Kate Andrews

Last month the Bank of England announced its tenth rate rise in a row, taking interest rates to 4 per cent. At the time it was speculated that the BoE might end there: not only were rates now catching up with market expectations of where they would peak, but there seemed to be more agreement within the Monetary Policy Committee, based on the way its members were voting, that it was time to slow down. Their own report noted that, to keep hiking rates, the Bank would need to see ‘persistent pressures’ contributing to inflation. But the Bank’s governor reminds us once again that nothing is off the table.

When Liz Truss ushered in the Energy Price Guarantee (EPG) last September, her government insisted that a universal subsidy scheme was necessary to make sure no one fell through the cracks this winter. But there was an internal argument for the scheme too: put a big down payment on energy bills now, No. 10 thought, and that will give cover to implement her tax-cutting agenda. The latter, as we know, didn’t pan out. And now Truss’s biggest policy from her time as prime minister – one that ushered in price controls, as ministers determined what household would pay for the unit price of energy – might be at the start of its end.

It was only a few weeks ago that Liz Truss started commenting on domestic policy again, speaking to The Spectator not just about what happened during her time in No. 10, but about what she sees as prescriptions for Britain's stagnant economy. Today she weighs back in on foreign policy. In Tokyo this morning, the former prime minister made her first international speech since leaving office and it combined her favourite topics: economic freedom and taking a tough stance on China. Truss is calling for world leaders to band together and create an ‘economic Nato’ – which would include agreeing to a tough package of economic sanctions on China, were President Xi to make aggressive movements against Taiwan.

The latest labour market update – published by the Office for National Statistics this morning – looks a lot like last month’s update: that’s to say, a mixed bag of news. Unemployment rose again, up 0.1 per cent between October to December, to 3.7 per cent. But this quarterly rise was once again off-set by a fall in economic inactivity: down 0.3 percentage points, largely thanks to young workers entering (or re-entering) the workforce.  Overall, it’s a trade-off worth making: the official unemployment figure has failed for some time to reflect the true number of people out of work, as over two million people of working age are thought to be missing from the labour force due to health ailments, while 5.

Treasury select committee meetings are not usually the stuff of great television. But this morning, it was. The Bank of England’s governor Andrew Bailey was up as a witness to give evidence on recent Monetary Policy reports. And the committee’s new chair, Harriett Baldwin, came ready to highlight where (many) mistakes had been made. Starting with where we are today – inflation still over 10 per cent, five times the Bank’s target – Bailey was forced to sit and listen to his own record over the past eighteen months. Beginning in May 2021 and moving into that autumn, Baldwin quoted his own warnings about ‘very hot areas of prices’ back to him.