Sir Keir Starmer has insisted that Rachel Reeves will be chancellor for “many, many years” as he was challenged by Kemi Badenoch over her future at PMQs.
After market turmoil saw the cost of government borrowing soar to a decades-high, the Tory leader warned that “markets clearly do not” share Sir Keir’s confidence in his chancellor and pressed him to rule out further tax rises in an emergency Budget.
Dodging this call, the prime minister retorted: “We can’t just tax our way out of the problems they left us.”
The fiery Commons exchange came after a surprise fall in inflation to 2.5 per cent gave a boost to the under-fire chancellor and prompted the markets to bet more heavily on the Bank of England cutting interest rates in February, giving some relief to the turbulence in the UK government bond markets.
It came as Nigel Farage’s Reform and rightwing Tories united in a plot to delay Sir Keir’s Chagos Islands deal until after Donald Trump’s inauguration – a move one insider told The Independent had “laid the groundwork for potential cooperation between Reform and the Conservative Party”.
Key Points
- Kemi Badenoch claims markets don’t have confidence in Rachel Reeves
- ‘Relief’ for Downing Street as UK inflation in surprise fall to 2.5%
- Chancellor given second boost as US inflation data calms markets further
- Exclusive: Nigel Farage and rightwing Tories unite in Chagos Islands plot
- Tulip Siddiq resigns as anti-corruption minister
£4bn investment into UK unveiled as Starmer meets with Malyasian PM
15:25
Andy Gregory
Sir Keir Starmer met his Malaysian counterpart Anwar Ibrahim in Downing Street for trade talks as part of the Labour government’s scramble for investment and economic growth.
The meeting came as Malaysian firm YTL announced plans for £4bn of investment in the UK over five years, including £2bn for its arena and housing development north of Bristol. The remaining £2 billion will be invested in YTL’s UK businesses over the next five years, the government said.
Chancellor Rachel Reeves said the investment “will boost growth, create good jobs and shows the UK is open for business”, adding: “We will continue to go further and faster to kickstart growth to make all parts of the country better off.”
The Brabazon Bristol project, on the site of the former Filton airfield in South Gloucestershire, is one of the biggest brownfield redevelopments in the UK. It will eventually involve 6,500 properties, three new schools and a 19,500-capacity arena.
Kemi Badenoch will keep every member of shadow cabinet for next four years, spokesperson claims
15:00
Andy Gregory
Every member of Kemi Badenoch’s top team will remain in post until the next election, a spokesperson for the Tory leader has claimed.
Under pressure from Ms Badenoch at PMQs, Sir Keir Starmer said his chancellor Rachel Reeves would be in post for “many, many years”, as he sought to dispel rumours she could be shuffled out of the job.
Speaking to reporters after the Commons exchanges, a spokesperson for the Tory leader said Mel Stride would also remain as shadow chancellor until the next election.
When pressed, he signalled the same was true of all members of the shadow cabinet, adding: “We are very happy with our shadow cabinet as it is, thank you.”
US inflation data provides further boost for chancellor Rachel Reeves
14:42
Andy Gregory
The value of the pound has risen and cost of UK borrowing tumbled in a further boost to chancellor Rachel Reeves, as new data showed US core inflation falling faster than expected.
Dollar
— Faisal Islam (@faisalislam) January 15, 2025
falling too on expectations of quicker rate cut there… GBPUSD now back above $1.23 having been $1.21 yesterday afternoon.
UK 5y down 15bps below 4.5% (though this is still well up on OBR assumption on 4)
UK yields falling the most today so far, then Italy, then US
Minister would be ‘very happy’ to work again in government with Tulip Siddiq
14:28
Andy Gregory
The chief secretary to the Treasury has said he would be “very happy” to work again with Tulip Siddiq – who resigned as a minister yesterday, in line with a suggestion by the PM’s ethics’ adviser – if Sir Keir Starmer were to bring her back into government.
Darren Jones insisted that the situation did not show a lack of judgment from Sir Keir, but rather that the new ministerial standards watchdog process was working.
“I don’t think there’s a question about the prime minister’s judgment,” Mr Jones told Times Radio. “The independent process has been followed. It concluded, and Tulip took the decision to step down from government.”
He added: “Tulip did a great job as City minister. She hasn’t broken any rules. The Prime Minister was clear in his letter to Tulip that he would like to see a circumstance in which she can come back into government in the future.”
No 10 confirms it will not ink Chagos Islands deal until Trump inauguration
14:11
Andy Gregory
Confirming recent reporting, Downing Street has now indicated that the UK will not sign off a deal to relinquish control of the Chagos Islands to Mauritius until Donald Trump’s new US administration is installed.
“We will only agree to a deal that is in the UK’s best interests and protect our national security,” the prime minister’s official spokesperson said when asked about reports the Mauritian government is seeking further talks.
He added: “It is obviously now right that the new US administration has the chance to consider this and discuss this once they are in office.”
Asked if this meant the UK would not sign a deal before Tuesday – when Mr Trump will have officially begun his presidency – the spokesperson replied: “You can take from what I have just said about that – the new US administration.”
He steered away from suggestions Mr Trump would have a “veto” on the deal, and also said: “It is perfectly reasonable for the new US administration to actually consider the detail and we will obviously have those discussions with them.”
Government set to reintroduce controversial university free speech law
13:54
Andy Gregory
Legislation to protect freedom of speech on university campuses is back on the government agenda, after Labour initially halted plans due to concerns over student welfare.
The Higher Education Freedom of Speech Act offered a number of controversial powers, as the regulatory Office for Students (OfS) could fine and sanction universities, higher education providers and student unions for failing to uphold free speech.
The Act, passed by the previous Tory government, also offered a complaints scheme for students, staff and visiting speakers to seek compensation if they suffered from a breach of the university’s free-speech obligations.
Its aim was for universities to “secure” and promote the importance of freedom of speech and academic expression on campuses.
A government source told the BBC that the legislation would begin again to become workable, although it remains unclear how the Act may be adapted from what was originally suggested.
Bryony Gooch reports:
Farage and Liz Truss attend launch of climate denial group led by ex-Ukip head
13:36
Andy Gregory
Nigel Farage and Liz Truss were spotted attending the launch of the UK branch of a climate denying lobby group, set to be headed up by a former Ukip leader.
The Heartland Institute, a US based lobby group which has previously made extreme statements sceptical of climate change, launched its UK-EU branch last month, based in London.
Mr Farage, who was the guest of honour at the launch, was joined by former prime minister Ms Truss and Tory shadow trade minister Andrew Griffith.
Former Ukip leader Lois Perry, who is set to lead the new branch, has previously described the climate emergency as “a scam”. Announcing the launch, Heartland - which has links to the Trump administration - boasted that it is “the world’s most prominent think tank supporting scepticism about man-made climate change”.
Our political correspondent Millie Cooke has more in this report:
Exclusive: Right-wing Chagos Islands plot 'lays ground for future Farage-Tory cooperation’
13:20
Andy Gregory
A right-wing plot to torpedo Sir Keir Starmer’s chances of concluding his Chagos Islands deal prior to Donald Trump’s inauguration has “laid the groundwork” for further collaboration between Nigel Farage and the Tories, an insider has suggested.
Conservative Post editor Claire Bullivant, one of the organisers and signatories of the open letter voicing their opposition to the deal, told The Independent that the efforts had wider significance beyond the row over the Chagos Islands.
She said: “This has laid the groundwork for potential cooperation between Reform and the Conservative Party.”
Our political editor David Maddox has more details:
First minister hints at major new rail funding for Wales
13:05
Andy Gregory
The UK Government has recognised Wales has been “hard done by” in terms of rail funding as a result of HS2 and extra cash is coming, the country’s first minister has said.
Speaking on a BBC Radio Wales phone-in show, Eluned Morgan said: She said: “If I think we are being hard done by then I speak up and I speak up on every occasion. HS2, the rail link between north and south England, they have poured money into that and for some reason, they classified it as an England and Wales project even though not one inch of track was laid in Wales. That for me is a fundamental injustice.
“For the first time, the UK Government has recognised that we have been underfunded. [We’ve had] a letter from Heidi Alexander saying, ‘okay, something isn’t right here’. Now there is a discussion about what we are going to do about it, ‘where are your projects so we can invest’.”
She said the funding was likely to come in the form of new stations and rail infrastructure, but did not specify where. Asked how much funding Wales is going to get she said she hopes “it’s going to be significant” but did not specify an amount.
“We haven’t got to the numbers, but I can’t tell you what a massive step forward this is,” she said. “For the first time they’re recognising ‘you’ve been hard done by.”’
Exclusive: Farage and Truss in rightwing plot to derail Chagos Islands deal at the last minute
12:46
Andy Gregory
Frantic cross-Atlantic discussions took place over the last week between rightwing Tory and Reform politicians and Donald Trump’s team to try to ensure Keir Starmer did not complete a deal with the Chagos Islands before the US inauguration on Monday.
With president-elect Trump seeking to block or even veto the deal to hand over the British Indian Ocean colony to Mauritius, the hope had been that Sir Keir would be prevented from landing an agreement before he is sworn into office on Monday.
The revelation came as Kemi Badenoch branded the agreement as “a dumb deal” in prime minister’s questions (PMQs), asking “Why does the prime minister think the British people should pay for something they already own?”
The UK organisers of the efforts to prevent a handover to Mauritius broke cover on Wednesday with an open letter signed by 23 leading figures on the right including Nigel Farage, a number of other Reform MPs, former Tory PM Liz Truss, Tory ex-home secretary Suella Braverman, and former Reform leader Ben Habib.
It is understood that the letter was also backed by Tory leader Kemi Badenoch although she did not sign it.
Our political editor David Maddox has the full exclusive report:
Labour MP in rare public challenge to Starmer to save Grangemouth refinery
12:34
David Maddox, Political Editor
Brian Leishman, the Labour MP for Alloa and Grangemouth, has just woken a few people up with a very rare robust challenge of his party leader and prime minister at PMQs.
Mr Leishman represents Grangemouth where billionaire Jim Ratcliffe is planning on closing down the refinery – a major issue in his constituency.
Since the election many Labour MPs have been accused of avoiding public confrontation with the prime minister on a number of issues including two child benefit and winter fuel payments as well as constituency interests.
Too many have looked like they are trying to toady up to their boss for future preferment but not Leishman.
He told the prime minister that “now we are in power” he should use his power to stop the closure for Scotland’s and Britain’s interests.
Ed Davey calls for new visa for Americans fleeing Donald Trump
12:29
Kate Devlin, Whitehall Editor
The Liberal Democrat leader challenged Keir Starmer to boost economic growth by attracting highly skilled workers from the US.
He told the prime minister that affluent Americans are trying to flee Trump’s America and would like to come to Britain.
But he said many were struggling to find a way to move to the UK.
He urged the Labour leader to create a new visa “to bring their money and skills so we can grow our economy and pay for public services”.
Defiant Starmer mocks Liz Truss over cease and desist letter
12:27
Millie Cooke, Political Correspondent
A defiant Keir Starmer has mocked former prime minister Liz Truss, after she sent him a cease and desist letter demanding he stop saying she “crashed the economy”.
“I got a letter this week from a Tory voter in a Labour seat, I hope they don’t mind me saying who it was”, the prime minister joked at PMQs.
“It was Liz Truss. It wasn’t written in green ink but it might as well have been.
“She was complaining that saying that she crashed the economy was damaging her reputation. It was actually crashing the economy that damaged her reputation.”
Ministers will put in place legislation to stop Gerry Adams claiming compensation, Starmer says
12:26
Millie Cooke, Political Correspondent
Keir Starmer has said the government will put in place new legislation that will seek to stop Gerry Adams from claiming compensation.
“The legacy act … was unfit, not least because it gave immunity to hundreds of terrorists”, the prime minister said.
He added: “The court found it unlawful. We will put in place a better framework. We’re working on a draft remedial order rand replacement legislation. And we will look at every conceivable way to prevent these types of cases claiming damages, and its important I say that on the record.”
Starmer challenged to ensure UK authorities assist Bangladeshi probe into former UK minister
12:25
Andy Gregory
Turning her focus to the resignation of Tulip Siddiq, Kemi Badenoch noted that, at a time of turmoil in the markets, the PM was distracted by the crisis surrounding the former City minister.
The Tory leader said: “What does it tell us about his judgement that yesterday he said he was saddened that his close friend resigned? This was an anti-corruption minister under investigation for corruption.
“Mohammad Yunus, the Nobel Prize-winner advising Bangladesh said that London properties gifted to the former City minister may be proceeds of robbery.
“So will the prime minister offer Bangladesh the full support of our National Crime Agency in ensuring any properties bought with stolen funds are properly investigated?”
Sir Keir Starmer replied that there was no breach of the ministerial code.
Analysis | Keir Starmer dodges call to rule out tax rises this year
12:20
Kate Devlin, Whitehall Editor
Kemi Badenoch has struggled at PMQs since she became Tory leader late last year.
But she did appear to score a hit against the prime minister, when Keir Starmer dodged her call to rule out tax rises later this year.
He did, however, tell Ms Badenoch: “We can’t just tax our way out of the problems they [The Conservatives] left us”.
It comes after difficult days for the government on the economy.
As the cost of government borrowing rises the PM and his chancellor Rachel Reeves have come under increasing pressure over their plans.
On Tuesday, Ms Reeves did not rule out emergency spending cuts to deal with the aftermath of the recent market turmoil.
Starmer rejects talk of emergency Budget
12:19
Andy Gregory
The prime minister has appeared to rule out an emergency Budget to deal with the elevated cost of UK government borrowing.
Sir Keir Starmer told the Commons: “We have one Budget, that’s what we’re committed to – strong fiscal rules, and we’ll stick to them, unlike the party opposite.”
Keir Starmer firmly backs Rachel Reeves amid questions over her position
12:17
Millie Cooke, Political Correspondent
Sir Keir Starmer has thrown his weight behind Rachel Reeves, saying she will be in her post for “many, many years to come”.
It comes amid growing pressure on the chancellor amid turbulence in the economy, with Kemi Badenoch using PMQs to argue that the “markets clearly do not” have confidence in the chancellor.
Responding, the PM said: “She’ll be pleased to know the chancellor will be in place for many, many years to come.”
Badenoch grills Starmer over Chagos Islands deal
12:16
Andy Gregory
Pointing to borrowing costs hitting a 27-year high, Kemi Badenoch said: “The chancellor is apparently promising to be ruthless in reducing spending.
“Let me suggest something that he should cut – there is no way that we should be giving up British territory in Chagos. He is rushing a deal which will be disastrous and will land taxpayers with a multibillion pound bill.
“Why does the prime minister think British people should pay to surrender something that is already ours?”
Sir Keir Starmer said his government inherited a situation where a vital military base was under threat due to legal challenges, and noted that negotiations were started under the previous Tory government.
“The then-foreign secretary came to this House to say why he was starting negotiations and what he wanted to achieve, and he said the aim was to ‘ensure the continued effective operation of the base’. That is precisely what this deal has delivered,” said the PM.
Ms Badenoch retorts that “there is no one he can blame for this dud deal than himself”.
Starmer refuses to be drawn on promise not to raise taxes further this year
12:11
Andy Gregory
Kemi Badenoch pointed to the BRC survey suggesting two thirds of businesses will have to raise prices to cope with Labour’s tax rises, accusing the chancellor of “ignoring all the warnings and ploughing ahead with an unprecedented borrowing spree, leaving all of us more vulnerable”.
The Tory leader said: “The prime minister refused to repeat his chancellor’s promise that he wouldn’t come back for more. Will he now rule out any new tax rises this year?”
The PM replied that the Budget took “the right and difficult decisions” ignored by the Tories, adding: “When it comes to tax, she knows very well the limits of what I can say from this despatch box. But we have an ironclad commitment to our fiscal rules.
“We can’t just tax our way out of the problems they left us.”
Starmer accuses Tories of ‘magic money tree’ as he defends ‘vital’ Budget
12:08
Andy Gregory
Kemi Badenoch starts by asking why anyone should trust a word Sir Keir Starmer says over businesses warning that the Budget “means fewer jobs, lower growth and higher borrowing costs”.
The PM responds that the global economy is experiencing volatility, adding that this was why the measures in the Budget were vital to get Britain’s “finances back in order”.
“Vital to stability, vital to growth, and we’ve got an ironclad commitment to our fiscal rules,” the PM said, accusing the Tories of lacking the bravery to take difficult decisions.
“They’re back to the magic money tree – she wants all the benefits of the Budget, but she can’t say how she’s going to pay for them. They haven’t changed a bit. They’re still economic vandals and fantasists. Imagine where we’d be if they were still in charge.”
Sir Keir Starmer extends congratulations to Donald Trump
12:05
Andy Gregory
Sir Keir Starmer has opened PMQs by extending his thanks to outgoing US president Joe Biden, and congratulating Donald Trump, five days ahead of the latter’s inauguration.
Bridget Phillipson dodges question on impact of private school tax raid
11:57
Andy Gregory
Bridget Phillipson failed to spell out the full impact of the government’s private school VAT raid, dodging the question when asked about the possible implications for special education schools.
While she said the government has “looked at all of the potential impacts”, her answer failed to provide any real detail on the expected consequences.
It comes as parents and schools complain about the implications of the tax raid, which came into force on New Year’s Day and is expected to raise £1.5bn for the Treasury.
Our political correspondent Millie Cooke reports:
Starmer to face Badenoch at PMQs after Treasury minister resigns
11:50
Andy Gregory
Sir Keir Starmer is set to face Kemi Badenoch at PMQs.
The Tory leader will have plenty of ammunition following the resignation of anti-corruption minister Tulip Siddiq on Tuesday evening, recent economic turmoil, and controversy over the Chagos Islands deal.
Treasury minister quizzed on ‘Hunger Games’-style spending review
11:48
Andy Gregory
Chief secretary to the Treasury Darren Jones has been quizzed on Good Morning Britain over plans for “Hunger Games”-style discussions over ministerial budgets, as UK bond market pressures raise the prospect of further spending cuts.
Warning of looming cuts to public spending, host and former Labour Treasury minister Ed Balls said: “There are reports in the newspapers that you are planning a novel approach. I’ve been involved in lots of spending reviews – I’ve never heard of this before.
“You’re going to get groups of cabinet ministers in a room and if they don’t offer up big enough cuts, you’re going to ask them to tell other cabinet ministers what cuts they’re going to have to make. It sounds like the Hunger Games. Is this a joke, or is it actually what you’re going to do?”
Rejecting this and joking that Balls could host such a show, Mr Jones said: “For the first time in 17 years, we’re doing what’s called a zero-based review, so every department is having to look at every pound they spend, and make sure it’s aligned with the priorities of this government.
“So those group discussions we’re having – we’re calling them ‘clusters’ in the Treasury – is where secretaries of state from different departments have to offer up parts of what their department does in order to deliver the outcomes that we expect.
“That’s about getting them to work together and make sure they’re prioritising the over a trillion pounds that we spend every year as a country on the people’s priorities and not just things that have been carrying on for years.”
'It sounds like the Hunger Games. Is this a joke?'@edballs challenges the Chief Secretary to the Treasury Darren Jones over reports about how the government plans to tackle spending reviews. pic.twitter.com/wV4lZX2Qp7
— Good Morning Britain (@GMB) January 15, 2025
Watch: Tory confronted over 'pot, kettle, black' criticism of Tulip Siddiq
11:22
Andy Gregory
Inflation data merely a ‘temporary reprieve’, analyst says
11:21
Andy Gregory
Rob Wood, chief UK economist for Pantheon Macroeconomics, said: “Inflation fell in December because of a huge temporary drop in airfares inflation, driven by an early CPI collection date, and an erratic fall in accommodation services.
“Both will reverse in January, so the dovish news today is a temporary reprieve.”
House prices rises accelerated in November, new data shows
11:03
Andy Gregory
Annual house price growth accelerated to reach 3.3 per cent in November, up 0.3 per cent upon the previous month, according to new Office for National Statistics data – taking the average UK property value in November to £290,000.
Average house prices increased in England to £306,000 and £219,000 in Wales, with both countries seeing 3 per cent annual growth. In Scotland, prices rose 4.7 per cent to hit an average of £195,000, and in Northern Ireland rose to £191,000 in the third quarter of 2024, up 6.2 per cent upon the previous year.
Inflation will remain above Bank of England’s 2 per cent target this year, predicts CBI
10:57
Andy Gregory
Inflation will stay above the Bank of England’s 2 per cent target this year, partly as a result of the chancellor’s Budget pushing up prices, the Conferation of British Industry has suggested.
Martin Sartorius, principal economist at the CBI, said: “Inflation remained moderately above the Bank of England’s 2 per cent target in December, reflecting the impact of ongoing price pressures such as strong wage growth.
“Looking ahead, we expect inflation will stay elevated this year, partly due to Autumn Budget measures contributing to higher prices.
“Persistent, above-target inflation supports our expectation that the Monetary Policy Committee will loosen policy at a gradual, quarterly pace throughout 2025. The next rate cut is still likely to come in February, which will bring some respite for businesses and households as they continue to face high borrowing costs.”
Germany’s economy shrinks for second consecutive year
10:43
Andy Gregory
Germany’s economy shrank for the second consecutive year in 2024, highlighting the depth of the downturn gripping Europe’s biggest economy and, to some degree, the struggle facing the UK government in securing tangible growth.
Germany’s economy shrank by 0.2 per cent over the full year and by 0.1 per cent in the final quarter, the Federal Statistics Office said on Wednesday, suggesting little sign of an imminent reprieve.
“Cyclical and structural burdens stood in the way of better economic development in 2024,” said Ruth Brand, president of the statistics office, pointing to increasing competition from abroad, high energy costs, elevated interest rates and uncertain economic prospects.
Germany’s economy also shrank by 0.3 per cent in 2023. The last time it suffered two consecutive years of contraction was in the early 2000s.
Union chief urges Bank of England to heed ‘dangers of keeping interest rates high for too long'
10:42
Andy Gregory
The head of the Trades Union Congress has urged the Bank of England to cut interest rates following the latest data showing a surprise fall in inflation.
“Inflation has shown further falls and is not only down on the month, it also remains below where the Bank of England thought it would be a year ago,” said TUC chief Paul Nowak.
“The government has made the right call on big economic decisions – boosting public investment and prioritising working people’s incomes – but the Bank of England must keep playing its part too.
“The [European Central Bank]’s chief economist recently warned of the dangers of keeping interest rates high for too long. It’s time for the Bank of England to act with another interest rate cut at the start of February.
“This matters for hard-pressed working people and businesses – more money in people’s pockets means more money spent on our ailing high streets and lower interest rates would make it easier for firms to invest.
“After over a decade of economic failure from previous Conservative governments, restoring decent growth rates will be no small task – but it must remain a national priority. We cannot continue with the same broken status quo.”
Comment | Starmer hopes to be saved by two bells – high flying twins Torsten and Olaf
10:36
Andy Gregory
With the economy on the ropes and the clock running down to find an answer you cannot blame Keir Starmer for hoping his battered administration might be saved by the bell, writes Simon Walters.
It appears he is counting on being saved not by one bell but two Bells. In the space of 24 hours twin brothers Torsten and Olaf Bell, aged 42, have become two of the most influential members of Starmer’s revamped team.
Torsten Bell, who entered the Commons in July, has been made pensions minister in the wake of Tulip Siddiq’s resignation. It comes just 24 hours after his non identical twin, career civil servant Olaf was made head of the Downing Street policy unit.
Despite their relative young age both are economic heavyweights with vast experience of tackling complex financial issues.
As pensions minister Torsten Bell will have a major input into key economic decisions. He was an adviser to Gordon Brown and later ran the respected Resolution Foundation think-tank.
Like his brother, Olaf Henricson-Bell is no stranger to trying make the numbers add up at the Treasury. As a civil servant he has worked closely with three Tory Chancellors, Philip Hammond, Sir Sajid Javid and Rishi Sunak.
Looming US inflation data could further impact global borrowing costs
10:19
Andy Gregory
While this morning has seen good news for the value of the pound and gilt yields, a further potential bump in the road is scheduled this afternoon.
United States inflation data is due at 1:30pm, and could send government borowing costs higher around the world, including in Britain.
Currys boss hits out at ‘unhelpful’ tax hike in Budget
10:14
Andy Gregory
Government interventions have been “quite unhelpful” in increasing costs for an “overburdened” retail sector, the chief executive of Currys has said, in an apparent swipe at the employers national insurance hike announced in the chancellor’s autumn Budget.
Asked on BBC Radio 4’s Today programme what he had heard from other retailers regarding their financial outlooks, Alex Baldock said: “It’s a mixed picture.
“So I mean, for us, our stores are really important alongside online - I mean, that’s how customers want to shop through a mix of both and so our stores remain really important to us and contributed well to a strong peak performance.
“On the other hand, of course, there are plenty of cost increases hitting retailers who employ large numbers of people, and as we said a few weeks ago, we think some of the Government interventions have been quite unhelpful in that respect, in loading more costs onto an already overburdened sector.
“But you know, if we have to run up and down escalators, so be it, we’re quite used to that over the past few years, and we at Currys have shown with these strong results that we can do so.”
Consumer confidence ‘remains very patchy’, Currys boss warns
09:53
Andy Gregory
Consumer confidence and spending “remains very patchy”, the chief executive of electrical retailer Currys has said.
Asked about his outlook for the high street chain for 2025, Alex Baldock, told BBC Radio 4’s Today programme: “We’re more confident in our businesses prospects.
“I mean, these are strong peak results building on a strong first half performance and as you said, we’re more confident in the profit outlook for our business.
“But I think that’s more to do with the work that we’ve done, rather than any help from the external environment, which remains very patchy in terms of consumer confidence and spending.”
Cost of UK government borrowing falls slightly after new inflation data
09:41
Andy Gregory
In further good news for the chancellor, the cost of UK government borrowing fell slightly as the markets bet on a further Bank of England interest rate cut, following Wednesday’s surprise fall in inflation.
Traders now see around an 80 per cent change of a 25-basis point easing in February, up from around 60 per cent before the latest inflation data – in a shift which supported under-fire British government bonds, known as gilts.
In a boost for Downing Street, 10-year gilt yields dropped 6 basis points at 4.82 and the rate sensitive two-year yield was down nearly 8 basis points, outperforming German and US peers.
Gilts have been at the centre of a global government bond selloff this month as higher borrowing costs threaten the government’s strained finances.
Chief Secretary to the Treasury admits more work to be done on inflation
09:24
Andy Gregory
FTSE given boost as inflation unexpectedly slows
09:12
Andy Gregory
British stocks have been given a boost after data showed UK inflation unexpectedly slowed in December and core measures of price growth fell more sharply.
The FTSE 100 added 0.7 per cent early on Wednesday morning, outpacing its European peers, while the FTSE 250 midcap index jumped 1.5 per cent.
Markets expect Bank of England to cut interest rates in February
09:00
Andy Gregory
Traders currently see a more than 82 per cent of the Bank of England cutting interest rates in February, and about 50 basis points of easing by the end of the year, Reuters reports, citing London Stock Exchange Group data.
“The Bank of England will likely feel emboldened to continue its easing cycle in February. And rate cut expectations further out should ease on the back of today’s data,” Sanjay Raja, Deutsche Bank’s chief UK economist told the news agency.
Inflation could still exceed 3 per cent in coming months, analyst says
08:53
Andy Gregory
The surprise decline “provides some timely respite amid the financial markets turmoil”, said Suren Thiru, economics director for the Institute of Chartered Accountants.
But he added that “any relief could be short-lived” due to inflation pressure growing this year.
“Despite December’s unexpected decline, the near-term outlook for UK inflation remains ominous with higher energy bills likely to push the headline rate above 3 per cent over the coming months, aided by April’s expected rise on Ofgem’s energy price cap,” he said.
Minister hits out at ‘unfair’ pressure on Rachel Reeves over market turmoil
08:42
Andy Gregory
The pressure on Rachel Reeves over turmoil in the markets is “unfair”, the chief secretary to the Treasury has said.
“I think it’s unfair. Look, the chancellor is doing a brilliant job,” Darren Jones told LBC, adding that a lot of issues in the markets are down to “global movements”.
“The first thing to say, as I’m always reminded, is ministers don’t comment on market movements, but what I will say is that a lot of this is down to global movements in international markets. Other countries are facing similar challenges,” he said.
The chancellor’s fiscal rules are the “right approach from the chancellor in difficult global economic circumstances, and with a difficult inheritance that we had from the last government”, he said.
Government must make ‘tough decisions’ on spending, minister says
08:36
Andy Gregory
Chief Secretary to the Treasury Darren Jones acknowledged that “tough decisions” on spending would be required as the government grapples with high borrowing costs.
He told BBC Breakfast: “There’s a lot happening globally and as ministers we don’t give a running commentary on the market, because we take the price in the market, we do accept the price in the market.
“But there’s no denying that this government inherited an economy from the Conservatives that had a high amount of debt and low growth and that’s why we have got non-negotiable fiscal rules where under this government, day-to-day spending for public services must be met by tax receipts, not by borrowing.
“People at home know you can’t just keep borrowing every month to pay the bills. And where we do borrow to invest in the country’s infrastructure, the debt has to be falling as a size of the economy over the next five years.
“Those fiscal rules are non-negotiable. That means there are tough decisions for the Chancellor and this government to take. “
Services inflation drops sharply in boost for chancellor
08:22
Andy Gregory
A 1.9 per cent decrease in the price of hotels, and a slower increase in prices across restaurants and cafes put the most downward pressure on overall inflation, while the cost of air fares also rose at a much slower rate in December, the ONS said.
This helped services inflation – a metric closely watched by the Bank of England – fall to 4.4 per cent in December, from 5 per cent in November.
On the other hand, petrol and diesel prices increased in December, compared with November.
Grant Fitzner, the ONS’s chief economist, said: “Inflation eased very slightly as hotel prices dipped this month, but rose a year ago. The cost of tobacco was another downward driver, as prices increased by less than this time last year.
“This was partly offset by the cost of fuel and also second-hand cars, which saw their first annual growth since July 2023.”
Inflation data could pave road to more interest rate cuts, ex-Bank of England policymaker says
08:15
Andy Gregory
New inflation figures may pave the way to “slightly more interest rate cuts”, a former Bank of England policymaker has said, in a boost for mortgage-holders.
Michael Saunders told BBC Radio 4’s Today programme: “What we’ve seen in the last month or so is global interest rates rise very sharply, led by the US, and that’s rippled through to the UK, and markets are now pricing in really only a couple of cuts, perhaps even slightly less than that.
“That’s where they were last night, before these figures. Now, these figures bring inflation back in line with what the Bank of England has been expecting.”
He added that, if inflation rates continued at this level, the market would be “on the route to slightly more interest rate cuts”.
Treasury minister rules out March budget
07:58
Alexander Butler
Chief Secretary to the Treasury Darren Jones said there would not be a mini-budget in March.
He told Times Radio: “We’ve been very clear there’s only going to be one major fiscal event, Treasury language for a budget, a year. We did that in the autumn last year.
Pressed on whether he was ruling out a mini-budget, he said there would be a spring statement on March 26.
“But we will only be having one major fiscal event a year, budget, and that will be in the autumn.”
Watch: Tory confronted over ‘pot, kettle, black’ criticism of Tulip Siddiq
07:48
Alexander Butler
PM's 'plan is working', Treasury minister insists
07:40
Alexander Butler
Chief secretary to the Treasury Darren Jones has insisted the prime minister’s plan for the economy is working as inflation fell to 2.5 per cent.
“Inflation coming down is good news for families across the country, we know the cost of living is still a problem for lots of people,” he told Sky News.
No 10 will be breathing a ‘sigh of relief'
07:31
Alexander Butler
Downing Street will be breathing a “sigh of relief” after UK inflation unexpectedly fell last month, a former Bank of England policymaker said.
Speaking to BBC Radio 4’s Today programme, economist Michael Saunders said of the new figures: “I think you can hear a sigh of relief coming out from Downing Street, the Bank of England and across financial markets as a whole.
“To be sure, inflation is a little bit above the 2% target, but markets have been expecting today’s figure to be stable or higher and it came in a little lower than expected with services inflation, which the Bank of England is closely focused on, sharply lower than the previous month.”
