In 2007, work was completed on the new Wembley stadium, the final book in the widely popular Harry Potter series was published, and a relatively unknown senator from Chicago announced his audacious bid to become the first African-American President of the United States.
It was also the year in which the Bank of England last raised interest rates. That is set to change today as City economists are almost unanimous in their view that the Bank’s Monetary Policy Committee (MPC) will vote to increase the historically low rate when its nine members meet to assess how to boost an economy that has seen a general slowdown characterised by surging inflation, a weakening pound and diminishing consumer spending. Indeed, such is the apparent certainty about the outcome among observers, it is predicted that any other decision is likely to trigger a significant shock in financial markets.
The financial crisis, and the corresponding trauma in the UK economy, caused the initial cut a decade ago. The rate then stayed consistent at 0.5% between 2009 and August last year, when it was halved in an attempt to ease the economic impact of the Brexit vote.
So what will a rise mean? Charities and business groups have warned that an increase will put further pressure on households and businesses already struggling in a difficult economic environment. However, the mortgage lender Nationwide has described the impact for homeowners as “modest” and said it will only affect a relatively small proportion of borrowers – around 12% - whose repayments are linked to the base rate.
It’s not something I advise very often, but you might want to read the minutes from today’s MPC meeting, as they will likely provide some insight into the justifications for the decision made by each of the members on the committee. It will also be really interesting to see the Bank’s forecasts for the future. It has already said that any further rises will be “at a gradual pace and to a limited extent” but additional guidance may be provided today.
Theresa May is today expected to appoint a new defence secretary after Sir Michael Fallon stood down following allegations of inappropriate sexual behaviour. According to BBC political editor Laura Kuenssberg, a "radical reshuffle" is not likely, with a "sideways move or single shuffle up" more probable.
The Electoral Commission has begun an investigation into whether there was interference by Russia in last year’s EU referendum. Britain’s election watchdog said it was “in dialogue” with social media giants Facebook and Twitter about whether Russia tried to influence the result during the campaign, which follows allegations that the country attempted to affect the US presidential result. (£)
The man alleged to have driven the truck in Tuesday’s terrorist attack in New York, which killed eight people and injured a dozen more, has been charged with terrorism offences. US President Donald Trump has suggested on Twitter that Sayfullo Saipov should be sentenced to the death penalty. (£)
The Houston Astros have won baseball’s World Series for the first time, beating the LA Dodgers 5-1 in the deciding game.
BUSINESS AND ECONOMY
President Trump is expected to name Jay Powell as his nominee to replace Janet Yellen as the next chair of the Federal Reserve. A centrist on monetary policy, Powell has been a Fed governor since 2012. (£)
A deputy governor of the Bank of England has warned that 10,000 jobs could leave the City on “day one” after the UK leaves the EU. Speaking during an appearance at the Lords EU financial affairs sub-committee, Sam Woods also said that forecasts of 75,000 job losses over the long-term were “plausible”.
Electric car manufacturer Tesla has admitted that it has pushed back production targets for its new Model 3 car as it reported its largest quarterly loss yesterday. Tesla said it would now produce 5,000 Model 3 cars each week within the first three months of 2018, instead of December this year. The company reported a third-quarter loss of $619 million, compared with a profit of $22 million a year ago. (£)
What happened yesterday?
The FTSE 100 closed 5.12 points down yesterday to 7,487.96, with a number of big name retailers seeing their shares drop.
The biggest faller was Next after it announced that third-quarter trading had been "extremely volatile”. The retail giant posted a drop of 9.1%, while online sales growth continued to offset falling High Street sales. The outcome caused a knock-on effect in the sector, with Debenhams, M&S, and Primark owner Associated British Foods all recording share decreases.
It was a rather better day for Paddy Power Betfair, which enjoyed an increase of 4.5% thanks to higher third-quarter revenues and a small increase to its full-year earnings forecast.
On the currency markets, the pound fell 0.16% against the dollar at $1.3262, but was 0.05% higher against the euro at €1.1411.
International Biotech Trust
3i infrastructure, BT Group, Tate & Lyle
UK Economic Announcements
(09:30) PMI Construction
(12:00) BoE Interest Rate Decision
International Economic Announcements
(08:55) PMI Manufacturing (GER)
(09:00) PMI Manufacturing (EU)
(09:00) Unemployment Rate (GER)
(12:30) Continuing Claims (US)
(12:30) Initial Jobless Claims (US)
COLUMNS OF NOTE
Writing in The Telegraph, Con Coughlin says the resignation of Sir Michael Fallon has come at a bad time for the armed forces. He says that with difficult decisions needing to be taken in the next couple of months on potentially damaging cuts, Fallon was someone who had “mastered his brief and won the genuine respect of senior officers for his commitment to the military cause”.
The Guardian’s Simon Jenkins analyses the contrast in Donald Trump’s reactions to two recent US terror attacks. Jenkins notes that the president promised further immigration controls in the wake of Tuesday’s attack in New York, but says there was no hint of ‘extreme vetting’ for gun-owners in the wake of the Las Vegas massacre.
DID YOU KNOW?
A map went viral recently on social media as it singled out Scotland as the only country in the world in which the most popular drink was not made by the Coca Cola company. No prizes for guessing what came out on top as Scotland’s national drink…
House of Commons
Oral questions: Exiting the European Union (including Topical Questions)
Debate on a Motion on Calais and unaccompanied child refugees in Europe - Heidi Allen
Debate on a Motion on sexual harassment and violence in schools - Maria Miller
House of Lords
Allocation of the £5 million public fund celebrating the centenary of women acquiring the vote - Baroness McDonagh
Supporting the return of residential properties, presently let on a short-term basis, to the long-term housing rental market - Baroness Gardner of Parkes
Effectiveness and enforcement of the Scrap Metal Dealers Act 2013 - Lord Faulkner of Worcester
Short Debate: Government assessment of the condition of refugees and migrants still in Calais and the surrounding area, one year on from the refugee camp there being demolished - Lord Roberts of Llandudno
First Minister’s Questions
Scottish Government Debate: Presumption of Mainstreaming
House of Commons
No business scheduled
House of Lords
No business scheduled
No business scheduled