14 November 2025: Andrew Bailey sounds alarm over jobs ahead of the Budget

Independent Monetary Policy Committee Member, Megan Greene, was confirmed for a second term as one of the nine members of the Rate-setting committee.

At her confirmation press conference, she told reporters that she has concerns that the current monetary policy may not be restrictive enough. She noted risk management around inflation should shape BoE policy, with household expectations at their upper limits.

She went on to tell reporters that, in her view, the Bank of England cannot consider itself immune from political interference in shaping its policies, as seen with the Federal Reserve in the United States.

Greene said yesterday that the question of Central Bank independence is “certainly something that comes up” in the UK. She added that the UK shouldn’t “ignore” US President Donald Trump’s repeated attempts to apply pressure on Federal Reserve Governor Jerome Powell.

“UK politicians have recently been on media waves, asking why the Bank of England is independent,” Greene said at a Chatham House event in London. “There’s legal independence, and that’s one thing, certainly, but there’s also the culture, and the culture can shift even if the legal independence doesn’t.”

Greene didn’t name any politicians, but Reform UK leader Nigel Farage, whose party has topped opinion polls for months, has made little secret of his desire for politicians to have greater influence on the central bank. In an interview with Bloomberg, Farage said Governor Andrew Bailey had “a good run” and hinted he’d replace him if he became prime minister.

While Bailey’s single eight-year term only expires in 2028 and Prime Minister Keir Starmer doesn’t have to hold a general election until 2029, Farage has predicted a vote could come as soon as 2027 because the Labour government is in “crisis.”

Bailey responded to Farage’s remarks in a separate interview with Bloomberg, saying he intends to remain in post until his term expires. He spoke hours after the central bank voted to hold interest rates at 4%

The economy saw slower-than-expected growth of 0.1% in the three months to September, according to the Office for National Statistics. Polls show that blaming the last Conservative government won't wash with voters any longer.

The UK economy was just 1.3% larger in September than a year earlier. That’s well short of the 1.8% “potential” growth rate the Office for Budget Responsibility has pencilled in, and, after years of underachievement, it’s little wonder a downgrade is coming.

GDP per capita — the measure that really matters for living standards and the lived experience of households in the UK — grew by just 0.8%.

As the Resolution Foundation also points out, that’s slightly stronger than the run rate since 2008 of 0.6%, but weaker than the average in the 2010s and “a far cry” from the 2.5% growth rate between 1993 and 2008.

Rumours are currently flooding Westminster that the Chancellor, in talks with the Prime Minister, has shelved plans to raise the basic rate of income tax.

She is now exploring alternative ways to raise revenue to fill a fiscal hole estimated at up to 30 billion pounds, the FT reported. The FT said the decision to change plans, taken this week, was communicated to the Office for Budget Responsibility on Wednesday.

The National Institute of Economic and Social Research, a think tank, has urged Reeves to come up with 50 billion pounds' worth of revenue-raising measures.

Sterling dipped to 1.3101 early in yesterday's session, before rallying to a high of 1.3215 on the back of Megan Greene’s comments. It eventually closed at 1.3185.

Despite the end of the Federal shutdown, the decision-making process at the Federal Reserve is still shrouded in fog. It may be some time before the mist clears sufficiently for FOMC members to have confidence in the data to make salient decisions on monetary policy.

For example, there have been no comments from the office of Labour Statistics so far on whether they will produce one “jumbo” report on employment on December 5th or individual reports of the September, October, and November numbers. While nothing has been officially released, there are rumours that the September NFP will be published in the coming days, since the data has already been collected.

Either way, the next employment report will go a long way to influence Fed thinking until the end of the first quarter of 2026, a year that Treasury Secretary Scott Bessent believes will be a “bumper year” for the economy.

Meanwhile, Cleveland Federal Reserve President Beth Hammack said monetary policy needs to remain in a position to help lower inflation pressures, suggesting she leans against the U.S. central bank cutting interest rates again in the near future.

"This is a difficult time for monetary policy," given challenges to the Fed's inflation and job mandates, Hammack said in an appearance before the Pittsburgh Economic Club. "But when I look at both of those things, on balance, I think we need to remain somewhat restrictive to continue putting pressure to bring inflation down towards our target."

"It seems to me likely that to maintain a restrictive stance of policy, we need to keep rates around these levels," Hammack said, adding, "When I look at the overall performance of the economy, it's not obvious that monetary policy should be doing more right now."

Hammack and other Fed officials are weighing whether to cut rates at the central bank's December 9-10 meeting. The Fed trimmed its benchmark overnight interest rate by a quarter of a percentage point to the 3.75%-4.00% range at the end of October as officials sought to buoy a softening job market while still keeping rates in a place where they can lower still-high inflation.

Neel Kashkari, the President of the Minneapolis Fed, does not have a vote on the FOMC until next year, but his comments are always well-received by policymakers and the market alike.

He told Bloomberg News that he did not support the Fed's October interest-rate cut, given the economy's resilience, and said he was undecided on what to do at the Fed's meeting next month.

"I can make a case depending on how the data goes to cut, I can make a case to hold, and we’ll have to see".

The dollar index has finished lower on six of the last seven sessions. Yesterday, it fell to 98.99 and closed at 99.18.

When change comes at the ECB, it may see another surge in Germany's influence, despite its current economic weakness.

The last time the ECB’s Presidency was “up for grabs”, then-Chancellor Angela Merkel surprised markets by promoting Ursula von der Leyen’s candidacy for the EU Presidency, meaning that Bundesbank President Jens Weidmann could not, in good faith, become the ECB's President.

Weidmann promptly retired in an apparent fit of pique.

Now that the region is beginning the process of replacing its top officials again, a German is promoting himself for the ECB presidency.

The European Central Bank's Joachim Nagel said sitting on the Governing Council gives him and others the credentials required to succeed ECB President Christine Lagarde, in comments published by Germany's Spiegel news magazine.

"In principle, any Central Banker on the ECB Governing Council should be eligible to succeed to the top position in the euro system. External candidates with different profiles also have a chance," Nagel, president of Germany's Bundesbank, told the magazine.

The elevation of another technocrat to the job is a near certainty, as a diplomat such as Lagarde is not seen as having the skill set to drive the market as her predecessor, Mario Draghi, did.

Germany's ruling parties have agreed to introduce a subsidised power price for energy-intensive industries until 2028 to reduce costs and boost Europe's largest economy, Chancellor Friedrich Merz has said.

German companies, including carmakers and steelmakers, have long complained that high energy prices put them at a competitive disadvantage.

Merz said the subsidised electricity price for industry will be set at 5 euro cents per kilowatt-hour until 2028, following coalition talks with his Social Democrat coalition partners.

"The aim is to significantly relieve the burden on our economy and reduce production costs," Merz said.

The EU must agree to the scheme under rules regulating state aid.

"Discussions with the EU Commission are largely complete, and we expect to receive approval for this," Merz said.

The VCI association representing the chemicals industry welcomed the measure, but said the government needed to do more to make Germany more competitive for industry.

"We now need relief across the board - in energy, taxes and bureaucracy," VCI head Wolfgang Große Entrup said in a statement, warning that the situation for companies was "becoming more acute every day".

The Chancellor and his coalition partners also agreed to tender 8 gigawatts of gas power plant capacity for construction and to reduce air traffic control fees, saving the aviation sector 350 million Euros.

The Euro rallied to its highest level since mid-October yesterday, though it is doubtful it has the momentum to break its medium-term resistance.

The common currency reached a high of 1.1655 and closed at 1.1633.

Have a great day!