Bank of England boss Andrew Bailey rapped by MPs for ‘confusing guidance on interest rates’
THE Bank of England was hauled over the coals by MPs yesterday for its confusing guidance on interest rates.
Harriett Baldwin, chair of the Commons business select committee, scolded governor Andrew Bailey and his officials for their “confusing running commentary” which made it harder for businesses and mortgage holders to make decisions.
Mr Bailey was also tested by MPs on the Bank’s record on bringing down inflation and was asked how it will react next year.
The Bank has been widely criticised for its poor forecast on the labour market and for wrongly predicting the UK would be plunged into a two-year recession.
Markets have also lost faith in the Bank’s forecasts.
Despite Mr Bailey dropping hints that interest rates will stay high for longer, the money markets are still betting that a cut from the current 5.25 per cent will be made in June.
Some analysts believe it could be as early as the Spring.
The pound, government bonds and FTSE 100 have also been largely unmoved by Mr Bailey’s predictions.
Interest rates have risen from 0.1 per cent in November 2021 to the current 15-year high.
Economists have suggested that there has been a rift in the Bank, with Mr Bailey warning that it was too soon to start talking about rate cuts but chief economist Huw Pill saying it was not unreasonable for markets to price in lower levels by next summer.
Sir Dave Ramsden, the deputy governor, said: “Markets are entitled to their view, but that doesn’t mean we are validating that view when we comment on it.”
Mr Bailey said there “is a case for holding the rate where it is for an extended period”.
Catherine Mann, a member of the Bank’s Monetary Policy Committee who has previously voted in favour of higher interest rates, told the Select Committee: “I think actions speak louder than words, especially when you deal with the markets.”
Deliveroo riders ‘not workers’
DELIVEROO riders might wear the company’s uniform but they cannot be classed as “workers” or form staff unions, the Supreme Court ruled yesterday.
The court’s decision that riders are self-employed will have big implications for the “gig economy”.
The Independent Workers Union of Great Britain, which has been fighting for delivery riders to have the right to collective bargaining, said the ruling was a disappointment
In 2021 the Supreme Court took a different stance with Uber and ruled its drivers were entitled to rest breaks, minimum wages and holiday pay because they were dependent on the taxi app for work.
Shell in zero taz shocker
OIL giant Shell paid zero tax on more than £1billion of trading arm profits last year because the division is based in the Bahamas
Shell has come under mounting pressure to be more transparent about its trading arm.
It won’t even disclose how much it makes from buying and selling commodities, or how many staff are employed in its trading arm.
However, Shell’s tax contribution report reveals that its Bahamas-based trading division, which has just 37 staff, made £22billion in trading revenues and £1.2billion in sales.
International companies do not have to pay corporate tax in the Bahamas, where Shell has been based since 2002.
Shell paid £32million in UK tax last year — the first time in four years it has paid any tax in Britain — because of the windfall levy on oil and gas firms.
Before that its investments in the North Sea meant it could book tax rebates.
Bangers’ bad news
A SHORTAGE of butchers is pushing up the price of bangers and bacon, according to food producer Cranswick.
The firm, which makes sausage casings, said it had hiked prices to cover the cost of hiring extra workers and the increased ingredients and energy costs.
It said sales had risen 12 per cent to £1.2billion while profits had grown 41.3 per cent to £86.9million.
Profits were helped by there being no repeat of avian flu this year.
Capita jobs cut
OUTSOURCING company Capita is cutting 900 jobs.
The business that manages the BBC licence fee and runs contracts for local councils, said the staff cuts would save around £60million a year.
Boss Jon Lewis said the move reflected an “accelerated delivery of efficiency savings”.
A cyber attack hit Capita earlier this year, which it said would cost £25million.
But it won a £239million contract this week to manage civil service pensions.
A THIRD of Brits work from home in their pyjamas and do it an average 46 times a year.
A survey of 1,000 workers by employment site Indeed found more than half wear something smart on top for video calls but stay scruffy on the bottom half.
All go for A.O
ONLINE electricals retailer AO World has steered its way back to profit after introducing delivery charges.
The company axed its international businesses earlier this year to bolster its balance sheet and posted half-year profits of £13million compared to a £12million loss last year.
Service revenues jumped by 30 per cent to £30.4million after it charged customers delivery fees on all orders.
But sales fell 12 per cent to £482million, largely due to a steep fall in demand for new mobile phones.