The Bank of England (BoE) cut interest rates from 5.25% to 5% yesterday in a close-run decision which saw members of the rate-setting Monetary Policy Committee (MPC) vote 5-4 for the cut, the first cut since March 2020. Interest rates began to rise from a record low of 0.1% in December 2021, and they had been on hold at 5.25% for almost a year. After the MPC meeting, BoE governor Andrew Bailey said: “Inflationary pressures have eased enough that we’ve been able to cut interest rates today,” while warning that the Committee would be careful not cut interest rates “too quickly or by too much”. “Ensuring low and stable inflation is the best thing we can do to support economic growth and the prosperity of the country," he said. Bailey was among the five MPC members voting for the cut. There was doubt rates might not be cut because although inflation has fallen to the BoE’s 2% target for two consecutive months, services inflation remains sticky, at 5.7%. Bailey refused to be drawn on future cuts, telling reporters at the traditional post-MPC meeting press conference: "I'm not giving you any view on the path of rates to come, I'm saying we will go from meeting to meeting, as we always do”.

Responding to the BoE interest rate cut, Chancellor Rachel Reeves welcomed it, but said that "millions of families" still faced higher mortgage rates because of former Prime Minister Liz Truss's so-called ‘mini-budget’, despite the fact the BoE, her former employer, produced a report earlier this week concluding that the Bank itself must shoulder much of the responsibility for the aftermath of that budget statement. Former Conservative Prime Minister Rishi Sunak, meanwhile, said on X that the cut was “good news for homeowners and shows Labour inherited a strong economy”. He added, however: “My concern now is that Labour's inflation-busting public sector pay rises have put further cuts at risk. Reeves confirmed on Monday that she would approve public sector pay rises of between 5% and 6%.

Meanwhile, the failure of the US Federal Reserve to cut interest rates sent global stock markets tumbling yesterday. Federal Reserve chairman Jerome Powell indicated a first interest rate cut would only come in September as rates were held at 23-year highs of 5.25% to 5.5%. The news came as weaker-than-expected US factory data showed output dropped to an eight-month low in July amid a slump in new orders, and unemployment hit 4.1%, the highest it has been since 2021, leading to fears the central bank has missed its opportunity to cut rates to prevent a recession. Japan’s Nikkei 225 index closed 5.8% down – its second-largest points drop in history – and markets in Hong Kong, South Korea, China and Australia also dropped sharply. In the UK, the FTSE 100 closed 1.01% down. The sell-off was exacerbated by a tech sell-off on Wall Street as results from Apple, Amazon and Intel failed to impress. Apple iPhone sales dropped to their lowest level in three years, and Intel announced it would cut 15% of its workforce — equating to some 15,000 jobs – in order to better compete with rival chipmakers such as Nvidia and AMD. Amazon announced it had doubled its profit in the second quarter of the year but predicted a slowdown in sales growth to 9.5%, wiping 4% off its share price.

The new Labour government has pulled £1.3bn in funding promised by the Conservatives for tech and Artificial Intelligence (AI) projects, the BBC has learned. Projects affected include £800m for the creation of an exascale supercomputer at Edinburgh University and a further £500m for AI Research Resource, which funds computing power for AI. The Department for Science, Innovation and Technology (DSIT) said the money was promised by the previous administration but not allocated in its budget, while shadow secretary Andrew Griffith said that when the election was called, “ministers had been advised by officials that the department was likely to underspend its budget for the current financial year". DSIT Secretary of State Peter Kyle said: "The government is taking difficult and necessary spending decisions across all departments in the face of billions of pounds of unfunded commitments. "This is essential to restore economic stability and deliver our national mission for growth." He added his department remained "absolutely committed" to building technology infrastructure in the UK.

GPs in England have voted to take industrial action in a dispute over funding and contract changes.

The British Medical Association (BMA) trade union said more than 8,500 GPs had taken part in the ballot with 98.3% voting in favour of collective action including stopping work they are not formally contracted to do; pulling out of patient data sharing agreements; and potentially limiting the number of patient appointments per day. The BMA said it was the first time GPs had voted to take sole industrial action in 60 years. although they did take part in industrial action organised by a wider group of doctors in 2012. "GPs are at the end of their tether. This is an act of desperation. For too long, we've been unable to provide the care we want to. We are witnessing general practice being broken," Katie Bramall-Stainer, chair of BMA's GP committee for England, said. Matthew Taylor, CEO of the NHS Confederation, said the decision was "disappointing".

Retail footfall fell in July for the twelfth consecutive month, according to the latest figures from the British Retail Consortium. Total footfall decreased by 3.3% in the month, down from a fall of 2.3% in June, attributed to summer spending on holidays rather than retail, plus the effects of the general election and the lingering cost-of-living crisis. However, while retail park footfall and shopping centre footfall fell by 0.8% and 3.9% respectively, high street footfall increased by 2.7%, having fallen 3.1% in June.

Authorised push payment fraud (APP) totalled 252,000 cases and £341m misappropriated in 2023, the Payment Systems Regulator (PSR) says, a 12% increase in volume in 2022, but a 12% decrease in money lost. Push payment fraudsters are basically criminals who pose as genuine payees to trick victims into making payments for non-existent purchases or investments, or in romance scams. 67% of money lost to such bank transfer scams was reimbursed last year, the PSR said, adding that while this was an improvement from 61% in 2022, "there is still an inconsistent approach by firms when it comes to reimbursing victims. Currently, only the sending firm makes any reimbursement, ignoring the vital role receiving firms play in preventing scammers from accessing the UK's payments systems". The PSR also noted that whether or not victims were reimbursed still largely depended on which bank they use. New powers given to the payments watchdog under the Government’s Financial Services and Markets Act to force banks and other payment firms to refund APP scams up to £415,000 have been put on ice amid concerns few are ready to implement them, meaning payments system could grind to a halt because of excessive checks and balances to ensure compliance. “There is literally a chance that people don’t get money or can’t pay for services or things that they want to in a timely manner because of firms having to deal with this – big and small,” according to one senior unnamed industry figure quoted by City AM in June. Trade body The Payments Association is also lobbying for a lower refund limit of £30,000, while the fintech trade body Innovate Finance wants a £85,000 limit, which it says would cover 99.7% of cases.

The Government has ‘called in’ Czech billionaire Daniel Kretinsky's £3.57bn proposed takeover of Royal Mail parent company International Distribution Services (IDS) for closer scrutiny under the National Security and Investment Act. The bid from Kretinsky’s EP Group will be suspended in the meantime. as the Government could block the takeover, despite EP Group already having a 27.5% share in IDS. At particular issue, the BBC understands, is its gas transmission business called EUStream that carries Russian gas into Europe, however, this is done with the knowledge and permission of the European Union (EU) and does not involve any trade in Russian gas. The probe could take up to two months, although government officials said they hoped they could make a decision sooner. Business Secretary Jonathan Reynolds recently held direct talks with Kretinsky which he said at the time were "ongoing and have been constructive". The process will be run by the Cabinet Office with input from the Department for Business and Trade.

Phoenix Group, the country's largest savings and retirement business, and investment manager Schroders have joined forces to form Future Growth Capital which will invest as much as £25bn of pension money in high-growth British companies not listed on the stock market, over the next three years. The two say the move will support the objectives of the Mansion House Compact, introduced by former Chancellor Jeremy Hunt to unlock investment return opportunities that unlisted assets can offer.

Flooding in Switzerland has “paralysed” top aluminium producer Novelis, The Telegraph reports, causing major disruption to carmakers including Jaguar Land Rover, Porsche, BMW and Mercedes. The factory in the alpine city of Sierre was forced to shut down operations at the end of June and the luxury vehicle manufacturers are said to be “scrambling” to find alternative suppliers.

Rolls-Royce says it will restart paying dividends to shareholders after a four-year gap on upgraded profit expectations. British Airways owner IAG has also unveiled plans to reinstate dividend pay-outs for the first time since Covid-19 lockdowns brought the aviation industry to a near standstill.

Bolt, the ride hailing platform, has launched a scheme to guarantee its UK drivers are paid the national living wage while remaining independent contractors. Should a driver’s earnings, excluding tips, come in lower than £11.44 an hour, they will be topped up by the firm, which will also provide drivers with holiday pay. However, Andy Prendergast, GMB National Secretary, described Bolt’s new scheme as a “cynical ploy” as it comes within weeks of the trade union launching legal action against Bolt on behalf of drivers to declare their status as workers which would guarantee them the minimum wage and holiday pay. “It’s too little, too late,” he said. In 2021, a landmark Supreme Court ruling forced Bolt’s rival Uber to treat its drivers as workers rather than self-employed, thereby entitling them to minimum wage and holiday pay, City AM says.

The Serious Fraud Office (SFO) has charged five former Glencore employees over allegations of conspiring to make corrupt payments in order to benefit the mining giant’s oil operations in West Africa. The FTSE 100 miner was itself charged in 2022 with seven counts of bribery in connection with its oil operations and convicted on all charges after the company pleaded guilty. Glencore was fined £280m. Now, former employees Alex Beard, Andrew Gibson, Paul Hopkirk, Ramon Labiaga, and Martin Wakefield face various bribery charges relating to payments to government officials and officials of state owned oil companies in Nigeria, Cameroon and the Ivory coast between 2007 and 2014. A hearing is scheduled for 10am on Tuesday 10th September at Westminster Magistrates’ Court. SFO director, Nick Ephgrave said: “Bribery damages financial markets and causes lasting harm to communities. Today’s action is an important step towards exposing overseas corruption and holding those who are responsible to account”.

Two former directors of Chill Brands Group have been accused by the London-listed vaping company of "blatant fraud" and embezzlement by allegedly misusing funds for personal expenses and using a company email account to "engage with an X-rated business for personal purposes". Antonio Russo, Chill’s former chief commercial officer, and Trevor Taylor, its former chief operating officer, are being sued by the firm in the US in an attempt to regain control of its chill.com domain and some trademarks.

British businessman Mike Lynch, who in June was acquitted in the US of multi-billion pound fraud allegations over the sale of his tech company, Autonomy to Hewlett-Packard, has told the BBC he believes he was only able to clear his name because of his huge wealth. Lynch, who was put on house arrest in the US after being extradited in 2022 to face 17 charges of fraud, told the Radio 4 PM programme:  "The reason I'm sitting here, let's be honest, is not only because I was innocent... but because I had enough money not to be swept away by a process that's set up to sweep you away." Most people, even they sold all their assets, would run out of funds in a matter of months, he said, arguing that such a situation "has to change." "You shouldn't need to have funds to protect yourself as a British citizen", the man once dubbed ‘Britain’s Bill Gates’ added. He also criticised the Government for allowing his extradition in the first place, saying it is far too easy for British people to be tried in the States. "The British government needs to defend its citizens," he said. Lynch, 59, would have spent two decades in jail if he had been convicted.  

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