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The Bank of England has raised UK interest rates by a further half percentage point to 4%, but gave its clearest signal yet that borrowing costs may now be nearing their peak.

This was the Bank’s tenth successive interest rate increase, but in the accompanying documentation, it hinted that there is a chance it might be the last for the time being, saying that it would only raise rates further “if there were to be evidence of more persistent [inflationary] pressures” than in its forecasts.

Those forecasts suggest that inflation has now peaked, and that it will come down gradually this year and next, eventually dropping beneath the Bank’s 2% target.

“I do see the signs that we’re turning a corner, and that obviously is encouraging but there’s a long way to go,” Andrew Bailey, governor of the Bank of England, told Sky News in an interview. “There’s still some very big risks out there.”

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BoE governor explains interest rate rise

“We’re going to take it each game as it comes and look at the evidence very closely,” he added.

In raising interest rates again, the Bank pointed to wages in the private sector rising faster than anticipated.

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Chancellor agrees on rate hike

There are widespread strikes this week in the public sector as workers fight for higher wages. Mr Bailey said the Bank would be keeping a close eye on developments in this area, as they could contribute further to inflation.

“What happens going forwards on wage setting will be very important and we’ll be watching it very closely because that will be an important indicator of whether the very sharp downward path of inflation will happen,” he said.

The Bank also upgraded its general forecast for the economy on Thursday.

While it still projects a technical recession this year, it would be a very shallow recession, with overall growth falling by 0.5% in 2023, compared with its November forecast of a 1.5% fall.

“If it emerges now, it’ll be the shallowest recession in a long long time,” Mr Bailey said.

Ed Conway analysis: It’s clear the Bank thinks we are – or near to – a peak in interest rates

Seven members of the nine-person Monetary Policy Committee supported the half percentage point increase, but two members – Swati Dhingra and Silvana Tenreyro – voted to leave borrowing costs on hold.

All were told that while the increase today is significant, the hints included in the Bank’s minutes represent a marked change in tone.

Previously it had said that it was ready to respond “forcefully” to higher inflation; this time, that language was removed.

Previously it had said further rate increases might be required if the economy behaved in line with their forecasts; this time it indicated that rate increases were dependent on higher inflation than in its forecasts.

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Chancellor Jeremy Hunt has said the Treasury supports the Bank of England’s decision to increase the interest rate to 4%.

The shifts in language leave the door open for some small further increases in borrowing costs but provide the firmest signal yet that UK interest rates are now at, or close to, their peak.

Outlook still weaker than in recent years

Still, while the outlook for the UK economy is better than in the Bank’s previous forecasts, it is nonetheless far weaker than in recent years.

While the average UK growth rate pre-financial crisis was around 2.5% and around 1.5% post-pandemic, the Bank expects underlying growth of just 0.7% in the coming years.

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Is Brexit to blame? The war in Ukraine? Ed Conway takes a look at why the IMF predicts the UK economy is behind any advanced nation this year

Moreover, because of the fall in national income projected this year, it now expects that the size of the economy will still be at 2019 levels in 2026 – a full seven years of lost growth.

Many other countries around the world have already exceeded their post-pandemic level; the UK, according to the Bank’s figures, is set to languish below it until the second half of this decade.

A spokesperson for the prime minister commenting on the figures said: “Inflation is the biggest threat to living standards in a generation, we support the bank’s action today. We will continue to take the decisions needed to reduce inflation.”

“This is a difficult time for mortgage holders in the UK. Inflation falling is not a given, it requires government to stick to the difficult decisions it has taken.”

On the subject of mortgage rates, Mr Bailey told Sky News that he was “hoping that we’ll see much more stability in the interest rate curve off of which mortgages are priced off.”

“That evidence is helpful, but there are a lot of people who don’t immediately benefit from that,” he added.

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This mum faces a nightly battle to keep her daughter alive – but the NHS won’t help her

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This mum faces a nightly battle to keep her daughter alive - but the NHS won't help her

For Shelley Mclean, every night is a sleepless one, just to keep her 11-year-old daughter alive.

Missy was born with a rare genetic condition that affects her breathing, digestion and movement.

She spent the first nine months of her life in hospital before coming home with a breathing tube in her throat, a feeding tube in her stomach, and a line into her bowel.

At first, the family had some NHS-funded nighttime care to help keep Missy safe while she slept.

But when her local NHS body decided she no longer met the threshold, that support was taken away.

Missy has a breathing tube in her throat, a feeding tube in her stomach, and a line into her bowel
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Missy has a breathing tube in her throat, a feeding tube in her stomach, and a line into her bowel

Now, Missy’s mother is responsible for her care.

“I’m her nurse, her physio, her carer,” says Shelley. “I don’t sleep properly because I’m scared she’ll stop breathing.

“They say we don’t meet the threshold – but I don’t know what more they need to see.”

Every night, Shelley prepares Missy’s medicines, checks her tubes, and monitors her breathing.

“This is an epilepsy medicine,” she says, holding up a syringe.

“If she’s not tolerating food orally, I put it down the tube.”

Despite her exhaustion, Shelley is grateful for the care that once saved her daughter’s life.

“I’m very grateful the NHS saved Missy – she wouldn’t be here without them. But they’re crippling the parents.”

Shelley Mclean cares for her daughter Missy round the clock
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Shelley Mclean cares for her daughter Missy round the clock

The postcode lottery

Children like Missy who leave hospital but still need intensive support are meant to receive what’s called NHS continuing care – specialist help for those with the most complex, life-limiting or life-threatening needs.

But Sky News has seen new data which shows access to this care is deeply inconsistent across England, creating a postcode lottery that leaves many families struggling to survive without the help they require.

New figures obtained by Sky News reveal just how uneven continuing care has become.

NHS spending on children’s continuing care ranges from just 80p to £6 per head depending on where families live.

Out of almost 100,000 children in England with a life-limiting or life-threatening condition, only around 4% – roughly 4,400 – receive NHS continuing care funding.

And more than half of all disabled children referred for this kind of support are rejected.

Anna Bird, chief executive of charity Contact, says the system is leaving thousands of families on the brink.

“We’re not seeing the commitment to make sure those who need continuing care are getting it,” she told Sky News.

“Our research shows there’s a huge postcode lottery – families are running kind of little hospitals at home just to keep their children well and alive.

“They’re being let down by continuing care, and they’re not getting the support they need.”

In some areas, campaigners say local NHS bodies have cut back on support even for children with the most serious medical conditions.

Parents report being told their child no longer qualifies for help despite their needs remaining unchanged.

For Shelley, that decision means she rarely sleeps through the night.

“If I don’t go to her, she could be dead,” she says quietly. “She could have a fit and… you know, she could be dead.”

Shelley, Missy and her brother
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Shelley, Missy and her brother

In a statement, NHS Cheshire and Merseyside said: “We understand Ms Mclean will be disappointed with the decision relating to her daughter’s funding.

“While we’re unable to comment on individual cases due to our commitment to patient confidentiality, all patients are reviewed jointly by health and care professionals to ensure they are receiving the most appropriate care for their needs.

“Patients who wish to discuss their funding decision are able to contact NHS Cheshire and Merseyside using the contact details included in their patient letters.”

But campaigners say that without national standards – and without the law forcing consistent assessments – those reviews will continue to vary wildly from one area to the next.

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Alderhay hospital
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Alderhay hospital

The human cost

The result is that parents like Shelley find themselves trapped between two systems – the NHS and social care – neither of which can agree who is responsible.

“I’m not the type of person who wants to ask anyone for help,” she says. “But it’s brought me to my knees.”

For Shelley, that gap is more than bureaucratic. It’s personal, relentless, and exhausting.

“I would invite them to come and have a week in my position – to try to wake up every hour, on the hour, every night. Then they might understand.”

Campaigners say no parent should have to shoulder that burden alone – and they want ministers to act.

They’re calling on the government to make continuing care a statutory entitlement, with consistent assessments, proper funding, and transparency about who gets help and who doesn’t.

Until then, families like Shelley’s will continue to do the work of the NHS from their own homes – unpaid, unsupported, and exhausted.

Shelley feeding Missy
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Shelley feeding Missy

The Department for Health and Social Care said: “Our thoughts go out to Shelley and Missy – everyone should have access to high-quality, compassionate care.

“As part of our 10-Year Health Plan, the government is shifting more healthcare out of hospitals and into the community, to ensure patients and their families can get the care they need, where and when they need it.

“Integrated Care Boards are responsible for meeting the needs of local people – including Children and Young People’s Continuing Care and ensuring the care requirements of people like Missy and Shelley are met.

“This government has set out best practice, and provided guidance around assessments, decision-making and agreeing care packages for Children and Young People’s Continuing Care.”

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PM dismisses calls for investigation into Reeves over rental ‘mistake’

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PM dismisses calls for investigation into Reeves over rental 'mistake'

Sir Keir Starmer has dismissed calls for an investigation into his chancellor after she apologised for putting her family home up for rent without obtaining the necessary licence.

Rachel Reeves wrote to the prime minister to “sincerely” apologise for the “inadvertent error”, which was first reported by the Daily Mail.

The newspaper reported that the chancellor rented her family home in Dulwich when she moved into Number 11 Downing Street, but was unaware she had to obtain a licence to do so.

Some London boroughs require private landlords to obtain a specific kind of licence if they are putting their property up for rent – including Southwark Council, where Ms Reeves’ home is listed.

The newspaper said Ms Reeves had now applied for a licence, but the Conservatives have called for an investigation.

A spokesperson for Ms Reeves said: “Since becoming chancellor, Rachel Reeves has rented out her family home through a lettings agency.

“She had not been made aware of the licensing requirement, but as soon as it was brought to her attention, she took immediate action and has applied for the licence.

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“This was an inadvertent mistake and in the spirit of transparency, she has made the prime minister, the independent adviser on ministerial standards and the parliamentary commissioner for standards aware.”

It is understood that Sir Laurie Magnus, the prime minister’s ethics adviser, has not launched an investigation into Ms Reeves.

Sir Keir said further investigation into the issue was “not necessary” after consulting Sir Laurie.

In a letter to Ms Reeves, he suggested her apology was a “sufficient resolution”.

Daisy Cooper, deputy leader of the Liberal Democrats, said the chancellor was adding to the government’s “list of scandals”.

“The chancellor is meant to be delivering growth but the only thing she appears to be growing is the government’s list of scandals,” she said.

“Just weeks before the budget, this risks seriously undermining confidence in this government and its ability to focus on the urgent tasks at hand.”

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Chancellor faces tough budget choices

The development comes weeks before Ms Reeves delivers her budget on 26 November.

She is rumoured to be considering a series of tax hikes, including a new tax on the sale of homes worth more than £500,000 to replace stamp duty.

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What tax rises and spending cuts could Reeves announce?
Why is there a budget black hole?

Under the proposal, sellers, instead of buyers, would be responsible for paying the tax.

The chancellor is understood to be looking at an annual 1% charge on the amount a property’s value exceeds £2m – a £10,000-a-year levy for homes worth £3m.

Another proposal would see capital gains tax (CGT) charged when someone sells their main home, based on the amount it has increased in value during ownership.

Reports suggest this would only be applied to the most expensive properties, with a possible threshold of £1.5m, which would affect about 120,000 homeowners and higher-rate taxpayers getting CGT bills of nearly £200,000.

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Wrongly-released migrant sex offender Hadush Kebatu claims he was ‘ignored’ by police while trying to hand himself in

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Wrongly-released migrant sex offender Hadush Kebatu claims he was 'ignored' by police while trying to hand himself in

Migrant sex offender Hadush Kebatu, who was wrongly freed from prison, has claimed in an interview with Sky News that he tried to hand himself in to police a day before he was arrested, but was ignored by officers.

The Home Office said Kebatu, 38, was deported from the UK on Tuesday night.

Speaking to Sky News after he arrived back in Ethiopia on Wednesday morning, Kebatu shared details of his accidental release from HMP Chelmsford on 24 October and the two-day manhunt that followed.

The convicted sex offender was repeatedly questioned on his crimes, but Sky News has chosen not to broadcast this part of the interview.

‘Ignored’ by police

The morning after he was released from prison, Kebatu claimed he tried to hand himself into police, but was ignored.

He said: “I [told] police, look here, police I am wanted man, I am arrested, I will give you my hand, please help where is police station? He ignored me, he drove [off].”

He added that he told the officer his name and that he was mistakenly released from prison.

“I am not unknown. The police station, where is the place? But also I go to police, I will give you my hand please help me where is the police station, take me, I am wanted.

“You know me, or my image, my name is Hadush Kabatu, nationality Ethiopia. Please, I was the mistake release from Chelmsford prison. Please help me.”

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Moment Hadush Kebatu put on deportation flight

Responding to Kebatu’s claims, the Metropolitan Police told Sky News: “The Met is not aware of any evidence to support the claims that Kebatu approached officers on Saturday morning.

“The actions of officers who responded to the sighting of him on Sunday morning show how seriously they were taking the manhunt. Kebatu’s actions on the morning of his arrest were more like those of someone trying to avoid officers, not trying to hand himself in.”

Release from prison

Kebatu was released by HMP Chelmsford a month into his 12-month sentence on the expectation he would be picked up by immigration enforcement.

He said after he was released he waited more than three hours outside the prison, for what he described as someone who was “responsible” for him.

He said: “At that time I am waiting more than three hours… who [is] responsible for me? Where is Home Office, where is [immigration]?

“I was told there was a bus. Also, all the experts, they all ignored me.”

In another Sky News story, a delivery driver who spoke to Kebatu outside Chelmsford prison said he looked “confused”.

The driver said he was approached by the prisoner, who had no idea where he was supposed to go. He said Kebatu waited outside the prison for roughly “an hour and a half” before leaving.

Kebatu said after he left the prison, he asked a passerby where the train station was. He claimed someone helped him, and bought him a train ticket for £18.

Kebatu then travelled to London. He was spotted later that evening in Stratford, east London, and then the Dalston area of Hackney.

Kebatu's movements the day he was released from prison
Image:
Kebatu’s movements the day he was released from prison

The Ethiopian national arrived in the UK on a small boat on 29 June. Days after his arrival, he sexually assaulted a 14-year-old girl and a woman in Epping, Essex, where he was staying.

He was found guilty of two counts of sexual assault, one count of attempted sexual assault, one count of inciting a girl to engage in sexual activity and one count of harassment without violence.

He was jailed on 23 September.

When approached by Sky News, the Ministry of Justice (MoJ) pointed to a statement made by Justice Secretary David Lammy upon Kebatu’s deportation: “Kebatu has been returned to Ethiopia where he belongs.

“I am grateful to Home Office colleagues for acting swiftly to secure his deportation. I have been clear from the outset that a mistake of this nature is unacceptable, and we must get to the bottom of what happened.

“I have established an independent investigation chaired by Dame Lynne Owens into last Friday’s events to get the public the answers they rightly deserve, and we have introduced the strictest checks ever seen in our prison system to stop similar unacceptable errors in future.”

Essex Police, who arrested Kebatu after the assaults in July, told Sky News: “Our officers responded quickly to the reports of the sexual assaults committed in Epping and arrested Hadush Kebatu on the same day the offences were reported to us.

“Kebatu was then immediately remanded in custody, while officers acted diligently and professionally securing charges and building a case which saw Kebatu convicted following a trial. Protecting women and girls is a priority for Essex Police and our swift and thorough actions highlight our commitment to this.”

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