Kate Andrews

Interest rates have been held at 4.75 per cent. The Bank of England's Monetary Policy Committee voted 6-3 to maintain the base rate, with the minority voting to further reduce rates by 0.25 percentage points. This is an unsurprising move from the Bank of England. Markets weren’t optimistic that another rate cut would follow so soon after last month’s 0.25 percentage point cut. But after this week’s labour market data – showing that wages are up – and inflation data – showing prices up, too – it was highly unlikely a cautious Bank was going to push ahead with another rate cut this month. Today’s minutes reflect these concerns. ‘Services consumer price inflation has remained elevated’ the Bank notes.

Good news for workers: wages are up. According to the latest data, released by the Office for National Statistics this morning, annual pay increased by 5.2 per cent in the three months leading up to October.  Despite inflation returning broadly to the Bank of England’s 2 per cent target, these above-inflation wage increases will be providing relief, still, for workers who are still coping with significantly higher prices as a hangover from the inflation crisis. But a positive story for employees is often more worrying news for Threadneedle Street, which insists that wage increases risk second-round inflationary effects.

‘Hear me when I say this – no more money without reform.’ That was the Prime Minister’s message to the NHS only in September, when he promised the biggest reform of the health service since its founding.  But that’s not quite how it has panned out. Labour’s first Budget, which raised an additional £40 billion in tax, also announced an additional £22 billion for day-to-day spending within the NHS. Having allocated more than half of the tax rises to the health service, the promise from Keir Starmer and Rachel Reeves was that improvements would be forthcoming. It’s not obvious, however, that the NHS agrees.

Forecasts are one thing, results are another. It’s a tough morning for the government, as the Office for National Statistics publishes the first quarterly growth figures since Labour entered Downing Street. The figures are disappointing: the UK economy only managed to grow by 0.1 per cent between July and September, lower than had been expected (market consensus was 0.2 per cent). Furthermore, GDP fell by 0.1 per cent in September this year, with production output – which contracted by 0.5 per cent – acting as the main contributor to the fall. The news lands just after Rachel Reeves’s first Mansion House speech, where free trade, city regulation and pension reform were all mentioned as part of Labour’s strategy to grow the size of the economy.

When Chancellor Rachel Reeves announced that over half the new tax rises in her first Budget would go straight into the National Health Service, an immediate question followed: where’s the reform? The big health promise made by this government, after all, was to tie any additional money to an NHS overhaul – the biggest in its history. And it was the Prime Minister who only a few months ago, when speaking at the Kings Fund in London, said ‘hear me when I say this, no more money without reform'. Yet there in the Budget was an additional £22 billion for day-to-day spending, with seemingly no strings attached. The biggest announcement on the NHS so far has been a nation-wide consultation to offer suggestions to improve the health service (the nation has some interesting answers).