way to get past this because if policing in black communities can find a way to confront these issues, together we can give black boys growing up in London equal life chances to white boys, which is not what we’re seeing at the moment.
“And it’s not simply about policing, is it?”
Sir Mark said: “I think black boys are several times more likely to be excluded from school, for example, than white boys.
“And there are multiple issues layered on top of each other that feed into disproportionality.”
‘We’re stretched, but there’s hope and determination’
Sir Mark said the Met is a “stretched service” but people who call 999 can expect an officer to attend.
“If you are in the middle of a crisis and something awful is happening and you dial 999, officers will get there really quickly,” Sir Mark said.
“I don’t pretend we’re not a stretched service.
“We are smaller than I think we ought to be, but I don’t want to give a sort of message of a lack of hope or a lack of determination.”
“I’ve seen the mayor and the home secretary fighting hard for police resourcing,” he added.
“It’s not what I’d want it to be, but it’s better than it might be without their efforts.”
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0:39
How police tracked and chased suspected phone thief
‘Close to broken’ justice system facing ‘awful’ delays
Sir Mark said the criminal justice system was “close to broken” and can be “frustrating” for police officers.
“The thing that is frustrating is that the system – and no system can be perfect – but when the system hasn’t managed to turn that person’s life around and get them on the straight and narrow, and it just becomes a revolving door,” he said.
“When that happens, of course that’s frustrating for officers.
“So the more successful prisons and probation can be in terms of getting people onto a law-abiding life from the path they’re on, the better.
“But that is a real challenge. I mean, we’re talking just after Sir Brian Leveson put his report out about the close-to-broken criminal justice system.
“And it’s absolutely vital that those repairs and reforms that he’s talking about happen really quickly, because the system is now so stressed.”
Giving an example, the police commissioner went on: “We’ve got Snaresbrook [Crown Court] in London – it’s now got more than 100 cases listed for 2029.”
Sir Mark asked Trevor Phillips to imagine he had been the victim of a crime, saying: “We’ve caught the person, we’ve charged him, ‘great news, Mr Phillips, we’ve got him charged, they’re going to court’.
“And then a few weeks later, I see the trial’s listed for 2029. That doesn’t feel great, does it?”
Asked about the fact that suspects could still be on the streets for years before going to trial, Sir Mark conceded it’s “pretty awful”.
He added: “If it’s someone on bail, who might have stolen your phone or whatever, and they’re going in for a criminal court trial, that could be four years away. And that’s pretty unacceptable, isn’t it?”
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She pinned the primary blame for the Met’s culture on its past leadership and found stop and search and the use of force against black people was excessive.
At the time, Sir Mark, who had been commissioner for six months when the report was published, said he would not use the labels of institutionally racist, institutionally misogynistic and institutionally homophobic, which Baroness Casey insisted the Met deserved.
However, London Mayor Sadiq Khan, who helped hire Sir Mark – and could fire him – made it clear the commissioner agreed with Baroness Casey’s verdict.
A few months after the report, Sir Mark launched a two-year £366m plan to overhaul the Met, including increased emphasis on neighbourhood policing to rebuild public trust and plans to recruit 500 more community support officers and an extra 565 people to work with teams investigating domestic violence, sexual offences and child sexual abuse and exploitation.