The Bank of England has left its interest rate unchanged at 5.25%, a day after inflation unexpectedly fell by more than expected.
The Bank’s monetary policy committee (MPC) voted 5-4 – the narrowest possible margin – to leave the cost of borrowing unchanged.
Up until the inflation data was released on Wednesday morning, markets had put an 80% probability on them raising the rate by a further quarter percentage point.
By this morning, that probability had sunk to just below 50%.
The decision brings to an end the longest successive period of “tightening” (a lift in the cost of borrowing) in recent Bank of England history – as the MPC raised rates in 14 successive meetings.
The last time the MPC voted to leave interest rates unchanged was in November 2021.
However, the fact that four members – Jon Cunliffe, Megan Greene, Jonathan Haskel and Catherine Mann – voted to raise the cost of borrowing might be seen as a signal that in the coming months the Bank may lift rates again.
The Bank also voted to continue its programme of reversing quantitative easing – the scheme whereby it creates money to buy government bonds and pump cash into the economy.
It is arguably the most exciting non-event in recent economic history.
Today, for the first time since late 2021, the Bank of England voted to leave borrowing costs unchanged.
Now in some senses, this is indeed a non-event. Interest rates are no higher than they were yesterday, but the cost of borrowing remains painfully high for many households.
Those due to refinance their mortgages in the coming months will still see a sharp increase in their rates compared with two or five years ago. The cost of living crisis is still with us.
It said over the next year it will sell off a further £100bn of bonds, cutting its total asset pile down to £658bn.
The Bank of England governor, Andrew Bailey, said: “Inflation has fallen a lot in recent months, and we think it will continue to do so.
“That’s welcome news. But there is no room for complacency. We need to be sure inflation returns to normal and we will continue to take the decisions necessary to do just that.”
Ahead of the meeting, economists had been torn on whether the promise of falling inflation would outweigh the Bank’s concerns about rising wage inflation.
It has previously cited both of these statistics as key things to watch.
In the event, the five members who voted to leave rates unchanged judged “the latest developments meant that the judgement to keep Bank rate unchanged at this meeting rather than increase it was finely balanced” – according to the minutes of the MPC.
“Conditions were likely to warrant a restrictive policy stance being maintained until material progress had been made in returning inflation to the 2 per cent target.”
That signals that there is still a significant chance that Bank rate rises again, and that even if it doesn’t, it is unlikely to come down very quickly.
A former British soldier who escaped from Wandsworth Prison has been found guilty of spying for Iran.
Daniel Khalife, 23, who was a lance corporal in the Royal Signals, used a sling made from trousers worn by inmates working in the kitchen to cling to the underside of a food delivery lorry on 6 September last year.
He was being held in the Category B prison accused of handing secret information, including a list of soldiers – some of whom were serving in the SAS – to Iranian spies.
MI5, the Ministry of Defence and counter-terrorism police launched a nationwide manhunt, fearing Khalife would try to flee to Tehran or get to the Iranian embassy in London.
Woolwich Crown Court heard that while on the run he bought a mobile phone to call his handlers, who used the code name “David Smith”, and sent the message: “I wait.”
But Khalife was arrested on the morning of 9 September when he was spotted riding a stolen mountain bike along the canal towpath in Northolt, west London – about 14 miles away from Wandsworth Prison.
He initially pleaded not guilty to an escape charge but changed his plea after describing the break-out to jurors, saying it showed “what a foolish idea it was to have someone of my skillset in prison”.
Khalife, who first contacted an Iranian spy soon after he joined the Army aged 16, claimed he wanted to be a “double agent” and “thought he could be James Bond” but had only passed on fake or useless information.
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2:17
From October: Jurors shown CCTV of Khalife after escape
Giving evidence, he described himself as an English “patriot”, adding: “I’m certainly not a terrorist or a traitor.”
But he was found guilty of a charge of gathering, publishing or communicating information that might be useful to an enemy between 1 May 2019 and 6 January 2022, under the Official Secrets Act.
Khalife, from Kingston, in southwest London, was also found guilty of eliciting personal information about armed forces personnel that was likely to be useful to a person committing or preparing an act of terrorism on 2 August 2021.
The charge related to a photo of a handwritten list of 15 soldiers, including some from special forces serving in the Special Air Service (SAS) and Special Boat Service (SBS).
Khalife was found not guilty of perpetrating a bomb hoax at his barracks in January 2023.
‘The ultimate Walter Mitty’
Dominic Murphy, the head of the Metropolitan Police’s counter-terrorism command, said while Khalife’s approach was “amateurish” with elements of “fantasy”, the reality was he provided “highly sensitive” information to the Iranian state.
“He’s the ultimate Walter Mitty character,” he said. “The problem is he’s a Walter Mitty character that was having an extremely significant impact on the real world.”
A Walter Mitty character is someone who is ordinary but has an extraordinary imagination and daydreams about personal triumphs to escape their dull life.
Mr Murphy said the “game” played by Khalife to “fuel his ego” posed “a significant risk to national security” and he had “enjoyed the thrill of the deception throughout”.
Police have disrupted 20 direct plots from the Iranian government, including assignations or immediate threats to life, and the state’s agents “pose a very real threat to national security and to individuals here in the UK”, Mr Murphy said.
Khalife told the jury he contacted an Iranian agent through Facebook because he wanted to endear himself to the UK security services after he was told he couldn’t pass developed vetting to fulfil his dream of working in intelligence because his mother was born in Iran.
Dead drops
Khalife left material in public locations in exchange for cash in an old-fashioned spy tactic known as the “dead drop” or “dead letter box”.
He first collected £1,500 in a dog poo bag in Mill Hill Park in Barnet, north London, in August 2019 and made a second £1,000 cash pick-up from Kensal Green Cemetery, in North Kensington, in October 2021.
He twice travelled from his barracks, in Staffordshire, to the Iranian embassy in South Kensington, in London, and even flew to Istanbul, where he stayed in the Hilton hotel between 4 and 10 August 2020, and “delivered a package” for Iranian agents, the court heard.
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Sky’s Shamaan Freeman-Powell reports from Woolwich Crown Court
The contact continued while he was deployed to Fort Hood, Texas, where he received training in Falcon, a military communications system.
Khalife repeatedly contacted the British security services himself saying he wanted to be a “double agent”, but MI5 reported him to police, who arrested him.
While on bail, he went AWOL from his base, leaving a device made from three laughing gas canisters bound with sniper tape on his desk.
He stayed in a stolen Ford Transit van, later found containing a camp bed, around £20,000, and notes saying he wanted to defect to Iran.
Prosecutors said he planned to leave the country, having previously travelled to Turkey as a test for onward travel to Iran, and he was in contact with his Iranian handlers, making attempts to get to the embassy.
But he was arrested again three weeks later after a colleague spotted him in the leisure centre. He was then held on remand in Wandsworth Prison, where he managed to get a job in the kitchen.
Escape planned for ‘quite some time’
Khalife told the jury he planned the escape because he wanted to be moved to the high-security unit in Belmarsh to avoid sex predators and terrorists who wanted to do him harm.
Police believe he had been planning the “pretty audacious” break-out for “quite some time” and he wrote in his prison diary of a “failed” escape attempt on 21 August last year.
Khalife told the jury he attached the makeshift rope to the Bidfood lorry on 1 September to test prison security as it made its daily deliveries.
“When I had made the decision to actually leave the prison I was going to do it properly,” he said, describing how he concealed himself, resting his back on the sling as the vehicle was searched.
The driver Balazs Werner said two guards told him someone was missing as they checked the truck with a torch and mirror and he was surprised he was allowed to drive off and that the prison wasn’t in lockdown.
Khalife said he waited for the lorry to stop, dropped to the ground and lay in the prone position until it moved off.
He used the phone at the Rose of York pub in Richmond before a contact withdrew £400 from a nearby cashpoint, which he used to buy a sleeping bag, a mobile phone and a change of clothes.
CCTV footage captured his movements as he bought clothes from Marks & Spencer, stole a hat from Mountain Warehouse, drank coffee at McDonald’s and even read about his escape in the newspaper.
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From October: Khalife caught on CCTV. Pic: Met Police
When he was arrested on the footpath of the Grand Union Canal in Northolt after four days on the run, Khalife told police: “My body aches. I f****d myself up under the lorry” and “I don’t know how immigrants do it”.
Police said he had no help from anyone inside prison, Iran or close family members in London but a 24-year-old man and a 25-year-old woman were arrested earlier this year on suspicion of assisting an offender and the investigation is ongoing.
The prisons watchdog called for Wandsworth to be put into emergency measures in the wake of Khalife’s escape, while a security audit identified “81 points of failure” and resulted in “long overdue” upgrades to CVTV cameras which hadn’t worked for more than a year.
The Ministry of Justice (MoJ) later announced it would be redirecting £100m from across the prison service to spend over five years on bringing in “urgent improvements”.
Meanwhile, Bethan David, from the Crown Prosecution Service (CPS), said: “As a serving soldier of the British Army Daniel Khalife was employed and entrusted to uphold and protect the national security of this country. But, for purposes of his own, Daniel Khalife, used his employment to undermine national security.
“The sharing of the information could have exposed military personnel to serious harm, or a risk to life, and prejudiced the safety and security of the United Kingdom.
“It is against the law to collate and share secret and sensitive information for a purpose against the interests of the United Kingdom.
“Such hostile and illegal activities jeopardise the national security of the United Kingdom, and the CPS will always seek to prosecute anyone that carries out counter state threats.”
Gregg Wallace will step away from presenting MasterChef while complaints made to the BBC from individuals about historical allegations of misconduct are investigated, the show’s production company said.
The 60-year-old has been a co-presenter and judge of the popular cooking show since 2005.
Last month, Wallace responded to reports that a BBC review had found he could continue working at the corporation following reports of an alleged incident in 2018 when he appeared on Impossible Celebrities.
Wallace said the claims had been investigated “promptly” at the time and he did not say “anything sexual” while appearing on the game show more than half a decade ago.
In an Instagram post following an article in The Sun newspaper, he wrote: “The story that’s hitting the newspapers was investigated promptly when it happened six years ago by the BBC.
“And the outcome of that was that I hadn’t said anything sexual. I’ll need to repeat this again. I didn’t say anything sexual.”
Alongside MasterChef, Wallace presented Inside The Factory for BBC Two from 2015.
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He stepped away in 2023 and said he wanted to focus on taking care of his autistic and non-verbal son, Sid, who he shares with his wife, 39-year-old caterer Anne-Marie Sterpini.
The couple married in 2016 in Haver Castle in Kent with MasterChef co-presenter John Torode as best man, after meeting three years earlier on Twitter when she asked him his opinion on pairing duck with rhubarb.
Wallace has featured on various BBC shows over the years, including Saturday Kitchen, Eat Well For Less, Supermarket Secrets, Celebrity MasterChef and MasterChef: The Professionals, as well as being a Strictly Come Dancing contestant in 2014.
He was made an MBE for services to food and charity last year.
Recorded episodes of MasterChef: The Professionals featuring Wallace will be transmitted as planned, the PA news agency understands.
This breaking news story is being updated and more details will be published shortly.
The Prince and Princess of Wales have paid tribute to a teenage photographer who they met during an investiture at Windsor Castle.
Liz Hatton, who died yesterday, was pictured hugging Kate after the princess invited her to take pictures of the Prince of Wales at the event in October.
The 17-year-old from Harrogate started a photography bucket list appeal in January after she was diagnosed with a rare and aggressive form of cancer.
She was given between six months and three years to live.
In a statement, William and Kate said: “We are so sorry to hear that Liz Hatton has sadly passed away. It was an honour to have met such a brave and humble young woman.
“Our thoughts and prayers are with Liz’s parents Vicky and Aaron and her brother Mateo at this unimaginably difficult time. W & C.”
Announcing her death on X, her mother Vicky Roboyna said: “Our incredible daughter Liz died in the early hours of this morning. She remained determined to the last.
“Even yesterday, she was still making plans. We are so very proud of the kindness, empathy and courage she has shown in the last year.
“She was not only a phenomenal photographer, she was the best human and the most wonderful daughter and big sister we could ever have asked for.
“No one could have fought harder for life than she did. There is a gaping Liz-shaped hole in our lives that I am not sure how we will ever fill.”
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She asked people to share one of Liz’s photos in tribute using the hashtag #LizHatton and to support the family’s mission to fund research into desmoplastic small round cell tumours, which Liz was diagnosed with.
She has set up a JustGiving fundraising page with a goal of raising £100,000.
In a personal message on social media after meeting Liz in October, William and Kate said: “A pleasure to meet with Liz at Windsor today.
“A talented young photographer whose creativity and strength has inspired us both. Thank you for sharing your photos and story with us. W&C.”
Ticking off items from her bucket list, Liz went on to photograph comedian Michael McIntyre, the red carpet at the MTV Europe Music Awards, the London Air Ambulances from a helipad and joined acclaimed photographer Rankin in leading a fashion shoot.