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JUST STOP IT Anti-oil protestors come to global green finance hub
BANK EXPECTED TO HIKE TODAY AND EXPERTS WARN LEVEL WILL STAY ELEVATED FOR SOME TIME YET JACK BARNETT THE BANK of England is poised to back a 12th straight interest rate hike today, marking what some experts reckon will be the death of the era of ultra-cheap money. Bank governor Andrew Bailey (pictured) and the rest of the Monetary Policy Committee (MPC) – the nine-member group tasked with setting interest rates in the UK – will vote for a 25 basis point increase, hoisting borrowing costs to a near 15-year high of 4.5 per cent, the City suspects. Inflation in the UK is running at a historic high of 10.1 per cent and has been in the double digits since last summer, likely luring Bailey and co into piling more misery on businesses and families in a bid to tame prices. JD Wetherspoon boss Tim
Martin yesterday stressed inflation remained an “intractable issue” for the hospitality sector and slammed MPs for “a lack of understanding” how inflation could be tackled by freeing businesses from red tape. Britain’s inflation problem is proving much harder to tackle than the US’s and Europe’s. Numbers out yesterday showed the rate of price increases across the pond fell unexpectedly to 4.9 per cent last month. That decline strengthened Wall Street’s expectations that the Federal Reserve – the Bank’s American equivalent – will end its aggressive interest rate rise campaign at its next meeting on 14 June. However, the Bank may eventually send rates to a peak of at least 4.75 per cent and could have to keep policy tight for several years to prevent an in-
flation resurgence. UK borrowing costs are on course to top four per cent for the whole of this year and next and still be running at 3.25 per cent in 2027, according to forecasts out today from Britain’s oldest economic think tank, the National Institute of Economic and Social Research (NIESR). If the projections play out, Britain’s monetary policy playbook of the last decade or so would be ripped up. That move “represents a regime shift that ought to be handled with great care,” Jagjit S Chadha, director of NIESR, said. Between March 2009 and April 2022, UK interest rates were kept below one per cent after they were slashed in response to the 2008 global financial crisis and the Covid-19 pandemic. Not everyone thinks Bailey and co should raise rates today. Six members of the Institute of Economic Affairs’ shadow MPC said rates should be kept unchanged. Two backed cuts.
JACK MENDEL AND REPORTERS JUST STOP OIL brought chaos to the Square Mile yesterday morning, blocking roads around Moorgate and Bank junction during the morning rush hour. Commuters were met with the sound of angry horns and bus drivers telling passengers to walk as the twodozen protestors marched through the capital. The police eventually intervened
to move the protestors on to the pavement. The campaigners were protesting the investment in new oil and gas projects by some City firms. London is regarded by most surveys as the leading global hub for green finance, with more than 100 green exchange-traded funds, and where more than £100bn-worth of sustainability-related bonds have been issued in recent years, as per research by think-tank Z/Yen.
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