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Bank accused of ‘political decision’ to hold interest rates

The Bank of England has left interest rates unchanged for the seventh straight meeting
The Bank of England has left interest rates unchanged for the seventh straight meeting - NEIL HALL/EPA-EFE/Shutterstock

The Bank of England has been accused of making a “political decision” after holding interest rates at a 16-year high despite inflation falling to its target.

Conservative MPs accused officials on the Monetary Policy Committee (MPC) of being unfairly and unduly swayed by the upcoming election.

Rishi Sunak’s last hope of a cut to borrowing costs before the general election was dashed on Thursday after the MPC voted to keep interest rates at 5.25pc.

The decision to maintain borrowing costs at the same level for the seventh consecutive meeting came despite inflation falling back to the Bank’s 2pc target this week.

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Sir Jacob Rees-Mogg, a former business secretary, said: “It is a political decision by the Bank of England. Inflation is now on target and rates need to be cut.

“That we are in an election period ought to make no difference but the Bank has made a decision based on short-term politics rather than economics.”

The minutes of the MPC’s latest meeting said the election “was not relevant” to the decision to hold interest rates unchanged.

“The committee noted that the timing of the general election on 4 July was not relevant to its decision at this meeting, which would as usual be made on the basis of what was judged necessary to achieve the 2pc inflation target sustainably in the medium term,” the minutes said.

However, Bob Blackman, a senior Conservative standing for re-election, said: “You’ve got to ask the question why they are not cutting. They have got to justify the decision not to cut interest rates.”

Danny Kruger, a Conservative MP and former member of the Treasury select committee, said the Bank had held rates too high for too long. He said: “Rates should have come down at the last meeting and it’s a great shame the MPC are holding off yet again.

“Inflation is now back to target and businesses and mortgage holders badly need a rate cut to get the economy growing again.”

Andrew Bailey, the Bank’s Governor, said borrowing costs needed to stay higher for longer to squeeze lingering price pressures out of the economy. While headline inflation has fallen back to target, prices in the dominant services sector are still rising faster than officials would like.

Mr Bailey said: “It’s good news that inflation has returned to our 2pc target. We need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25pc for now.”

The Bank’s decision also faced criticism from the Left. George Dibb, an economist at the Left-leaning think tank the Institute for Public Policy Research, said high rates were holding back the economy.

He said: “The Bank of England has tightened the screws too much for too long, holding back the UK’s economic recovery. It should have followed the European Central Bank by starting to cut rates today.”

The Bank was widely expected to leave rates on hold, with many economists predicting that it could begin cutting for the first time in four years at the next meeting in August. Money markets predict interest rates will be reduced no later than November.

The MPC said it “remains prepared to adjust monetary policy as warranted by economic data”.

The committee added: “As part of the August forecast round, members of the committee will consider all of the information available and how this affects the assessment that the risks from inflation persistence are receding.”

Of the MPC’s nine members, only two – Swati Dhingra and Sir Dave Ramsden – voted to cut the Bank Rate to 5pc. The remaining seven, including the Governor, voted to hold.

For some of these policymakers, “the policy decision was finely balanced”, the minutes of the MPC meeting showed. The remarks will be taken as a sign that rate cuts could soon be on the way.

Recent falls in the headline rate of inflation have largely been driven by falling energy bills, linked to fluctuating prices in international markets.

Mr Bailey and his colleagues fear underlying price pressures in the domestic economy are still lingering. Services prices are still rising by 5.7pc annually, which the MPC said is “somewhat higher than projected”.

At the same time, the average worker’s earnings in the three months to April were up 5.9pc, still far above the Bank’s target. Surveys of businesses indicate companies expect pay settlements to average 5.7pc this year.

“Monetary policy will need to remain restrictive for sufficiently long to return inflation to the 2pc target sustainably,” the MPC said.

However, it admitted that somewhat lower interest rates could still fulfil this goal: “The stance of monetary policy could remain restrictive even if Bank Rate were to be reduced, given that it was starting from an already restrictive level.”

No change was made to the pace of quantitative tightening. The Bank now holds £696bn of government bonds, down from £875bn at the peak of the quantitative easing programme.

Read the latest updates below.


06:20 PM BST

Signing off...

Thanks for joining us today. The Markets blog will be back tomorrow morning, but I’ll leave you with news that the digital current account provider Revolut is reportedly planning a share sale that would value the company at more than $40bn (£31.5bn).

The financial services app, which is backed by SoftBank, is working with Morgan Stanley to sell about $500m in shares, according to the FT.

Revolut declined to comment.

A Revolut debit card
A Revolut debit card - Justin Tallis/AFP via Getty Images

06:08 PM BST

US poised to ban antivirus giant

The Biden administration is expected to announce plans to ban the sale of a popular antivirus software made by Russia’s Kaspersky Labs in the US, a source told Reuters.

The antivirus giant, which has 400m customers around the world and is sold in the UK, has many large US customers including critical infrastructure providers and state and local governments.

The company’s ties to the Russian government were found to pose a critical risk, the source said, adding that the software’s privileged access to a computer’s systems could allow it to steal sensitive information from American computers, install malware or withhold critical updates.

The Telegraph has approached the US Commerce Department, which declined to comment to Reuters, and Kaspersky Lab. Previously, Kaspersky has said that it is a privately managed company with no ties to the Russian government.


06:07 PM BST

Accenture bolstered by surging demand for AI consultancy

Accenture shares have jumped 6.5pc after the consulting firm forecast annual revenue growth above expectations, bolstered by surging demand for its service that helps businesses integrate artificial intelligence tools in their operations.

Shares of Accenture rose after having fallen about 19pc this year on market expectations for subdued demand for IT services as elevated interest rates force companies to rein in spending.

Accenture’s generative AI business, which helps companies automate operations to save on costs and boost productivity, recorded a roughly 50pc jump in new bookings quarter-over-quarter.

That far outpaced growth in Accenture’s other core business as a go-to consultant and outsourcing service provider for companies migrating their operations to the cloud. Analysts expect slow demand for such services as enterprise spending plateaus.


05:48 PM BST

European shares rise after Swiss rate cut and the Bank of England’s decision

European shares advanced on Thursday with broad-based gains as markets tracked a global upbeat sentiment, while shares of British, Swiss and Norwegian stocks were in focus after their respective central bank decisions.

The pan-European Stoxx 600, which includes some of Britain’s biggest companies, ended up 0.9pc to hit a week’s high, led by a 1.8pc rise in technology stocks, while real estate stocks were another boost, rising 1.7pc.


05:33 PM BST

Sir Jim Ratcliffe attacks Labour plans days after backing Starmer

Labour’s green energy plans will tax the North Sea “out of existence”, Sir Jim Ratcliffe has warned, days after he publicly backed Sir Keir Starmer. Jonathan Leake reports:

The chief executive of chemicals giant Ineos and co-owner of Manchester United said Labour’s plans to raise taxes on oil and gas producers meant “the North Sea will become extinct relatively soon”.

He said Sir Keir Starmer’s plans, which also include slashing North Sea tax allowances, would undermine Britain’s energy security and lead to increased imports from overseas.

Sir Jim said: “If we shut down the North Sea, what is that accomplishing? Because we’ll just have to import our energy.”

The attack on Labour’s energy policy comes just days after Sir Jim signalled his support for Labour.

Read the full story...

Sir Jim Ratcliffe alongside a model of the Ineos Fusilier electric sport utility vehicle in February
Sir Jim Ratcliffe alongside a model of the Ineos Fusilier electric sport utility vehicle in February - Hollie Adams/Bloomberg

05:27 PM BST

Confidence growing in August or September rate cut

Investors appeared to be in positive spirits following the Bank’s latest meeting, where interest rates were kept at 5.25pc for the seventh consecutive month, as analysts had been expecting.

But, as is often the case, the devil was in the detail and it was noted that some members of the Monetary Policy Committee viewed the decision as “finely balanced”.

Dan Coatsworth, investment analyst at AJ Bell, said:

Confidence is growing that the Bank could cut rates either in August or September and that would represent a major turning point in monetary policy and effectively draw a line underneath an era dictated by soaring inflation and rapid rate hikes.

Investors are looking for a future when inflation is back under control and rates start to ease, and the magic moment looks to be in touching distance.

It was a positive session for other top European stock markets, with Germany’s Dax rising 0.95pc and France’s Cac 40 closing 1.34pc higher.

Markets have almost entirely priced in a interest rate cut by the September interest rate meeting, whereas yesterday this was not the case.


05:16 PM BST

France should be doing more to cut its deficit, says IMF chief

France can do “more” to bring down its deficit by taking advantage of Europe’s growing economy, the head of the International Monetary Fund said Thursday, a day after Brussels rebuked Paris for breaking EU spending rules.

Kristalina Georgieva told reporters in Luxembourg:

Countries that have relatively higher debt and deficit burden, at this time ... when the economy is doing better than we anticipated, they should take advantage of it and be more forceful to bring down debt and deficit.


05:00 PM BST

Vue cautions over impact of film delays due to Hollywood strikes

Cinema group Vue has warned that admissions for this year and next are set to be dampened by delays to film releases following the Hollywood writer and actor strikes.

Latest accounts for Vue Entertainment revealed that Europe’s largest independent cinema group saw higher admissions in the financial year to November.

But the company highlighted that SAG-AFTRA writer and actors’ strikes, which took place between July and December, threatened to impact its performance in the current 2024 financial year and the 2025 financial year.

The strikes prevented actors marketing some completed films, delaying the release of titles such Dune: Part Two, which saw its release pushed from 2023 to March this year.

It said that “many films” scheduled for release in full-year 2024 were now due to be released in the 2025 financial year.

Vue said the 2024 financial year “started strongly” butt cautioned that the final quarter of the year - the three months to the end of November - was “under-populated” with releases but was due to include Joker Folie A Deux.

The freshly filed accounts revealed that revenues grew by 5pc to £274.6m for the year to November 2023.

It reported improved audience footfall and growing market share after a number of successful releases including Avatar: The Way Of Water, Mario, Barbie and Oppenheimer.

It also grew its pre-tax profits for the year as a result, lifting to £14.3m for the year from £12.8m a year earlier.

Signage outside a Vue cinema in Altrincham, Greater Manchester
Signage outside a Vue cinema in Altrincham, Greater Manchester - Phil Noble/Reuters

04:53 PM BST

Footsie closes up after interest rate decision

The Footsie rose today, and especially this afternoon, with the blue-chip index of the top 100 companies rising 0.8pc. The top riser was JD Sports, which added 5pc, while mining company Fresnillo rose 4.4pc. However, Ocado plunged 12pcm while stockbroker Hargreaves Lansdown feel 1.7pc.

Meanwhile, the mid-cap FTSE 250 rose 0.6pc. The top riser was CMC Markets, up 12.8pc, followed by Aston Martin, up 6.3pc. The biggest faller was Tate & Lyle, down 9pc, followed by Asia Dragon Trust, down 7.9pc.


04:44 PM BST

Nvidia keeps flying and helps Wall Street stay near its records

Chip company Nvidia is rising again Thursday, and it’s helping to keep US indexes around their records despite a mixed set of reports on the economy.

The S&P 500 is up 0.1pc in trading after setting an all-time high for the 31st time this year before Wednesday’s public holiday in the US. The Dow Jones Industrial Average is up 0.2pc, while the Nasdaq Composite us up 0.1pc on its all-time record

Nvidia rose 2pc after supplanting Microsoft on Tuesday as the most valuable company on Wall Street, with a total market value of more than $3.3 trillion (£2.6 trillion). It’s been on an incredible run as the main beneficiary of the stock market’s frenzy around artificial-intelligence technology.

The gains for Nvidia and other AI winners have helped prop up the stock market despite some weakness in the US economy. High interest rates meant to grind down inflation have hurt the housing market and manufacturing in particular, while lower-income households are showing signs of struggling to keep up with still-rising prices.


04:34 PM BST

Dell jumps after Elon Musk link

Dell shares jumped as much as 8.3pc this afternoon after Michael Dell tweeted that the company he founded was building a “Dell AI factory” for Elon Musk’s xAI startup.


04:30 PM BST

Nestle takes cautious approach to catering to Ozempic users

Nestle’s new food brand for Americans taking weight-loss drugs such as Wegovy will note that the meals are high in protein, fiber and nutrients, but will not name the blockbuster medications.

The world’s largest food maker is keeping the names of the drugs off the packaging due to regulatory concerns, Tom Moe, Nestle USA’s president of meals, said in an interview with Reuters. Nestle will instead market its Vital Pursuit line of frozen meals on social media, he said.

Nestle’s hesitancy to name drugs like Novo Nordisk’s Wegovy and Ozempic on its packaging shows the uncertainty facing global food companies as they place big bets on selling products specifically geared toward millions of people taking the appetite-suppressing medicines.

The medications, from a class of drugs known as GLP-1 agonists, threaten to dent profits of snack-makers and fast food chains as people taking them cut way back on the amount of food they consume.

The medications can cause gastrointestinal side effects, but doctors recommend people using them keep eating, especially protein-rich foods, to maintain energy and avoid losing muscle.


04:26 PM BST

France’s National Rally claims it won’t crash the economy

France’s populist National Rally hit back today at charges from opponents that its spending plans would crash the economy, while president Emmanuel Macron’s centrist alliance said it was the only bulwark against financial mismanagement.

Mr Macron’s shock decision to call an election after his party was trounced by the RN in European elections caused the euro and French stocks to tumble and France’s borrowing costs to rise.

RN leader Jordan Bardella, who could be prime minister if the party wins an absolute majority, sought to assuage fears about its high-spending plans during an appearance before the Medef, France’s leading employers’ group.

“I’ve understood that I need to reassure people,” he said, pledging that if in government he would launch an audit of public finances in order to gauge his margin for manoeuvre before deciding on how far and how fast to go with reforms.

Macron’s camp portrays both the RN and the the Popular Front as profligate, with unfunded spending promises threatening to increase the national debt to unsustainable levels. France has been reprimanded by the EU for its debt being too high.

“The budgetary margin for manoeuvre is zero,” said Finance Minister Bruno Le Maire at the Medef event after Bardella spoke, describing the policy proposals from the RN and the Popular Front as “crazy”.

Jordan Bardella speaks to Medef in Paris, today
Jordan Bardella speaks to Medef in Paris, today - Nathan Laine/Bloomberg

04:19 PM BST

Footsie given boost despite bank of Bank of England decision

Investors are sending shares higher this afternoon, despite the Bank of England’s decision to hold interest rates. Chris Beauchamp, chief market analyst at online trading platform IG, said:

UK stocks had been in limbo ahead of the BoE decision, but the decision was perceived in a dovish light and provided a tailwind for the London market.

Ocado’s slump has knocked a point off the index, but the broad-based rally has powered the FTSE 100 to a two-week high, and this could mark the start of a new leg higher for the index as investors continue to take advantage of the competitive valuation on offer.


04:15 PM BST

Tate & Lyle plunges after making takeover deal for CP Kelco

Tate & Lyle shares have plunged nearly 9pc amid concerns that it will be a hard slog to boost profits at CP Kelco, the fibre, gum and protein ingredient supplier.

Earlier today, the shares were down as much as 12pc.

Alex Sloan, a Barclays analyst, told Bloomberg that the deal looks like “a good fit” and is being made at a reasonable price. But he said that CP Kelco’s current profitability is below its long-term average.

Tate & Lyle is an ingredients supplier which sold its sugar business to American Sugar Refining in 2010.


04:05 PM BST

Sellafield pleads guilty to IT security breaches

The government-owned company that safeguards nuclear fuel and waste has pleaded guilty to IT security breaches, it emerged this afternoon.

Sellafield is being prosecuted over cybersecurity blunders during a four-year period between 2019 and early 2023.

A Sellafield spokesman said:

We have pleaded guilty to all charges and cooperated fully with ONR [Office for Nuclear Regulation] throughout this process.

The charges relate to historic offences and there is no suggestion that public safety was compromised.

There had been fears that the business’s digital defences could have been breached by hackers acting for hostile states such as Russia and China. But the regulator said this afternoon that there was “no evidence that any vulnerabilities have been exposed”.

The Sellafield nuclear reprocessing plant in Cumbria, 1995
The Sellafield nuclear reprocessing plant in Cumbria, 1995 - Greenpeace/PA

04:02 PM BST

Yellen says Biden’s China tariffs are strategic, while Trump’s would raise costs

US Treasury Secretary Janet Yellen this afternoon defended Joe Biden’s increased tariffs on certain Chinese goods as highly strategic. But she said Republican presidential candidate Donald Trump’s tariff proposals would be much broader and raise costs for consumers.

Ms Yellen told a news briefing in Atlanta that Biden’s new tariffs are aimed at protecting electric vehicles, solar energy products and semiconductors from excess Chinese capacity, and the administration refuses to allow US firms in these sectors “to be put out of business by dumping ... by a coordinated Chinese effort.”

Janet Yellen at an event with the Economic Club of New York, earlier this month
Janet Yellen at an event with the Economic Club of New York, earlier this month - Justin Lane/EPA-EFE/Shutterstock

04:00 PM BST

World Health Organisation warns over fake Ozempic

Batches of fake Ozempic have circulated in the UK, US and Brazil, the World Health Organisation has warned.

The UN organisation has issued an alert to regulators and health services around the world after the fake drugs were discovered in the supply chain.

The fake drugs in the UK are understood to be those found in October. At the time, the UK’s Medicines and Healthcare products Regulatory Agency discovered them at two UK warehouses. It said that none had been supplied to patients.

Health authorities around the world have been told to check batch numbers to ensure the fake drugs are not use.


03:35 PM BST

Handing over

That’s all from me today. I will hand you over to Alex Singleton, who is champing at the bit to send you the latest updates.

I will leave you with a quick look at consumer confidence in the eurozone, which came in below analyst estimates at minus 14.

Consumer confidence across the bloc is slightly short of its long-term average.


03:21 PM BST

Ocado plunges as Canada warehouse deal halted

Shares in grocery deliverer Ocado have plunged after it revealed it has halted plans to open a new robotic warehouse in Canada, throwing doubts on its strategy shift towards being a technology business.

Ocado Group, which also owns half of the Ocado Retail joint venture with Marks & Spencer, dropped by more than 15pc to become the worst performer on the FTSE 100 today.

It announced plans to build another customer fulfilment centre for Canadian supermarket Sobeys in Vancouver had been paused.

Ocado, which will be relegated from the FTSE 100 next week, also revealed its deal with the company was no longer exclusive.

It is a blow as the business has been pushing investors to view it as a technology company, rather than an online grocer, selling warehouse robots to some of the world’s biggest retailers around the world.


03:10 PM BST

Anthropic upgrades its ChatGPT rivals

AI company Anthropic has upgraded its chatbots for the second time in four months as it fights to keep its place with OpenAI’s ChatGPT.

The US business, which is partly owned by Amazon after a $4bn investment, said the upgrade from Claude 3 to Claude 3.5 would make its chatbot twice as fast.

Anthropic claims its chatbots are used by millions of people for anything from coding to customer service.

Michael Gerstenhaber, in charge of product design at Anthropic, said the latest models have an “ability to carry out tasks of very high complexity”.

He said Claude 3.5 had improved on previous versions with customer support, creative writing and helping data scientists with visual processing.

OpenAI stole the march on its competitors when it launched ChatGPT in late 2022, capturing the public’s imagination with a bot capable of generating all manner of complex texts from simple requests.


02:57 PM BST

North Sea oil drilling threatened by landmark Supreme Court ruling

The future of Britain’s oil and gas industry has been thrown into doubt after a landmark decision by the Supreme Court.

Our energy editor Jonathan Leake has the details:

The court ruled today that emissions from burning fossil fuels must be considered when approving new drilling sites.

It is the latest development in the case brought by Sarah Finch, a Surrey resident who challenged the local council’s decision to allow the expansion of an oil site at Horse Hill in 2019.

Ms Finch, acting on behalf of Weald Action Group, argued that the environmental impact assessment had only considered emissions from the extraction of oil – and wrongly ignored those produced when the oil was burned.

Read why the Supreme Court has sided with her, handing down a decision that has huge implications for the entire UK oil and gas industry.

Legal experts say the decision could influence the way in which new UK fossil fuel projects are assessed
Legal experts say the decision could influence the way in which new UK fossil fuel projects are assessed - Carina Johansen/Bloomberg

02:41 PM BST

Wall Street rallies at the open

The S&P 500 and the Nasdaq opened higher as they were propelled by a rally in Nvidia.

The Dow Jones Industrial Average fell 30.13 points, or 0.1pc, at the open to 38,804.73.

The S&P 500 opened higher by 26.76 points, or 0.5pc, at 5,499.99, while the Nasdaq Composite gained 51.71 points, or 0.3pc, to 17,913.94 at the opening bell.


02:26 PM BST

US jobless claims hit nine-month high as economy weakens

The number of Americans applying for unemployment benefits rose to its highest level in nine months in a sign the economy is slowing.

The Labor Department reported that the four-week average of jobless claims rose by 5,500 to 232,750, the highest since September.

Weekly jobless claims fell by 5,000 to 238,000 from a 10-month high of 243,000 the week before.

Weekly unemployment claims — a proxy for layoffs — remain at low levels by historical standards, a sign that most Americans enjoy unusual job security. Still, after mostly staying below 220,000 this year, weekly claims have moved up recently.

Rubeela Farooqi, chief US economist at High Frequency Economics, said:

Layoffs are still low overall suggesting businesses remain reluctant to reduce headcount in large numbers.

However, there has been a gradual increase in recent weeks that merits watching for signals about a more material weaking in demand for workers going forward.

Nearly 1.83 million people were collecting unemployment benefits the week of June 8, up by 15,000 the week before and the seventh straight weekly uptick.


02:01 PM BST

Oil prices flat as US stocks expected to rise

Oil steadied ahead of the release of weekly stockpile data from the US that may show another rise in nationwide crude inventories.

Brent was up 0.5pc at more than $85 a barrel after a low-volume session due to the Juneteenth holiday in America. West Texas Intermediate was up 0.3pc to nearly $82.

The US Energy Information Administration will release figures on US stockpiles later — one day after it is usually scheduled.


01:45 PM BST

Wall Street on track for gains as trading returns

The Nasdaq and S&P 500 jumped in premarket trading as Nvidia extended its rally.

Nvidia climbed 3.4pc before the opening bell after the semiconductor bellwether surpassed Microsoft on Tuesday to become the world’s most valuable company.

It has a market value of $3.335 trillion, as its high-end processors play a central role in a scramble to dominate artificial intelligence technology.

The S&P 500 and Nasdaq closed at record highs on Tuesday, before markets were closed for the Juneteenth holiday on Wednesday.

Other chip stocks Advanced Micro Devices, Marvell Technology, Micron Technology and Arm Holdings also gained between 1pc and 2.4pc.

In premarket trading, the Dow Jones Industrial Average was flat, the S&P 500 was up 0.3pc, and the Nasdaq 100 had gained 0.4pc.


01:30 PM BST

‘Painful’ Bank of England decision to cost homeowners almost £1,000 a year

Homeowners will pay hundreds of pounds a year more on their mortgages after the Bank of England held interest rates for the seventh consecutive time.

Our reporter Rob White has the details:

The Bank’s decision to maintain the base rate at 5.25pc will cost many mortgage holders £500 more each year, rising to almost £1,000 in London, according to analyst Moneyfacts.

Experts said the decision was “painful” for homeowners and would leave them “hanging on every word” coming out of Threadneedle Street.

The Bank of England’s Monetary Policy Committee (MPC), which sets interest rates to achieve its 2pc inflation target, voted to maintain the current Bank Rate at 5.25pc on Thursday.

Read what it means for mortgage borrowers on a standard variable rate.


01:17 PM BST

Interest rates decision a ‘kick in the teeth’ for business owners

Business owners will be disappointed by the Bank of England’s decision to hold rates steady, according to the Federation of Small Businesses (FSB).

National chair Martin McTague said:

Yet again, the MPC has opted to stick instead of twist, a move which was widely predicted but which is no less disappointing for it.

The high plateau rates are currently stuck at is now undermining growth as small firms struggle to access affordable finance to help them expand.

Inflation is now back on target and holding off a cut in the base rate until a future date risks snuffing out tentative signs of a recovery in GDP, with the flat growth in April a warning sign.

Ian Hepworth, director at Funding Solutions UK, added:

This is another kick in the teeth for business owners who have patiently been waiting for inflation to fall back to 2pc. Finally it has happened and the goal posts have been moved.

Businesses have endured rising costs in the form of inflation but also in borrowing costs. The base rate increased from 0.1pc to 5.25pc. For a business with a £100,000 overdraft that means an additional cost of up to £5,150.

For larger businesses it is an additional £51,500 for every £1m borrowed. This not only eats away at profits but stifles growth as businesses can’t afford to borrow to invest in new equipment.


01:09 PM BST

Bank of England putting recovery at risk, warn economists

Suren Thiru, economics director at ICAEW, said:

With inflation back at target, the decision to keep interest rates on hold will provide obvious disappointment to those household and business borrowers struggling under the strain of the cumulative impact of 14 rate hikes.

While the minutes struck a slightly more dovish tone, the lack of movement in the vote split towards loosening policy means an August interest rate cut is far from certain.

Given that the UK has moved onto a milder inflationary trajectory, rate setters remain too circumspect over the likelihood of loosening policy, risking unnecessarily impeding the UK’s growth prospects.

With loosening labour market conditions likely to help ease concerns over underlying price pressures, the case for an August interest rate cut remains strong.

Thomas Pugh, economist at RSM UK, added that “now that inflation has fallen back to 2pc the collateral damage of holding interest rates high on the economic recovery is much less necessary”.


12:59 PM BST

Bank of England holding mortgage borrowers to ransom, say brokers

Mortgage brokers have accused the Bank of England of “cowardice” after holding interest rates at 16-year highs of 5.25pc.

Policymakers opted not to lower borrowing costs two weeks before the General Election, despite inflation falling to their 2pc target in May.

Ben Perks, managing director at Orchard Financial Advisers, said: “The Bank of England leaving rates on hold is holding borrowers to ransom. There is no excuse for this cowardice.”

Rohit Kohli, director at The Mortgage Stop, said: “Borrowers will be boiling over this summer after the Bank of England held rates yet again despite inflation hitting the magic 2pc target.”

A few mortgage lenders have begun cutting rates in anticipation of a summer cut by the Bank, with NatWest announcing a reduction this week.

Andrew Sheen, managing director of Thameside Mortgages, said: “From a mortgage perspective, a rate cut today would not have significantly impacted many mortgage holders immediately as most are locked into fixed-rate mortgages, protecting them from changes in the base rate.

“Instead, the pricing of UK mortgages is more intricately tied to the Sterling Overnight Index Average (SONIA) swap rates than to the bank’s base rate and SONIA rates have not changed significantly in the last month, despite inflation falling month on month.”

Justin Moy, managing director at EHF Mortgages, added: “Borrowers may see marginal improvements in rates whilst application volumes suffer in the heat, but any thoughts of proper rate cuts have just evaporated.”


12:36 PM BST

Summer rate cuts still on the table, say economists

The Bank of England has left the possibility of a summer rate cut “on the table,” according to economists.

Yael Selfin, chief economist at KPMG UK, said: “We continue to expect the first rate cut in August, once the general election is over as inflationary pressures continue to ebb.”

Ruth Gregory, deputy chief UK economist at Capital Economics, said the Bank “continued to give the impression that the pieces of the puzzle are almost in place for it to cut rates”.

She added: “The upshot is that we are sticking to our view that the Bank will first cut rates from 5.25pc in August and we still think that, due to inflation falling to 1.5pc later this year, the Bank will reduce rates to 3pc next year rather than to 4pc as markets expect.”

Thomas Pugh, economist at RSM, said:

All the focus is now on August and we think the MPC should cut rates at the next meeting.

Whether it will or not depends on the next wage and inflation, particularly services, data showing signs of slowing.

Indeed, the fact that for some members who voted to keep rates on hold ‘the policy decision at this meeting was finely balanced’ suggests that it wouldn’t take much of a slowdown in wage growth or services inflation to convince them to vote for a rate cut in August.


12:26 PM BST

Government borrowing costs fall after rate decision

The cost of government borrowing has fallen after the Bank of England admitted the decision to hold rates at 5.25pc was “finely balanced” for some of its policymakers.

The yield on 10-year UK gilts - the return the government promises to pay buyers of its debt - has fallen three basis points to 4.03pc.

Meanwhile, the yield on two-year gilts, which are more sensitive to interest rate expectations, has fallen five basis points to 4.11pc.

Both are leading the way among major European bonds.


12:21 PM BST

Bank of England should have followed ECB, say economists

The Bank of England is holding rates steady despite the European Central Bank deciding to cut borrowing costs for the first time in five years earlier this month.

Dr George Dibb, associate director for economic policy at IPPR, said:

The Bank of England has tightened the screws too much for too long, holding back the UK’s economic recovery.

It should have followed the European Central Bank by starting to cut rates today.

The Bank has to balance lingering price rises, notably in services, with the UK’s zero economic growth and a cooling labour market.

With inflation expectations back down to pre-pandemic levels, it’s time for the Bank to switch gears, support the economy more, and cut rates.

That said, economists were not surprised by the decision:


12:16 PM BST

Traders bet on August interest rate cut

Traders think interest rates will likely be cut in August after the Bank of England’s policymakers signalled they were wavering on keeping borrowing costs at their 16-year highs.

Money markets indicate that there is a more than 50pc chance of a quarter of a point rate cut at the Bank’s next meeting, compared to 32pc before its latest decision.

Traders are also now betting that there will likely be two interest rate cuts before the end of the year.

It comes after the Bank of England said some of its policymakers were “finely balanced” when it came to their decision.

The Monetary Policy Committee voted by a majority of 7-2 to leave interest rates unchanged at 5.25pc.


12:10 PM BST

General Election ‘not relevant’ insists Bank as rates held steady

The Bank of England’s monetary policymakers insisted the impending General Election had not played a part in their decision to leave interest rates unchanged at their 16-year highs despite inflation falling back to the 2pc target.

It said:

The committee noted that the timing of the general election on 4 July was not relevant to its decision at this meeting, which would as usual be made on the basis of what was judged necessary to achieve the 2pc inflation target sustainably in the medium term.


12:08 PM BST

Pound falls as Bank of England policymakers waver

The value of the pound has slipped after the Bank of England said some of its policymakers were “finely balanced” on the question of holding interest rates.

Sterling was down 0.2pc against the dollar to $1.269 as the Bank reported that some of its rate setters felt that stronger-than-expected services inflation had been adversely impacted by the rising minimum wage (NLW).

It said:

The impact of the increase in the NLW this April on aggregate pay growth was unlikely to be as large in future.

Such factors would not push up medium-term inflation.

For these members, the policy decision at this meeting was finely balanced.


12:03 PM BST

Bank of England policymakers vote 7-2 in favour of holding rates

The Bank of England’s Monetary Policy Committee voted by a majority of 7–2 to maintain interest rates at 5.25pc.

It said the decision to vote against cutting rates was “finely balanced” for some voters.


12:00 PM BST

Bank of England holds interest rates at 5.25pc

The Bank of England has held interest rates steady at 5.25pc for the seventh consecutive meeting despite inflation falling back to its target.

Policymakers opted today to keep borrowing costs at their highest level since 2008, where they have stood since August last year.

It comes despite figures on Wednesday showing that inflation dropped to 2pc in May after the pandemic and the energy crisis pushed prices to rise at a peak pace of 11.1pc in October 2022.

The Bank was widely expected to leave rates on hold, with many economists predicting that it could begin cutting rates for the first time in four years at the next meeting of the Monetary Policy Committee in August.

Money markets predict interest rates will be cut no later than November.


11:49 AM BST

Stocks edge higher ahead of Bank of England decision

Stock markets have made gains today ahead of the Bank of England’s latest decision on interest rates.

The FTSE 100 joined European markets in edging higher after Switzerland announced a surprise cut borrowing costs, while Norway kept rates on hold.

The UK’s blue-chip index was up 0.1pc, while the Cac 40 in France was up 0.9pc and the Dax in Germany had gained 0.6pc.

Kathleen Brooks, research director at trading firm XTB, said:

Overall, this close to the election, we think that the Bank of England will keep their cards close to their chest today and they won’t commit to anything for the future.

But, if they don’t change the wording of their statement too much, except acknowledging the progress made on inflation, then we could see the market rally as this could increase the chance of an August rate cut.

But, if they sound concerned about service price pressures, then we expect the market to move towards pricing in a November cut.


11:40 AM BST

Bank of England poised to hold interest rates despite falling inflation

The Bank of England is expected to hold interest rates steady at 5.25pc for the seventh consecutive meeting despite inflation falling back to its target.

Policymakers are forecast today to keep borrowing costs at their highest level since 2008, where they have stood since August last year.

It comes despite figures on Wednesday showing that inflation dropped to 2pc in May, after the pandemic and the energy crisis pushed prices to rise at a peak pace of 11.1pc in October 2022.

The Bank is widely expected to leave rates on hold, with many economists predicting that it could begin cutting borrowing costs for the first time in four years at the next meeting of the Monetary Policy Committee in August.

Money markets predict interest rates will be cut no later than November.


11:28 AM BST

Adnams chairman calls time on family’s place on brewer’s board

Adnams chairman Jonathan Adnams is to step down, marking the end of the family’s representation on the beer brewer board.

The Suffolk-based company said that Mr Adnams would step down before next year’s annual shareholder meeting, pencilled in for June 2025.

Mr Adnams is a descendent of George and Ernest Adnams, who founded the cask ale brewer in 1872 in the seaside town Southwold, and is the last person holding the family name on the board.

The Adnams family remains a major shareholder in the company.

Adnams also said it has “made progress” in its search for fundraising after saying in February it was looking for financial backing to support “future growth plans”.

It said it has “secured interest from multiple parties”.

Adnams, which also operates a number of pubs, booked a pre-tax loss of £4m last financial year after rising inflation hit its bottom line.

Adnams was founded by George and Ernest Adnams in 1872
Adnams was founded by George and Ernest Adnams in 1872 - Roger Taylor

11:13 AM BST

French bond auction raises €10.5bn

France’s Treasury raised €10.5bn (£8.9bn) in a bond auction in the first test of its debt market since Emmanuel Macron shocked markets with snap parliamentary elections.

Investors bought three to eight-year bonds in the first sale since the French President called the vote.

The decision sent the premium on French borrowing costs in relation to European benchmark Germany to its highest point since 2017 last week.


10:58 AM BST

Pound slips ahead of interest rate decision

The pound has edged lower ahead of the Bank of England interest rate decision in it is expected to hold borrowing costs at a 16-year high of 5.25pc.

Sterling was down 0.1pc on Thursday at $1.271, but up from a one-month low of $1.2658 on Friday.

The pound has been buffeted over the last two weeks by swings in the euro and dollar as investors have digested weaker US inflation data and Emmanuel Macron’s decision to call snap elections.

The euro was down very slightly against the pound at 84.4p. It dropped to a two-year low against sterling on Friday as President Macron’s decision rocked markets, but has since recovered somewhat.

Henk Potts, market strategist at Barclays Private Bank, said:

Despite UK inflation returning to the 2pc targeted level in May, in our view it’s unlikely to be enough to encourage the Bank of England to cut rates at Thursday’s meeting.

April’s higher-than-expected consumer price index print, plus general election protocols, suggest that the Monetary Policy Committee will keep rates on hold.

However, the recent progress on inflation, the easing of labour market conditions and the European Central Bank’s June interest rate cut could leave the door open for a potential rate reduction at the August meeting.


10:34 AM BST

Bank of England ‘will cut rates in August,’ say economists

Barret Kupelian, chief economist at PwC, said:

With headline inflation hitting its target rate, the Bank’s Monetary Policy Committee is nudging closer to cut its policy rate.

The tide is clearly turning, but we still feel that the Bank is not quite there yet.

Services inflation continues to remain significantly above its own projections (5.7pc vs 5.3pc), in part due to a tight labour market and also because of erratic factors.

The Bank is therefore likely to keep interest rates unchanged today.

The Monetary Policy Committee will next meet in August, armed with a new set of forecasts and an additional inflation reading, which will help clarify its thinking on how to proceed.

Assuming no surprises, we think the Bank will cut rates in August.


10:27 AM BST

Bank of England ‘should not hesitate’ to cut interest rates despite election

The Bank of England “should not hesitate” to cut interest rates today despite the election campaign, economists have urged, as inflation has fallen back to its 2pc target.

Policymakers are expected to hold rates at their 16-year highs of 5.25pc as they seeks to avoid any perceptions of influencing the general election campaign.

Inflation fell back to 2pc in May but persistent price rises in the services sector will likely have raised concern among members of the Monetary Policy Committee (MPC).

However, Julian Jessop, economics fellow at the Institute of Economic Affairs think tank, hopes policymakers will “spring a surprise”. He said:

Some MPC members will worry that underlying inflation is still much higher than 2pc: the ‘core’ rate excluding food and energy was 3.5pc in May and services inflation 5.7pc.

But these rates and the key underlying driver – wage pressures – are coming down. Inflation could increase later in the year because of the Ofgem cap on domestic energy bills and price rises in the eurozone.

But, with inflation now back on target, the MPC should not hesitate to cut interest rates, even during an election campaign.

Importantly, the Bank should avoid the perception of political bias in either direction and make their decision on the basis of the better news on the inflation data.


10:11 AM BST

OpenAI founder to build rival artificial intelligence start-up

The former chief scientist and co-founder of OpenAI has announced the launch of his own artificial intelligence (AI) company, which he said would focus on safety.

Ilya Sutskever said he was launching Safe Superintelligence and that building safe AI was “our mission, our name, and our entire product roadmap”.

In a launch statement on the new company’s website, the firm said it would approach “safety and capabilities in tandem” as “technical problems to be solved” and to “advance capabilities as fast as possible while making sure our safety always remains ahead”.

Some critics have raised concerns that major tech and AI comapnies are too focused on reaping the commercial benefits of the emerging technology, and are neglecting safety principles in the process - an issue raised in recent months by several former OpenAI staff members when announcing they were leaving the company.

Elon Musk, a co-founder of OpenAI, has also accused the company of abandoning its original mission to develop open-source AI to focus on commercial gain.

In what appeared to be a direct response to those concerns, Safe Superintelligence’s launch statement said: “Our singular focus means no distraction by management overhead or product cycles, and our business model means safety, security, and progress are all insulated from short-term commercial pressures.”

Mr Sutskever was involved in the high-profile attempt to oust Sam Altman as OpenAI chief executive last year, and was removed from the company’s board following Mr Altman’s swift return before leaving the company in May this year.

Computer scientist and OpenAI co-founder Ilya Sutskever is launching his own safety-focused AI company
Computer scientist and OpenAI co-founder Ilya Sutskever is launching his own safety-focused AI company - JACK GUEZ/AFP via Getty Images

09:54 AM BST

Norway delays first rate cut until next year

Norway’s central bank has postponed a first interest rate cut until 2025 as it kept borrowing costs on hold at 16-year highs

Norges Bank said it was abandoning a previous plan to reduce the cost of borrowing in September this year as it left interest rates unchanged at 4.5pc, as had been expected.

Governor Ida Wolden Bache said: “If the economy evolves as currently envisaged, the policy rate will continue to lie at 4.5pc to the end of the year, before gradually being reduced.”

Norges Bank now expects core consumer prices to rise by 4pc this year, down from 4.1pc seen in March.

The Bank of England announces its next interest rate decision at noon.


09:46 AM BST

Packaging giant DS Smith seeks to allay takeover doubts

The boss of packaging giant DS Smith has insisted the group is pressing ahead with its £5.8 billion sale to a US rival as speculation grows that the deal may be in jeopardy.

DS Smith - which counts customers including Amazon and consumer goods group Unilever - agreed an all-share takeover by Memphis-based International Paper in April, which would leave its shareholders with 33.7pc of the combined group.

The deal will see International Paper seek a secondary listing of its shares on the London Stock Exchange following the takeover, which values each DS Smith share at 415p.

But International Paper is now reportedly fending off a possible $15bn (£11.8bn) takeover bid from Brazilian pulp and paper company Suzano.

It is thought Suzano’s potential offer is contingent on the DS Smith deal being abandoned.

Miles Roberts, chief executive of DS Smith, said he is aware of the rumoured bid interest in its buyer.

He stressed both sides are still “working very diligently on bringing the businesses together”.

“That hasn’t changed at all,” he said. “Time will tell. We remain optimistic about the opportunities going forward.”

DS Smith makes cardboard packaging for the likes of Amazon and Unilever
DS Smith makes cardboard packaging for the likes of Amazon and Unilever - REUTERS/Stephane Mahe

09:31 AM BST

YouGov plunges as it warns of falling demand despite election year

Shares in YouGov plunged by the most in 15 years after it told investors it expected less demand for its data products.

The polling company has plummeted by 35pc after it said it expects revenue for the year to reach between £324m to £327m, which was below analyst estimates of £339m.

The lower guidance is a blow to investors as 2024 is the biggest election year in history, with more than half the world’s population going to the polls.

YouGov’s shares hit a four-year low of 483p in early trading.


09:17 AM BST

Stocks rise after Switzerland cuts interest rates

European stocks have strengthened after the Swiss National Bank delivered an unexpected interest rate cut.

The FTSE 100 gained 0.1pc and the Stoxx 600 rose 0.4pc, while the Cac 40 in Paris was up 0.4pc and the Dax in Frankfurt lifted as much as 0.8pc.

It comes after policymakers in Switzerland cut borrowing costs for a second time, saying that inflation pressure has decreased again compared to the previous quarter.

Guy Miller, chief market strategist at Zurich Insurance, said: “The fact we are having interest rates coming down implies they feel confident enough that the inflation dynamic is coming down.”

The Bank of England and Norges Bank also announce interest rate decisions today.

European markets have risen after the surprise interest rate cut by the Swiss National Bank
European markets have risen after the surprise interest rate cut by the Swiss National Bank - REUTERS/Pascal Lauener

09:05 AM BST

China threatens ‘provisional anti-dumping measures’ in EU pork investigation

China may impose provisional anti-dumping measures on pork imports from the European Union, its commerce ministry said, as it responds to potential tariffs on its electric vehicle industry.

China has opened an investigation into EU pork and its by-products, escalating tensions after the bloc imposed anti-subsidy duties on Chinese-made electric vehicles.

The investigation will focus on pork intended for human consumption, such as fresh, cold and frozen whole cuts, as well as pig intestines, bladders and stomachs.

The probe is expected to be completed by June 17, 2025, but could be extended by another six months if required.

Commerce ministry spokesman He Yadong said: “If, after preliminary investigation, it is determined that dumping has been established and has caused injury to the domestic industry, provisional anti-dumping measures may be taken.”

Global food companies have been on high alert for retaliatory tariffs from China after the European Commission announced on June 12 it would impose anti-subsidy duties of up to 38.1pc on imported Chinese cars from July.


08:43 AM BST

Switzerland cuts interest rates for second straight meeting

The Swiss National Bank has cut interest rates for the second meeting in a row in a move which has surprised markets.

The pound lurched 0.5pc higher against the Swiss franc after Switzerland’s central bank unexpectedly cut its key interest rate from 1.5pc to 1.25pc.

Analysts had expected it to hold rates steady.


08:33 AM BST

Sainsbury’s gains but Tate & Lyle falls as markets await Bank of England’s decision

UK stock markets were little changed ahead of the Bank of England’s interest rate decision.

The FTSE 100, FTSE 250 and the pound were all steady in the lead up to the meeting by the Monetary Policy Committee, which is expected to leave interest rates at 16-year highs of 5.25pc.

Traders are currently pricing in less than a 30pc chance of an initial rate cut in August. This figure could shift in either direction following the vote and explanation of the MPC’s reasoning.

Among individual stocks, Sainsbury’s jumped as much as 2.5oc after it struck a deal to offload its banking business to NatWest. The bank’s shares were up as much as 0.7pc.

Shares of Energean gained 6.2pc after the oil and gas producer agreed to sell its assets in Egypt, Italy and Croatia to private equity fund Carlyle for up to $945m (£743m).

CMC Markets soared as much as 9.6pc after the trading platform posted a 52pc jump in its annual adjusted pre-tax profit.

Tate & Lyle dropped by 5.5pc to the bottom of the FTSE 250 after announcing it would buy specialty ingredients maker Kelco for $1.8bn (£1.4bn).


08:21 AM BST

CMC Markets jumps amid record income

Stock broker CMC Markets has jumped to the top of the FTSE 250 after revealed higher income and profits.

The trading platform said net operating income jumped 15pc to £332.8m in the year to March, a new record high outside the pandemic.

Analysts at Peel Hunt raised their target for CMC’s share price from 220p to 330p as the company raised its outlook for the year ahead.

It said net operating income this year would rise to £320m to £360m. It increased pre-tax profits by 21pc to £63.3m.


08:03 AM BST

UK markets flat ahead of interest rate decision

The FTSE 100 was little changed as trading began ahead of the Bank of England’s next decision on interest rates.

The benchmark stock index was flat at 8,204.95 while the midcap FTSE 250 was also static at 20,376.34.


07:53 AM BST

Sainsbury’s ends three-decade battle against ‘Big Four’ banks

Sainsbury’s said earlier this year it was planning a “phased withdrawal” of Sainsbury’s Bank after conducting a strategic review.

The sale to NatWest promises to bring the curtain down on nearly three decades of direct banking by Sainsbury’s and follows a recent move from rival Tesco to explore a sale of Tesco Bank.

The retreat of Britain’s two largest supermarkets from the banking world underlines the difficulty of competing with the “Big Four” — Barclays, Natwest, Lloyds and HSBC.

Former Sainsbury’s chairman Sir Philip Hampton said earlier this year:

At the end of the day, where do you want to put your money?,” says

You wouldn’t buy your potatoes from HSBC, probably because you’re not sure they have a particular capability of selling potatoes.


07:42 AM BST

NatWest to acquire Sainsbury’s Bank in £2.5bn deal

Sainsbury’s has struck a deal to sell its banking business to lending giant NatWest.

Under the deal, the supermarket has agreed to pay the state-owned lender £125m to take on the assets, which include about one million customer accounts.

The deal will see NatWest take on about one million customer accounts, as well as £1.4bn of unsecured personal loans, £1.1bn of credit card balances and about £2.6bn of customer deposits.

It comes after Sainsbury’s announced in January it was winding down its banking division to focus on its retail business.

The deal is expected to complete in the first half of next year.

NatWest will take on £2.5bn of Sainsbury's Bank assets
NatWest will take on £2.5bn of Sainsbury's Bank assets - REUTERS/Luke MacGregor

07:34 AM BST

Tate & Lyle buys CP Kelco for £1.4bn

Tate and Lyle is to buy natural ingredient provider CP Kelco for $1.8bn (£1.4bn) as it shifts towards healthier foods.

The British refiner has been undergoing a major overhaul over the last six years aimed at focusing it towards consumer trends for healthier and more sustainable food and drink.

Tate & Lyle helps food and drink manufacturers remove sugar and fat from products by replacing them with healthier alternatives that replicate the taste and feel of the original ingredients.

Chief executive Nick Hampton said:

With our leading portfolio of speciality ingredients and a world-class team of food science experts, we will be uniquely placed to provide our customers with the solutions they need to meet growing consumer demand for healthier, tastier and more sustainable food and drink.

We’ve been collaborating with CP Kelco on innovation projects for many years and are very aware of their excellent products and the outstanding capabilities of their people.

We are excited about the opportunities the combination will create for customers across the world, and the opportunities for employees in both companies to develop their careers across a broader global business.


07:16 AM BST

European EV sales plunge as Germany halts subsidies

New battery-electric car sales plunged in the European Union last month, industry figures show, as Germany’s market was hit by the early end of government subsidies.

There were 114,308 registrations of battery electric vehicles across the bloc in May, down 12pc from a year earlier, according to the European Automobile Manufacturers Association (ACEA).

The market was hit plummeting sales in Germany, the EU’s largest electric vehicle market, where registrations were down by 30pc after the government brought an early end to subsidies.

Germany has now seen a 16pc decline in EV sales so far this year.

Overall new car sales in the bloc fell by 3pc in May from the same month in 2023, the second drop this year, and were down 2.6pc in a wider region covering the EU, Britain and the European Free Trade Association (EFTA), the ACEA said.

Sales of battery electric cars in Germany have plunged by 30pc
Sales of battery electric cars in Germany have plunged by 30pc - Liesa Johannssen/Bloomberg

07:01 AM BST

Global fossil fuel use hits record as Labour plots oil and gas tax raid

Fossil fuel use and greenhouse gas emissions both hit record highs in 2023, according to a new study warning that climate change is still out of control.

The Energy Institute (EI), which represents engineers and others who work in the power sector, found that the equivalent of 58bn tonnes of CO2 were added to the Earth’s atmosphere last year – accelerating the warming that has already added 1.5C to average global temperatures.

It was driven by an increase in emissions from fossil fuels, which exceeded 40bn tonnes for the first time – double what was emitted in 2000.

Juliet Davenport, president of the London-based EI, said: “2023 saw record consumption of fossil fuels and record emissions from energy, but also record generation of renewables, driven by increasingly competitive wind and solar energy.”

The report comes as Labour promises to impose extra taxes and licensing restrictions on UK oil and gas producers as part of a wider drive to move the UK away from fossil fuels and towards “cleaner energies”.

Ed Miliband told the Global Offshore Wind conference in Manchester on Wednesday that one of his first acts as energy secretary, if Labour is elected, will be to slash planning restrictions on onshore wind farms in the hope of triggering a boom in greenfield turbine construction.

Mr Miliband said in his speech: “Clean energy we produce at home is cheaper than fossil fuels and more secure because dictators cannot control it.”

The Conservatives have pledged to treble Britain’s offshore wind capacity and continue to grant North Sea oil and gas licences to protect energy security.

The EI report warned that 2023 was the warmest year since records began, according to EU monitoring, with global temperatures 1.5C above average.

Although renewable energy production is also at an all time high, its expansion is not keeping up with the growth in demand.

Coal, oil and gas are still supplying 81.5pc of global energy, the EI said in its annual Statistical Review of World Energy
Nick Wayth, EI’s chief executive, said: “There is no doubt we observe an energy hungry world.

“Primary energy consumption hit a record – overall in 2023 it was up 2pc to 620 exajoules, overtaking last year’s previous high. [An exajoule is an amount of energy equivalent to 34m tonnes of coal.]

“Total fossil fuel consumption increased by 1.5pc to 505 exajoules … and coal and oil consumption both reached new highs in absolute terms.”

Coal consumption was driven by surging demand in China and India, with India using more of the fuel than Europe and North America combined for the first time ever.


06:41 AM BST

Good morning

Thanks for joining me. A new study shows fossil fuel use and greenhouse gas emissions hit record highs last year.

The Energy Institute has warned that the amount of CO2 released into the atmosphere is accelerating global warming.

It comes as Labour’s shadow energy secretary Ed Miliband said he would reduce planning restrictions on offshore wind farms if his party wins the General Election.

5 things to start your day

1) Britain could become ‘island of stability’ as Macron debt crisis consumes France, says UBS | Political uncertainty may move from UK to EU countries whose spending breaches budget deficit rules

2) Barrister banned for 12 months after punching fashion designer at Royal Opera House | Bar Standards Board suspends investment funds lawyer after attack during Wagner performance

3) Number of children claiming disability benefits ‘doubles in a decade’ | Claims tied to ‘learning disabilities, autism and ADHD’ driving increase, think tank says

4) Chinese manufacturers urge Beijing to hit back at EU electric car tariffs | German and British carmakers risk being caught in the crossfire of trade tensions

5) How the City was strangled by red tape | Labour vows to slash costs for financial sector after overzealous regulation dilutes rewards for entrepreneurs

What happened overnight

Asian stocks mostly fell in thin trading after US markets were closed Wednesday in observance of Juneteenth.

Tokyo’s Nikkei 225 index edged 0.1pc higher to 38,324.10.

The Hang Seng in Hong Kong shed 0.5pc to 18,336.76. The Hang Seng tech index retreated 1.4pc, after jumping 3.7pc on Wednesday, tracking Nvidia’s advance. The Shanghai Composite index dropped 0.3pc to 3,009.72.

The Chinese yuan was trading at its lowest level this year, with the central parity rate set at 7.1192 yuan to the US dollar, according to the China Foreign Exchange Trade System.

The central parity rate is based on a weighted average of prices offered by market makers before the interbank market opens each business day.

China’s central bank kept its one-year lending benchmark rate unchanged at 3.45pc and the five-year loan prime rate at 3.95pc on Thursday.

The one-year loan prime rate serves as a benchmark for the majority of corporate and household loans, while the five-year rate is used as a peg for real estate mortgages.

In Sydney, the S&P/ASX 200 edged 0.1pc lower to 7,766.30. South Korea’s Kospi added 0.2pc to 2,802.00.

Elsewhere, Taiwan’s Taiex gained 0.1pc, while Bangkok’s SET fell 0.3pc.