UK: Cabinet Giving Final Sign-Off Before Spending Review At ~12:30BST
Prime Minister Sir Keir Starmer is holding a cabinet meeting to give final sign-off to Chancellor of the Exchequer Rachel Reeves' Spending Review, set to be delivered later today. Ministers leading all gov't departments have now given their approval to their settlements, with Home Secretary Yvette Cooper seen to be the last holdout, likely indicating a sub-par settlement for the department in charge of policing, borders, and immigration (among other areas) in Cooper's view.
- The Mirror highlights the main announcements already known: £15.6 billion for public transport projects in England's city regions; £16.7 billion for nuclear power projects, including £14.2 billion for the new Sizewell C power plant in Suffolk; £39 billion over the next 10 years to build affordable and social housing; An extension of the £3 bus fare cap until March 2027; £445 million for upgrades to Welsh railways.
- These funds come as part of a mix of the GBP113B made available for infrastructure due to looser borrowing rules on capital investment, and the distribution of funds among the already-existing 'envelope' from the Autumn 2024 budget.
- Chancellor Reeves is set to deliver the Spending Review statement at around 12:30BST (07:30ET, 13:30CET). Livestream here.
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BOE: Lombardelli: Tariffs "not the dominating thing for monetary policy"
Q: Why did you not cut 50bp and why did you not have more tariff scenarios?
"The tariffs is not the dominating thing for monetary policy in the UK at the moment, right? That is about what we're seeing on domestic inflationary pressure... this is huge news on tariffs and trade and trade policy uncertainty. But actually... we're very open economy, but we're also very kind of service based economy, the tariffs that, in themselves, don't actually apply directly to that much sort of UK, UK, GDP, the tariff uncertain, the trade policy uncertainty... so far as it weighs on demand. And in particular, you'll see... we talked the other day about what we're seeing on the savings ratio, what we're seeing on investment. I mean, we do have very low levels of investment in our in our outlook. So you see it weighing on, on demand through that, but actually, in and of themselves, they're not the dominating thing. So you know, the question of, why did we not change your language very much? Why did you not change your approach very much? Why did you not do a series of scenarios about tariffs? The answer is, basically, that's not the dominating thing driving our policy decision at the moment, for a lot of the committee, I can't speak for all of the committee."
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BOE: Lombardelli on judging restrictiveness and the labour market
- "On restrictiveness, we think about this in a number of different ways. And actually what we do is... we have the sort of theoretical toolkit people, but actually in terms of judging it in sort of the current time, all we do is we look at a whole set of indicators, measures, data... particularly around things like financial conditions, but going well beyond that to things like the labour market, to what we're seeing in surveys, all of that, giving us a judgement of actually how much monetary policy is weighing on the economy. So if you take all of that together, you can see that there's still quite a lot of evidence out there that monetary policy is weighing on the economy, and that's why we judge the policy still restrictive."
- "I wouldn't take a very strong position on, assuming necessarily that the labour market will will not have changed structurally as well in some of these shocks. So I think it's a bit early to sort of say that. But of course, in the long run... yes, if you just take the individual shock of the war you would expect that to be temporary to feed through in that way."
