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Starmer vows to work with Musk on AI growth after billionaire’s criticism of government

Inflation has fallen to 2.5 per cent in a boost for Chancellor Rachel Reeves as she refused to rule out the possibility of an emergency budget.

The Consumer Prices Index (CPI) figure is still above the Bank of England’s 2 per cent target, but is lower than November’s 2.6 per cent.

It means means that the central bank is less likely to want to rapidly bring down interest rates, meaning higher costs for borrowers but better rates for savers.

Asked in Parliament if she could rule out tax rises and spending cuts in an emergency Budget, Reeves instead recommitted to the borrowing rules announced in October.

“We have committed to have just one budget per year to provide businesses with the certainty that they need to invest, so we will have an update from the OBR in March,” she said.

“We have set out the fiscal rules that we will balance day to day spending with tax receipts and we will get debt down as a share of GDP within the forecast period, and we will continue at all times to meet those fiscal rules.”

PM’s ‘plan is working’, Treasury minister insists

Chief secretary to the Treasury Darren Jones has insisted the prime minister’s plan for the economy is working as inflation fell to 2.5 per cent.

“Inflation coming down is good news for families across the country, we know the cost of living is still a problem for lots of people,” he told Sky News.

Alexander Butler15 January 2025 07:40

Stagflation a ‘real threat’, Lib Dems warn

Stagflation remains a real threat without economic growth, Liberal Democrat Treasury spokesperson Daisy Cooper warned.

She said the “unexpected fall” in the Consumer Prices Index rate of inflation “offers a glimmer of hope but the reality is the UK economy remains stuck in the mud”.

“The Chancellor’s budget has failed. Growth is nowhere to be found after the damaging national insurance hike and stagflation remains a real threat,” she said.

Alexander Butler15 January 2025 07:36

Rachel Reeves refuses to rule out emergency spending cuts

Alexander Butler15 January 2025 07:34

No 10 will be breathing a ‘sigh of relief’

Downing Street will be breathing a “sigh of relief” after UK inflation unexpectedly fell last month, a former Bank of England policymaker said.

Speaking to BBC Radio 4’s Today programme, economist Michael Saunders said of the new figures: “I think you can hear a sigh of relief coming out from Downing Street, the Bank of England and across financial markets as a whole.

“To be sure, inflation is a little bit above the 2% target, but markets have been expecting today’s figure to be stable or higher and it came in a little lower than expected with services inflation, which the Bank of England is closely focused on, sharply lower than the previous month.”

Alexander Butler15 January 2025 07:31

Breaking: Inflation fell to 2.5 per cent in December

Inflation fell to 2.5 per cent in December, in a boost for chancellor Rachel Reeves.

In November, the Consumer Prices Index (CPI) came in at 2.6 per cent, where petrol, train travel, and live entertainment pushed up prices.

The figure is still above the Bank of England’s 2 per cent target, which means that the central bank is less likely to want to rapidly bring down interest rates, meaning higher costs for borrowers but better rates for savers.

Read the full story here:

Alexander Butler15 January 2025 07:05