Bank of England raises rates to 2.25%, despite likely recession - Reuters

LONDON, Sept 22 (Reuters) - The Bank of England raised its key interest rate to 2.25% from 1.75% on Thursday and said it would continue to "respond forcefully, as necessary" to inflation, despite the economy entering recession.

The BoE estimates Britain's economy will shrink 0.1% in the third quarter - partly due to the extra public holiday for Queen Elizabeth's funeral - which, combined with a fall in output in the second quarter, meets the definition of a technical recession.

Economists polled by Reuters last week had forecast a repeat of August's half-point increase in rates, but financial markets had bet on a three-quarter-point rise, the biggest since 1989, barring a brief, failed attempt in 1992 to support sterling.

The BoE move follows the U.S. Federal Reserve's decision on Wednesday to raise its key rate by three quarters of a percentage point, as central banks worldwide grapple with post-COVID labour shortages and the impact of Russia's invasion of Ukraine on energy prices.

"Should the outlook suggest more persistent inflationary pressures, including from stronger demand, the Committee will respond forcefully, as necessary," the BoE said, using a similar form of words to previous months for its policy intentions.

The BoE's Monetary Policy Committee voted 5-4 to raise rates to 2.25%, with Deputy Governor Dave Ramsden and external MPC members Jonathan Haskel and Catherine Mann voting for an increase to 2.5%, while new MPC member Swati Dhingra wanted a smaller rise to 2%.

The MPC also voted unanimously to reduce the BoE's 838 billion pounds of government bond holdings by 80 billion pounds over the coming year, by allowing bonds to mature and through active sales, which will start next month. This is in line with the goal it stated in August.

The BoE now expects inflation to peak at just under 11% in October, below the 13.3% peak it forecast last month, before Liz Truss won the Conservative Party leadership and became Britain's prime minister with a promise to cap energy tariffs and cut taxes.

Inflation would remain above 10% for a few months after October, before falling, the BoE said.

Consumer price inflation fell to 9.9% in July from a 40-year high of 10.1% in August, its first drop in almost a year.

On Friday, new finance minister Kwasi Kwarteng will give more detail about the government's fiscal plans, which may amount to more than 150 billion pounds of stimulus.

The BoE said it would assess the implications of this for monetary policy at its November meeting.

However, it noted that the energy price cap, while reducing inflation in the short term, would boost pressures further out.

Before the rate decision, financial markets expected the BoE to raise rates to 3.75% by the end of the year, with a peak of 5% reached in mid-2023. Less than a year ago, BoE rates were at a record-low 0.1%.

Sterling fell to its lowest since 1985 against the U.S. dollar after Wednesday's Fed decision, though it has held up better against the euro.

(This story corrects planned gilt reduction in paragraph 7 to 80 billion pounds from 100 billion pounds)

Reporting by David Milliken; editing by Farouq Suleiman

Our Standards: The Thomson Reuters Trust Principles.

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2022-09-22 15:42:00Z
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Huddersfield stabbing: Murder arrest after boy, 15, killed outside school - BBC

A 16-year-old boy has been arrested on suspicion of murder after a 15-year-old boy was stabbed to death outside a Huddersfield school, police have said.

The teenager was attacked on Wednesday afternoon, close to the entrance to North Huddersfield Trust School.

The 16-year-old was arrested at an address in the town shortly before 05:00 BST on Thursday, West Yorkshire Police said.

He remains in custody and inquiries are ongoing.

Officers were called to the scene, on Woodhouse Hill, in the Fartown area, at about 14:55 BST on Wednesday.

The teenager was taken to Leeds General Infirmary where he died a short time later.

Andrew Fell, head teacher at North Huddersfield Trust School, confirmed the 15-year-old was a pupil there.

He said the school would remain closed until 10:30 and then open to offer support to pupils until 14:00.

In a statement to parents, he said: "Our deepest sympathies go out to the pupil's family and friends who must feel, as we do, completely devastated.

"They have lost a loved one and we have lost a wonderful student from our school community."

Afiya Mahmood, who lives nearby, witnessed the aftermath of the stabbing, which she described as "really distressing".

She said: "Everybody's really shocked. He's just a child, isn't he?

"I'm so shocked that the perpetrators did this in daylight at three o'clock with loads of people about. They had no care for people or children around. It's disgusting."

Ms Mahmood said her children, who attend another school, had to walk past the scene.

"They're under eight and we had to actually lie to them and say it was a car accident," she added.

Billy Shankland, who has a child at the school, said: "I can't imagine what the family is going through.

"It's just awful. It's shocking at such a young age."

Kirklees councillor Amanda Pinnock, who represents the Ashbrow ward, was due to meet with representatives from the school, police and council colleagues.

She said: "As a councillor, community member and a mother, I am heartbroken by what has taken place. It is so sad to hear that a schoolboy has lost his life in such tragic circumstances."

Ms Pinnock said the community needed "to put our heads together" to find a solution to knife crime.

She said: "It's time for action. The community is saying more needs to be done. There seems to be a culture of people carrying knives, and it's not just young people."

Speaking on Wednesday night, Det Supt Marc Bowes said: "We will be carrying out extensive enquiries to establish the full circumstances surrounding this incident that has resulted in the absolutely senseless loss of a young life.

"We have already identified a number of witnesses to the incident itself but would still like to hear from anyone who has any information that could assist the investigation."

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2022-09-22 10:40:47Z
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Murder inquiry launched after boy, 15, dies after attack outside school in Huddersfield - Sky News

A 15-year-old boy has died following an attack outside a school in Huddersfield.

Emergency services were called to the scene at Woodhouse Hill in Fartown at 2.54pm on Wednesday, following the attack close to the entrance of North Huddersfield Trust School.

In a statement, West Yorkshire Police confirmed a murder investigation was under way.

Officers said the victim had received treatment at the scene and was taken to Leeds General Infirmary for emergency surgery, but was pronounced dead a short time later.

Detectives from West Yorkshire Police Homicide and Major Enquiry Team are leading the investigation into the boy's murder.

Forensic examination and specialist searches are under way at the school.

Senior investigating officer, detective superintendent Marc Bowes said: "Our investigation is still at a very early stage, and we will be carrying out extensive enquiries to establish the full circumstances surrounding this incident that has resulted in the absolutely senseless loss of a young life.

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'Shock'

"We recognise that an incident of this nature will cause understandable shock and concern in the community, and we are working closely alongside our colleagues at Kirklees District who are increasing their presence in the area to reassure people and keep them updated as our investigation progresses.

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"We have already identified a number of witnesses to the incident itself, but would still like to hear from anyone who has any information that could assist the investigation."

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2022-09-21 21:56:15Z
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Ukraine: More than 1,300 arrested after Putin's mobilisation announcement sparks protests across Russia - Sky News

Protesters have clashed with police in Moscow as anger erupted over Vladimir Putin's declaration of a partial mobilisation in Russia.

Crowds took to the streets of the Russian capital after the Kremlin announced 300,000 reserves would be called up to continue its invasion of Ukraine.

Demonstrators shouted "No to war" in a show of defiance as some were pinned to the ground or dragged away after being detained by armed police.

Ukraine war live: President Biden condemns 'reckless' nuclear war threat

At least 300 people in Moscow were among more than 1,371 detained across 38 cities nationwide on Wednesday night.

Reporting from the capital, Sky News correspondent Diana Magnay said demonstrators were being dealt with "brutally", describing the crowds as "extraordinarily brave" for openly expressing their views in what is a police state.

"We haven't seen protests in cities for the last five or six months, people have been so scared of the fact that they will be detained, and that is clearly what is happening," Magnay said.

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Russians have faced the prospect of being detained for attending an anti-government rally for years - but they have also been silenced by military censorship since the invasion began on 24 February.

Thousands joined ant-war protests at the start of the conflict - in spite of potential consequences, including losing their jobs and even being jailed - but now many are too fearful to speak out.

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"Many are worried about the escalation and don't want to fight", Magnay added.

Footage of the scuffles showed multiple uniformed officers surrounding individual protesters.

One woman was seen being escorted away as she tried to stop police detaining another male demonstrator.

Image: Hundreds of people took to the streets to demonstrate against the partial mobilisation.

Image: A woman flanked by officers in Moscow.

However, some among the older generations have been convinced mobilisation is necessary, Magnay said.

Mr Putin addressed the nation this morning for the first time since sending troops into battle in February, in what Russia has described as a "special military operation".

Read more:

Analysis: Russia makes new stand after rapid Ukrainian offensive
Five British prisoners of war detained by Russian-backed separatists in eastern Ukraine are released

In a pre-recorded clip, he stressed the order was only for a partial mobilisation: "Only those who are in reserve will be conscripted".

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0:24

In an address filled with announcements about the 'special military operation' in Ukraine, Russia's president says he will use 'weapons of destruction' to defend his country.

But he vowed Russia would use every tool in its arsenal to protect its territory as he issued a nuclear threat to Western leaders, warning them: "I am not bluffing".

The Kremlin had earlier said it was not considering a partial or full mobilisation.

This morning's announcement came two weeks after Ukraine's rapid offensive saw it reclaim control of towns in the Kharkiv region - as Moscow was forced to withdraw from two front line positions.

Many scrambled to leave Russia with flights scheduled to depart Moscow sold out, as the price of any remaining soars to thousands of pounds.

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2022-09-21 20:14:50Z
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Business energy prices to be cut by half expected levels - BBC

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Energy bills for UK businesses will be cut by around half their predicted level this winter under a huge government support package.

The scheme will fix gas and electricity prices for companies for six months from 1 October, in a bid to stop firms facing soaring costs from going bust.

Hospitals, schools and charities will also get help, the government said.

It comes after ministers announced a £150bn plan to help households with their soaring bills for two years.

Industry groups welcomed the package but warned further support may be needed after the winter.

It is understood the scheme will be reviewed after three months with an option to extend support for "vulnerable businesses" - but it is not known what sectors come under the category.

Wholesale prices are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas.

Independent analysts Cornwall Insight said this marked a "substantial" 45% discount on wholesale energy prices at the end of last week.

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The government said the scheme would apply to companies which had agreed fixed deals at higher prices on or after 1 April, when energy bills started to surge. Those on variable and flexible tariffs will also be eligible.

Companies do not need to contact suppliers as the discount will automatically be applied to their bills, with savings seen from October but received from November.

Prime Minister Liz Truss said the government understood the "huge pressure businesses, charities and public sector organisations are facing with their energy bills".

"As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind," she said.

"At the same time, we are boosting Britain's homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all."

The support will apply to all non-domestic energy customers in England, Scotland and Wales. A scheme offering comparable support will be established in Northern Ireland.

Monty Rakusen

Officials have not said how much the package will cost the taxpayer, as it will depend on what happens to wholesale market prices between October and April, when the support expires. But Cornwall Insight estimates the cost at around £25bn.

Energy-intensive industries, such as steel manufacturing, have warned that businesses could go bust due to their energy costs, which have surged after Russia's invasion of Ukraine.

Unlike households, businesses are not covered by an energy price cap, which is the maximum amount a supplier can charge per unit of energy. It means non-domestic bills have soared even higher.

The government announced earlier this month that household bills would be limited to £2,500 annually until 2024 under a separate scheme.

On Wednesday, it also said:

• New laws would be introduced to ensure landlords passed the discount on to tenants who pay all-inclusive bills.
• An additional £100 payment will be given to households not able to receive support for their heating costs, such as those not served by the gas grid.

The big problem with this support for business is its shelf life. Few businesses plan with only a six-month time horizon and there will be some whose plans to cut production, close premises and let staff go will not change as a result of this intervention.

But many others - particularly those in retail and hospitality - may see this giving them a fighting chance over the commercially crucial Christmas trading period.

The government has thrown an emergency blanket over the economy this winter, but longer term, more fundamental reform to the energy supply market, its pricing and mechanics will be needed.

Developing more cheap renewables, securing foreign supplies of liquid gas, drilling for more domestic fossil fuels, breaking the link between gas prices and electricity and pushing ahead with hydrogen, carbon capture and storage, and small and large scale nuclear have been part of the government's plan for nearly two years.

What's new is the pressure applied by Vladimir Putin to do it as fast as possible.

'Welcome but more to be done'

Stephen Phipson of Make UK, which represents manufacturers, said businesses would "warmly welcome" the government's latest support package.

"Government has delivered a scheme which is simple to understand, giving reassurance to the business sector and making immediately available the much-needed help companies have been calling for across the board."

However, Mr Phipson warned that energy prices were likely to remain high for more than the duration of the scheme and firms may need "support for a longer period if we are to protect jobs and remain competitive".

Director general of UK Steel, Gareth Stace, said the price cap would give steelmakers "the chance to get through the winter". But he called on the government to "rapidly reform the energy market to ensure longer-term competitive prices beyond the current price".

Smaller businesses have also been struggling with rising bills, with brewery bosses warning that pubs and restaurants across the UK could be forced to close due to energy costs that have soared by as much as 300%.

A landlord of one pub in Essex told the BBC his energy bill had risen from about £13,000 a year to £35,000.

Kate Nicholls, chief executive of UKHospitality, said the industry was "relieved" by the support ahead of the busy Christmas trading period.

"The inclusiveness of the support announced today - covering businesses small and large - will be extremely beneficial to the sector... A sector that provides a huge number of jobs, many of which are now more secure."

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2022-09-21 08:55:03Z
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Joe Biden to warn Liz Truss over Northern Ireland protocol — follow latest - The Times

Key moments

Truss to meet Biden

Biden to address UN General Assembly

PM says trade talks with US would not even start in the ‘medium term’

Biden to warn Truss not to risk peace in Ireland

Joe Biden will urge Liz Truss to work with the EU to find a negotiated outcome to solve post-Brexit tensions over the Northern Ireland protocol, the White House has said.

The US president and the prime minister will hold a delayed meeting in New York today as the Truss attends the UN summit. She declined to discuss the protocol with President Macron of France during a meeting yesterday and No 10 did not say if she will bring it up with Ursula von der Leyen, European Commission president.

Jake Sullivan, the US national security adviser, made it clear that Biden will discuss it “in some detail” with Truss.

Sullivan told reporters that the president “will encourage the UK and the European Union to work out an effective outcome that ensures there is no threat to the fundamental principles of the Good Friday Agreement”.

The prime minister is pressing ahead with her controversial Northern Ireland Protocol Bill, which the EU and other critics say will breach international law. Some are predicting that she could unilaterally trigger Article 16 of the protocol, to override parts of the agreement brokered as part of the Brexit divorce deal

2 hours ago

7.00am

Truss meets Ukraine’s first lady

Liz Truss met Olena Zelenska in New York

STEFAN ROUSSEAU/PA

Liz Truss met Olena Zelenska, the wife of the Ukrainian president, and Denys Shmyhal, the prime minister, as they toured an exhibition entitled “Russian Warcrimes” at the Ukrainian Institute of America on Tuesday evening. They briefly crossed paths with Brigitte Macron, the French first lady, as she arrived for her own tour.

The exhibition includes more than 20 large format photographs showing civilians killed or injured. “These are the type of crimes we thought had been consigned to history,” Truss said.

The two met as Russia signalled that it would annex swathes of Ukraine by holding referendums in the Donetsk, Kherson, Luhansk and Zaporizhzhya regions.

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2022-09-21 06:45:00Z
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King Charles returns to Scotland as Royal Family grieve Queen in private - STV News

The new King has returned to Scotland as the Royal Family begins a period of private mourning following the funeral of Queen Elizabeth II.

Charles travelled by plane from RAF Northolt on Tuesday morning and arrived at Aberdeen Airport in the early afternoon.

He is understood to be accompanied by the Queen Consort, Camilla.

On Monday night, Queen Elizabeth was buried alongside her late husband, the Duke of Edinburgh, at the King George VI Memorial Chapel at Windsor Castle.

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The coffin of Queen Elizabeth II arrives outside of St George’s chapel inside Windsor castle on September 19, 2022. Getty Images

It followed a day of ceremonies and processions marking the funeral of the late monarch watched by millions around the world and attended by thousands of dignitaries, world leaders, public representatives, friends and family.

It is the first time the King has returned to Scotland following a procession in which the Queen’s coffin was taken from the Palace of Holyroodhouse to St Giles’ Cathedral in Edinburgh during Operation Unicorn last week.

On the evening of Monday, September 12, King Charles III, the Princess Royal, the Duke of York and Earl of Wessex took their places at the four sides of the oak coffin for a silent vigil.

STV News

King Charles III and his siblings returned to St Giles’ Cathedral on Monday, September 12, for a vigil held beside the Queen’s Coffin. STV News

Charles then travelled to London before visiting Northern Ireland and Wales.

The Queen’s committal service at St George’s Chapel in Windsor on Monday afternoon marked the end of the ten days of public mourning for the late monarch.

The Queen’s coffin was interred with the Grenadier Guards’ Queen’s Company Camp Colour, a smaller version of the Royal Standard of the Regiment, which the King placed on her coffin at the end of the committal service.

IN PICTURES: State funeral held for Queen Elizabeth II

At 9pm on Monday, the official website of the Royal Family confirmed that a private burial took place in The King George VI Memorial Chapel this evening, conducted by the Dean of Windsor.

“The Queen was buried together with the Duke of Edinburgh, at The King George VI Memorial Chapel,” the statement said.

The Royal Family has announced that members will observe a further seven days of private mourning and will not undertake any duties during this time.

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2022-09-20 15:06:53Z
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