The US central bank has cut its key interest rate again as Donald Trump’s election as president raises new uncertainty about the future for borrowing costs.

The cut puts the Federal Reserve’s lending rate in the range of 4.5%-4.75%.

It marks the second drop in a row after the Fed lowered rates for the first time in more than four years in September, indicating confidence that price rises were finally stabilising.

Forecasters have been expecting borrowing costs to fall further in the months ahead but warned that Trump’s plans for tax cuts, immigration and tariffs could keep pressure on inflation and drive up government borrowing, complicating those bets.

Interest rates on US debt have already jumped this week, reflecting those concerns.

The Fed’s key rate – what it charges banks for short-term borrowing – sets a benchmark for lending across the economy, influencing how banks set interest rates for credit cards, mortgages and other loans.

Those borrowing costs have been hovering at the highest rates in two decades, after the Fed rapidly hiked rates in response to inflation in 2022, bringing its key rate to roughly 5.3%.

The cut announced on Thursday, which was widely expected, lowered rates by 0.25 percentage points.

Fed officials said there had been “progress” on inflation, but that it remained “somewhat” above its 2% target.

Central bank policymakers said they were equally focused on keeping prices stable and the job market healthy, echoing language used in their last meeting.

The pace of price rises in the US stood at 2.4% in September, down from more than 9% in June 2022, according to the latest official figures.

BATCH cooking saves time and cash, plus can help you enjoy tastier and nutritious meals.

You can also make grub go further by adding cheaper foods to balance out pricier ingredients such as meat.

7

Here’s how to affordably bulk out your meals so you have more to save and freeze for another day.

OATS: Typically seen as a breakfast meal, but a handful or two can be used to thicken almost any sauce and add substance.

Use fine- milled varieties or blitz in a processor to help them blend in. Packs can be found for less than £1.

PULSES: Packed with protein and nutrients, beans and pulses are an excellent way of adding variety to dinners without breaking the bank.

Kidney beans are often found in chilli con carne but you could add a tin of black beans too (49p at Tesco).

Lentils work well with a cottage pie mix and chickpeas are excellent added to curries.

FRIDGE RAID: Many people follow recipes word for word, but often you can adapt to use up ingredients you already have.

Check your fridge for vegetables that can be added.

Tomatoes, broccoli, peppers and the like are incredibly versatile and work in many sauce-based dinners, helping to cut down on waste and increase the volume of your meal.

FROZEN VEG: Stretch out meals and add nutrients by adding a couple of handfuls of frozen veg such as peas, sweetcorn or broad beans.

Keeping these in the freezer ensures they won’t go bad before you use them and can be used in many dishes.

RICE: Add a couple of handfuls of rice to soup, casseroles and stew for a heartier and fuller meal with extra texture and minimal costs.

POTATOES: Chopped spuds are perfect for adding to curries and stews.

You can par-boil or just make sure you cook sauces long enough to get your potato nice and fluffy.

• All prices on page correct at time of going to press. Deals and offers subject to availability.

Deal of the day

7

BRUSH up on your dental hygiene with the Oral-B pro 3, down from £100 to £35 at Argos.

SAVE: £65

Cheap treat

7

FILL your home with a luxury scent with Deluxe candles, £3.99, in Lidl this week.

What’s new?

SWEETEN up festivities with limited-edition packs of Haribo’s merry mix, £1.25 from Asda.

Top swap

7

Advertisement

7

WITH flavours of cherries, chocolate and vanilla, 19 Crimes cabernet sauvignon, £10.99 at waitrosecellar.com, is a delicious full-bodied red.

Or sip on Aldi’s The Reprobates, £7.19, for a similar taste.

SAVE: £3.80

Shop & save

7

Advertisement

GIVE any outfit a touch of the wild with these animal print ankle boots, down from £45.99 to £27.59 at New Look.

SAVE: £18.40

PLAY NOW TO WIN £200

7

JOIN thousands of readers taking part in The Sun Raffle.

Every month we’re giving away £100 to 250 lucky readers – whether you’re saving up or just in need of some extra cash, The Sun could have you covered.

Every Sun Savers code entered equals one Raffle ticket.

The more codes you enter, the more tickets you’ll earn and the more chance you will have of winning!

SOMETIMES you just want to be somewhere hotter than the UK without having to hop on a long-haul flight.

Thankfully, there are some great destinations that aren’t too far away, and also won’t cost too much even if booking last minute.

7

Using our many years of holiday experience, the Sun Travel Team has revealed their favourite winter sun destinations that are affordable – and all less than six hours from the UK.

Cape Verde – 5hr45 flight time

Cape Verde was my first foreign holiday after the dreaded 2021 winter lockdown. As soon as restrictions lifted, my then three-year-old, boyfriend and I jumped on a TUI plane for some much-needed sunshine.

At just under six hours, the flight time was probably the longest I’d
do with a pre-schooler but enough to find guaranteed winter sunshine – and Cape Verde pretty much guarantees sunshine.

Even in bleak midwinter, 25C is the average maximum temperature and the sun is strong, although you never get too hot because it’s also windy.

It’s also just one hour behind the UK, so there was no jet lag to contend with.

We stayed at the all-inclusive Riu Palace Santa Maria, on the south
west coast of the island of Sal.

The nearby seaside town of Santa Maria had a strip of lively bars and
cafes and a number of seafood restaurants offering the catch of the
day, as well as a great beach bar where you could enjoy excellent
cocktails with your feet in the sand for just £2.50.

Attractions are fairly sparse on Sal, but there was more than enough
to keep us busy for a week.

We paddled with baby sharks, took a catamaran cruise and explored the island on dune buggies, but there were plenty of watersports for the more adventurous too.

– Caroline McGuire, Head of Travel

7

7

Marrakech – 3hr35 flight time

A place guaranteed to be warm in winter is Marrakech with temperatures above 20C – and it’s one of the most affordable to.

A visit to Marrakech comes with beautiful riad hotels, lined with multicoloured tiles and ornate decor and even pools in the middle – and can be found for just £35 a night.

Sure, the Moroccan coastline might temp you away for a winter beach break.

But the bustling city is the best to go pre-Christmas to stock up one some cheap presents.

Go empty suitcased and you’ll find hand blown glass cups, embroidered cushions and leather handbags often spotted on the UK high street in places like Anthropology and Accessorize but for so much less.

And with £16.49 flights thanks to easyJet, it’s cheaper than a train into London.

– Kara Godfrey, Deputy Travel Editor

7

7

Advertisement

Lanzarote – 4hr flight time

I on my first winter sun holiday earlier this year and even though I’m late to the party, I’m a total convert after falling in love with Lanzarote.

I stepped off the plane in January and was met by a 20C heat – the ideal January pick me up, especially when flights are as little as £16.

And I was even happier when I went for a dip at the heated infinity pool at my hotel, the newly-opened Barcelo Playa Blanca.

The 180m-long main pool was also heated, which meant I could get my lengths in without getting chilly. 

The temperature was perfect for excursions too with four-hour boat cruises around the island, stopping near Playa de Papagayo, a golden sandy beach before a dip in the dip in the water and fresh paella.

Topped off off with evening drinks on a balcony looking out towards Fuerteventura, I didn’t once have to take out my big winter coat – which was exactly the plan.

– Hope Brotherton, Travel Reporter

7

Advertisement

7

For years, German chancellor Olaf Scholz was blamed for his seeming inability to instil discipline in his warring cabinet, for his gnomic silence in the face of constant ministerial feuding.

This week, the sphinx finally spoke. And in a few words he brought down the government. 

Scholz appeared before reporters on Wednesday evening to announce he had sacked his finance minister Christian Lindner, in effect pulling the plug on his coalition. 

He described Lindner in ways that drew gasps of astonishment from those present: “selfish”, “irresponsible” and caring “only about the short-term survival of his own party”.

The question on many people’s lips was — what took him so long?

“He should have issued Lindner an ultimatum a long time ago,” said Wolfgang Schroeder, a political scientist at Kassel University. “Either you work with us constructively or we go our separate ways.”

Scholz’s coalition was never a particularly stable construct. It was a political experiment — the first three-way coalition comprised of the chancellor’s Social Democrats (SPD), Lindner’s liberal Free Democrats (FDP) and the Greens — parties that were awkward bedfellows from the very start.

The alliance was unveiled to much fanfare after elections in late 2021 and immediately launched a progressive programme that marked a fresh start after the inertia of the Angela Merkel era.

But its plans were quickly upended by Russia’s full-scale invasion of Ukraine in February 2022.

Scholz had predicted that Germany’s green transition would bring about a new “economic miracle”, with growth rates not seen since the boom years of the 1950s. Instead he found himself trying to figure out how to get Germany through the winter without Russian gas.

He and his ministers rose to the challenge, largely overcoming the energy crisis. They also reoriented German defence and foreign policy, in what Scholz dubbed a Zeitenwende, or turning point, agreeing massive supplies of weapons to Ukraine and a huge rearmament programme for the Bundeswehr. 

But the outward unity masked deep ideological fissures. The SPD wanted to shore up the welfare state, the Greens wanted action on climate change, and the FDP was obsessed with making sure Germany did not take on too much public debt.

“Our many political differences were papered over by all the money we had available,” Lindner said on Thursday. “That allowed us to reconcile political ideas that were essentially incompatible.”

Last year, that whole construct came crashing down.

In a bombshell judgment in November 2023, Germany’s constitutional court struck down Scholz’s budget on the grounds that it had violated the “debt brake”, the country’s constitution-enshrined cap on new borrowing. That opened up a massive fiscal hole that the coalition parties have struggled to fill.

Suddenly, the three parties were squabbling publicly over what to do. The SPD and the Greens wanted to suspend the debt rule to allow the state to borrow more money for Ukraine, and invest in infrastructure. Lindner, as head of the FDP, resolutely resisted those demands.

The tensions only increased as Germany’s economic prospects darkened. The country was grappling with falling output in its auto, chemicals and engineering industries. This autumn ministers downgraded their growth forecasts, admitting that Germany was now stuck in its first two-year recession since the start of the 2000s.

That played havoc with the government’s spending plans, forcing Lindner to lower his estimate for next year’s revenues. A €13.5bn hole opened up in the budget for next year. The bickering over how to bridge that gap became ever more feverish.

Lindner said on Thursday the parties had “always hoped” they could make progress through compromising with each other. But “the way the economy was and the way the public finances were heading, this limbo, this policy of the lowest common denominator, was no longer possible”.

Scholz tried for months to mediate between the feuding parties and steady the ship of state. On Wednesday he admitted how hard it had been to reach compromises. “Sometimes I went hard up against the limits of my political convictions,” he said.

“It’s hard to bang the table in such a disparate coalition — you end up smashing a lot of porcelain,” said Ursula Münch, director of the Academy for Political Education in Tutzing, Bavaria. “But he could have been a bit clearer about what he wanted to achieve, and communicated it better.”

At a town-hall meeting in Berlin in September Scholz was assailed by a kindergarten teacher who accused ministers of behaving like a “bunch of kids”. With a look of helplessness the chancellor asked him what his remedy was, adding with a smile: “I’m asking for a friend.”

As the economy worsened and the squabbling intensified, the coalition parties’ approval ratings slumped. All three performed disastrously in elections in eastern Germany in September that saw strong gains for populist parties of the right and left. A poll from late last month showed the combined ratings of the SPD, Greens and FDP were now less than that of the opposition Christian Democratic Union — Merkel’s conservative party.

Scholz’s aides routinely defended his style of government. His was a “steady hand on the tiller”, he was imperturbable and level-headed, and flexible enough to find solutions when his cabinet colleagues fell out. 

On Ukraine he had pursued what he himself called a “prudent” course, navigating between pacifists in his own party who craved a swift end to the war and the more gung-ho pro-Kyiv faction in the Greens and FDP that wanted a big increase in weapons supplies.

He has defended his consensual style. “There are some people, they’re amazing, they always say ‘onwards! Let’s man the barricades! Everyone after me!’” Scholz told a business meeting on Thursday morning, hours after sacking Lindner. “But the world isn’t like that, it’s never just one or two people leading. We all have to get along with each other.”

Robert Habeck, the Green economy minister, said on Thursday that anyone who thought the next coalition would be easier to manage was fooling themselves. “It’s not enough to have a parliamentary majority,” he told reporters. “You don’t have to be a clairvoyant to see that in future, even after the next election, it’s not automatically going to be easier.”

However, others think Scholz could have done more to ensure cabinet unity. “He was like a moderator on a panel, not a chancellor, and he just let things slide,” said Schroeder. “He was too reactive, mainly focused on keeping the show on the road.”

After his dismissal, Lindner also criticised Scholz’s leadership style. The chancellor lacked “the strength to enable a fresh start for our country”, he said, and his proposals for economic reform were “dull, unambitious”.

Scholz, who will now go down in the annals as one of the shortest-serving chancellors in Germany’s postwar history, once said that “whoever wants leadership from me will get it”: it was a pledge his critics say he never fulfilled.