A member of the Bank of England’s rate-setting committee has made a case for a steeper cut to interest rates on expectations that an inflation “hump” ahead will be temporary.

Catherine Mann, an American economist, told an audience in Leeds that she currently did not see a repeat of an extended period of inflation in the months to come, such as that which followed Russia’s invasion of Ukraine.

She described herself as an “activist” on the Bank’s monetary policy committee, having voted last week for a half percentage point interest rate reduction.

Ms Mann said her decision aimed to “cut through the noise” about the right stance for policy given the weaker outlook for employment and the economy than had been previously expected at the end of 2024.

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But she cautioned that while her policy path differed to the majority view for “gradual” rate reductions, the Bank rate, she said, would need to remain restrictive for longer.

Ms Mann had been considered the top hawk – a policymaker leaning towards higher rates – on the Bank’s monetary policy committee (MPC) until it emerged she had backed a half-point cut.

A 0.25 percentage point reduction was passed.

Her earlier worries about rate cuts included a high pace for wage growth and budget-linked investment, stoking inflation down the line.

Last Thursday’s rate decision meeting minutes showed that she, and one other member of the MPC Swati Dhingra, had varied concerns relating to the Bank rate remaining too restrictive at a time of weak economic growth and a weakening employment outlook, with both likely to weigh on inflation naturally.

New Bank staff projections saw the economy growing by just 0.75% this year and inflation topping 3.7% – up from the current 2.5% rate.

Ms Mann told the audience at Leeds Beckett University: “In a speech last February I said, ‘Do not be seduced by the deceleration in headline inflation’. This February, I say, ‘Do not be dismayed by the hump… yet’.”

She expected much of the anticipated increase in inflation this year to come from energy and food, with contributions from other elements such as water bills, phone bills and insurance.

These are factors outside the Bank’s control.

What it wants to avoid is a price spike that forces up wage growth to counter the higher costs – as happened after the energy-led start to the cost of living crisis in 2022.

She said that elements such as budget tax rises on employment would, as Bank surveys have suggested, weigh on both wage growth and therefore inflation.

“I chose 50 basis points now, along with continued restrictiveness in the future, and a higher long-term Bank Rate
to ‘cut through the noise’,” she added.

Octopus Energy Group is wading into the battle for the future of Britain’s biggest water company as part of a consortium which includes the French infrastructure giant Suez.

Sky News has learnt that Octopus Energy – which recently overtook British Gas as Britian’s biggest household gas and electricity supplier – has struck an agreement that would see its technology arm managing Thames Water‘s 16 million customers.

The deal with Kraken would provide Covalis Capital, the infrastructure investor spearheading the consortium, with critical technology expertise as it seeks to manage one of the UK’s most complex utilities – and one with a long-standing reputation for poor customer service.

Earlier reports said that Covalis would inject about £1bn into Thames Water, with £4bn more raised from asset sales, refinancing and a stock market listing.

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Some industry sources have expressed doubts about the feasibility of such a plan.

The emergence of Octopus Energy’s involvement in the Thames Water crisis underlines the scale of Kraken’s ambitions as it further extends its reach beyond the energy sector.

Earlier this week, TalkTalk became the first major broadband provider to join the Kraken platform.

Wholly owned by Octopus Energy, Kraken now manages more than 60 million customer accounts globally, of which roughly five million are water company customers.

The consortium comprising Covalis, Suez and Octopus Energy was among fewer than a handful which tabled indicative offers to help Thames Water raise roughly £3bn in fresh equity ahead of a deadline on Monday.

CK Infrastructure Holding and Castle Water are also understood to have submitted proposals, while the private equity behemoth KKR remains interested but did not lodge an offer, according to insiders.

This week’s deadline was in any case regarded as arbitrary and meaningless because two other crucial determinants of Thames Water’s future have yet to become clear.

One is the outcome of a court battle between the water company’s class A and class B bondholders, both of which have said they want to lend a further £3bn to help Thames Water survive.

The company has backed the class A plan despite the fact that it will saddle Thames Water with higher interest payments at a time when its creaking balance sheet has left it on the brink of temporary nationalisation.

The second major uncertainty is whether Thames Water plans to appeal against an Ofwat ruling that it can increase customer bills by 35% over the next five-year regulatory period, rather than the 53% it had requested.

Thames Water must decide within days whether to formally appeal to the Competition and Markets Authority.

Prospective equity investors regard both those events as material to their investment case, with a preferred bidder not expected to be chosen by the company and its advisers at Rothschild until April.

Thames Water was plunged deeper into crisis last year when its existing shareholders – comprising a combination of sovereign wealth funds and pension funds – declared the company “uninvestible” and reneged on a commitment to provide billions of pounds in new funding.

The government has said it does not regard a special administration regime (SAR) as a desirable outcome, although an adverse outcome from the bondholders’ legal fight or inability to secure additional equity could render the company insolvent.

Laden with £19bn of debt, Thames Water has already warned that it will run out of money next month.

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The only other major example of a SAR process was that involving Bulb Energy, which collapsed in 2021.

Its 1.5 million-strong customer base was bought by Octopus Energy, with their accounts transferred onto Kraken within six months.

Kraken, which works with UK water companies including Severn Trent and Portsmouth Water, says that it reduces water leakages, and reduces costs for both companies and customers.

Octopus Energy declined to comment on Tuesday.

OpenAI’s chief executive and co-founder has told Sky News that his platform is “not for sale” after a group led by Elon Musk launched an unsolicited $97.4bn (£78.7bn) bid overnight.

Sam Altman, who is attending the Paris AI Summit with world leaders, was asked whether he can still afford OpenAI after Mr Musk’s bid.

“The board will decide what to do there… the mission is really important and we’re totally focused on making sure we preserve that,” he told Sky’s science and technology editor Tom Clarke on Tuesday morning.

“The company is not for sale, neither is the mission,” he said.

OpenAI is planning to transition to a for-profit company which Mr Musk has vehemently opposed. He has even launched legal action over it.

“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Mr Musk – who was also a co-founder of OpenAI – said in a statement on Monday. “We will make sure that happens.”

Mr Altman also said he would like to “work with China” although he doesn’t know if the US government would let him do that.

“Should we try as hard as we absolutely can [to work with them]? Yes,” he said.

Chinese company DeepSeek sent shockwaves through the AI industry a fortnight ago, when it revealed a powerful AI model that was significantly cheaper than OpenAI’s ChatGPT.

US officials have raised security concerns about the company, however, and it is already banned on some government devices.

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Mr Altman was asked if he can reassure users that one of the fastest-growing generative AI platforms will continue to put safety at the forefront of what the company does.

He said his platform can be safer amid concerns that red tape around artificial intelligence will be resisted as businesses say it stifles innovation.

“Safety is integral to what we do… We’ve got to make these systems really safe for people, or people just won’t use them. It’s the same thing and we’ll work super hard on that,” said Mr Altman.

Acknowledging that safety is not high on the summit’s agenda, he added: “That’s not actually the main thing that we’ve been hearing about – the main concern has been ‘can we make this cheaper, can you have more of it, can we get it better and more advanced’.”

But asked if OpenAI can look at all of those elements as well as safety, he added: “Yes, we can also do that.”

It comes as US vice president JD Vance warned that “excessive regulation” would kill the rapidly growing AI industry.

“Now, at this moment, we face the extraordinary prospect of a new industrial revolution, one on par with the invention of the steam engine,” he said.

“But it will never come to pass if overregulation deters innovators from taking the risks necessary to advance the ball.”

In his first foreign trip as vice president, Mr Vance said President Trump’s administration will “ensure that AI systems developed in America are free from ideological bias”.

He said the United States would “never restrict our citizens’ right to free speech.”