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A band of rain across western Scotland will clear into northern England and northwest Wales throughout today. Rather cloudy to the south of this, although perhaps a few breaks developing. To the north a mix of bright spells and showers. Tonight: The band of patchy rain will stall across the central swathe of the UK overnight. Otherwise a mix of cloud and clear spells, with some fog patches developing.

Sunday’s news briefing 

The long-awaited ceasefire in Gaza has come into force after a delay of nearly three hours, and thousands of Gazans are beginning to return home. The first three Israeli female hostages are expected to be freed later – Hamas has named them as 31-year-old Doron Steinbrecher, dual British-Israeli Emily Damari, 28, and 24-year-old Romi Gonen.

Several thousand Pro-Palestinian supporters have taken part in a demonstration in central London. The rally – the latest UK protest organised by the Palestine Solidarity Campaign (PSC) since the war in Gaza began in 2023 – comes as Israel and Hamas agreed to a ceasefire and hostage release deal.

TikTok has gone offline in the US, hours before a new law banning the platform was due to come into effect. A message appearing on the app for US users said a law banning TikTok had been enacted, meaning “you can’t use TikTok for now”.

Bank of England: Goldman Sachs expects deep interest rate cuts

Markets are significantly underestimating the chance that the Bank of England will have to step up the pace of cutting interest rates, Goldman Sachs has argued.

Traders anticipate just two interest rate cuts this year with one more cut priced in for 2026, which would leave the benchmark Bank Rate at 4.0 per cent. It currently stands at 4.75 per cent.

Investors are concerned by signs of stubborn inflationary pressures in the UK economy, with many economists predicting that the headline rate will increase to over three per cent in the spring.

Figures out yesterday also showed that private sector pay growth hit 6.0 per cent in the three months to November, well ahead of expectations.

Bank of England: Goldman Sachs expects deep interest rate cuts

UK economy: Consumers catch ‘January blues’ as confidence slumps

Consumer confidence in the health of the UK economy slumped in January, pointing to further headwinds in the coming months.

A net -34 of respondents to the British Retail Consortium’s (BRC) latest sentiment monitor said that the economy would get worse over the next three months, down from -27 in December.

This put confidence in the health of the economy at its lowest level since the BRC started collecting data on the topic in March 2024.

The survey comes after a succession of disappointing data releases, which indicate that the economy slowed significantly in the second half of last year.

https://www.cityam.com/uk-economy-consumers-catch-january-blues-as-confidence-slumps/

Rachel Reeves’ tax hikes pose ‘major threat’ to UK labour market resilience

The government’s tax hikes pose a “major threat” to the health of the labour market, a leading economist has warned, as markets prepare for the latest jobs market figures.

The labour market has been a key source of strength for the UK economy, with continued high employment helping to sustain strong levels of wage growth over the past couple of years.

Many forecasts for 2025 assume that the continued resilience of the labour market will ensure that economic growth accelerates compared to last year.

But economists are worried that measures announced in the government’s maiden Budget will threaten the health of the labour market.

https://www.cityam.com/rachel-reeves-tax-hikes-pose-major-threat-to-uk-labour-market-resilience/

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