Among her meagre achievements, Rachel Reeves often boasted of having presided over six cuts to interest rates. If politicians are to take credit for decisions of the Bank of England then they must take the blame for rising rates too. As Emmanuel Igwe wrote this week, the unanimous vote from the Monetary Policy indicates that they no longer think energy prices are a blip, but that inflation has become endemic. The markets may continue to regard the British economy as the best of a bad bunch, but only they have every confidence the Chancellor will raise taxes to keep it under control.
Indeed the deputy Prime Minister explicitly said from the despatch box this week that she has no plans to make welfare spending cuts in this parliament.
For households, whose mortgages have just gone up amidst a cost of living squeeze, that’s a disaster.
It could hardly be clearer that this is a government who only recognises fiscal levers marked ‘tax’ and ‘spend’.
Here are some of the best pieces from this week’s City AM opinion pages. Enjoy and have a great weekend.
Alys
Britain is hooked on Halloween and Traitors – and that’s a recession indicator
Just after 8pm last Saturday, it struck me that every single person on the Northern line train to Tooting was not just in a Halloween costume, but in an elaborate Halloween costume. We’re not talking about low-effort zombie boys with muscle-revealing t-shirt rips, or girls dressed as scary bunnies.
Instead, the carriage was full of high effort, expensive and self-consciously un-flattering garb. Costumes that wouldn’t have looked out of place at Maya Jama’s Halloween party. Last weekend, the ascendant TV star underwent a full transformation, helped by an extensive team, to become the spitting image of Olympic gold medallist and national treasure Mo Farah. Jama proved that a step-change is complete: People are willing to put major effort, imagination and funds into dressing up for Halloween.
And I mention Maya Jama because she is becoming a fully-fledged national treasure herself, following a barnstorming run on Celebrity Traitors. The game show format rivals Strictly and the World Cup with 10m+ viewership figures straight out of the 20th century. Surely, no media watcher a decade ago could have predicted that an elevated parlour game could so totally capture the public imagination.
But, perversely, the strength of our finest TV format reveals a weakness in our economy: Brits are indulging in a world of pretend, says Matt Kenyon
Trump is wounded but not finished – that’s a problem for Burnham
President Trump was never going to retire quietly, nor accept the blame for the Republicans’ midterm losses. As Democrats swept both chambers of Congress, his defence was that his name was not on the ballot. Candidates who spent months fighting uphill campaigns against historically high petrol prices, in a nation where nearly nine in 10 drive to work, will see it very differently.
Nevertheless, Tuesday’s result fired the starting gun on Trump’s lame-duck presidency. Having lost Congress, and with it the confidence of his party’s most motivated voters, he will find his authority tested soon. Vice-President JD Vance and secretary of state Marco Rubio will probably begin jostling to define post-Trump Republicanism. That will not sit well with a President obsessed with how others perceive his power and authority, says Michael Martins
Weil Gotshal collapse exposes the fragility of law firm partnerships
Law firm partnerships are inherently fragile due to their lack of residual equity value and transactional cultures, making them susceptible to sudden partner departures and bank-like runs – and proposed government restrictions on non-compete clauses will make it worse, says Stephen Phillips
A rate rise is the right decision, but stop blaming Iran
The war in Iran has been central to the Bank of England’s considerations around interest rates for the most of this year. In September, only three of the nine members of the Monetary Policy Committee (MPC) voted to raise rates. But this changed this week as, for the first time since August 2023, all nine members voted to increase the Bank Rate. Although eight members supported the rise from 3.75 to four per cent, Catherine Mann wanted the Rate increased to 4.25 percent. The Bank settled on an increase to four percent.
This decision does not come as much of a surprise to the markets, though the unanimity was unexpected. Economists had expected a seven-two split, with those not voting for an increase assumed to support a hold. A unanimous vote reveals something important: the Bank does not consider energy shocks to be a temporary blip. During the press conference, the Bank admitted that, although the shock has not yet passed through to wider wages and prices, it did not want to sit idle and wait until it does, says Emmanuel Igwe
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