Breaking News | Bank of England raises UK interest rates by 0.25%

The Bank of England has raised the UK interest rate by a quarter of one percent, from 0.5% to 0.75%.

Expectations of a strengthening economy, growing employment levels and increased consumer spending have all contributed to the decision.

The move comes after the Bank’s Monetary Policy Committee announced that economic growth will recover from the 0.2% rate seen in the first quarter, to 0.4% in the second quarter. The financial markets have taken this on board and are forecasting one, and perhaps two rises of 0.25% before 2020

The rate rise is at its highest level since March 2009, and only the second increase in a decade.

As is the case, the move will raise the interest costs of more than 3.5 million half million residential mortgages with variable or tracker rates. However, today’s announcement will encourage savers, who could see a rise in their personal interest rates in the coming months.

The Bank of England was expected to raise interest rates in the middle of May but resisted because of weak growth- partly caused by harsh weather conditions during the ‘Beast from the East’ phenomenon.

The Bank is sticking to its guidance that interest rates will continue to only head higher, but at a gradual pace and to a limited extent.

Analysis from Oliver Murphy- Editor

As is the case with interest rates, there will be those who benefit and those who do not.

The rate rise will certainly come as a shock to the 3.5 million people with variable or tracker rate mortgages. Indeed, on a £150,000 variable mortgage, for example, a rise to 0.75% is likely to increase the annual cost by £224.

Of course, in terms of monetary policy, the Bank’s move is in accordance with its main priority- to reduce the cost of living (inflation). Generally, a rise in the Bank rate is good for savers and negative for borrowers – but the reality is a bit more complex.

Indeed, the Bank may well have jumped the gun by raising the interest rate now. The rise will undoubtedly threaten lowering consumer and business confidence at an already fragile time. According to the Institute of Directors:  “Growth has remained subdued, and the recent partial rebound is the least that could be expected after the lack of progress in the year’s first quarter.”

With the outlook for the global economy uncertain, only time will tell us of the impacts of this rise.

 

 

 

 

 

Controversial South London redevelopment set for early 2019

Elephant and Castle shopping centre is set to be demolished in March despite fierce local opposition.

979 homes will be built as well as a new campus for London’s College of Communication (LCC). However, local concern emerges as developers Delancey fail to include adequate affordable housing in their plans. Indeed, of the 979 luxury new homes to be built, only 116 will now be socially rented properties.

There is also concern over protection for existing traders. Under the plans, up to 100 local traders will lose their plots.

Elephant and Castle shopping centre was one of the first all-inclusive precincts built in post-war Britain and has retained a strong local community with deep-rooted links to London’s Latin and Black communities.

In a statement, the campaign group, Latin Elephant, have said: “It is utterly frustrating to think of subsequent displacement and loss of a valued place for many Latin Americans and BAME groups in London.

They added: “We will continue to fight for a fair and inclusive deal for all BAME and Latin American traders who make Elephant and Castle our home.”

Southwark Council’s planning committee narrowly approved the plans in a 4-to-3 vote after four hours of debate with one abstention. Students from LCC have joined local traders in protest of the redevelopment and their university’s complicity.

The plans will go before the Greater London Authority (GLA) for final approval.

Campaign group 35%, have urged Sadiq Khan to rethink the decision, saying:

Mr Flynn said: “The proposed scheme will change the face of the Elephant and Castle. If it goes ahead it will uproot an entire community who have built their lives around the shopping centre over decades.

“The scheme promises to build a new campus for the London College of Communication and a new Northern line Tube entrance. These would be very welcome benefits, but they should not come at the cost of uprooting an entire community and by sacrificing desperately needed affordable housing.”

Proposed boundary changes would give Tories 40 seat advantage for same vote share

Recent Projections have revealed that the boundary changes, soon to be proposed by the Boundaries Commission, would give the Conservatives a 40 seat advantage.

The analysis, conducted by Electoral Calculus, has revealed that if both major parties were to receive 38% of the vote the Conservatives would be the largest party by 40 seats.

The Boundary Commission has yet to release the full report but this initial data shows that they would need to seriously reconsider as the changes are clearly tantamount to gerrymandering on behalf of the government.

It is worth noting the current boundaries already favour the Conservatives- with the party being overrepresented by 6.4% in the Commons. Labour are overrepresented by only 0.3%. Such a distortion arises from the system of First Past the Post favouring the larger parties.

These new changes stem from the Conservatives’ wish to reduce the size of the Commons to 6oo seats. This means the 40 seat advantage in a 600 seat assembly would be more significant than the current Tory advantage, which is estimated to be around 21 seats in a currently 650 seat assembly.

These changes risk locking Labour out of government.

However, these proposals are different from the last which saw the DUP potentially lose out. But, with the DUP now placated, the boundary changes may pass through the House, although, some Tories may be uncomfortable voting to abolish their constituencies. The SNP are not affected either, and they may vote for these proposals based on their apathy to constituencies situated outside Scotland.

The changes outlined in today’s report may well give new strength to those hoping to change the UK’s voting system to a more proportional system.

Analysis from Iwan Doherty- Editor in Chief

It’s gerrymandering, pure and simple. These changes should not be proposed. The Boundaries Commission is supposed to be an independent organisation but if these proposals made it to the Commons would be a clear sign that the commision had been compromised by political agendas. Indeed, the sudden way in which the DUP have been excluded from changes since the Tories formed a tawdry coalition symbolises the blatant corruption.

They need to go back to the drawing board and draft proposals that ensure seat totals are representative of the vote share. If these changes were ever enforced, the calls to move away from FPTP would get much louder.

I expected Theresa May to pass boundary changes before calling any election, just as Labour would be wise to pass their ‘Votes for 16s’ bill before the next GE, but that was not the case. She may now face a tricky battle to finalise her gerrymandering. But if these boundary changes resemble a final proposal, it would be an open perversion of our democracy.

Tory Cheshire East Council’s ‘Rotten Borough’ status shows no sign of going away

Another month, another Cheshire East Council controversy. In an earlier article, I informed you of the suspension of the councils Chief Executive Mike Suarez on his full pay and pension of £200,000 plus. Since then, he has caused yet more controversy, with his resignation being announced just days before his disciplinary hearing. I attended the Council Cabinet meeting on the day his resignation was announced, and Cllr Rachel Bailey, Leader of the Council, angrily attacked Leader of the Labour group Sam Corcoran when he made a plea for transparency.

What soon followed this caused further anger among Cheshire East residents, as it was announced that following Suarez’ resignation, the investigation into him had been conveniently terminated. The Council claimed that they could only investigate ‘officers on the payroll’ and as Suarez no longer was, they saw no need to continue the investigation. A coincidence? I don’t think so.

Council tax will have increased by 5.99 % over the period of 2018-19, and interestingly, the investigation into Suarez and two other senior officers cost over £1 million. Taxpayers money has been thrown down the drain as this Conservative Administration ‘lurches from scandal to scandal’.

Having already won the Private Eye magazine’s ‘Filthy Liars of the Year’ award, it looks like CEC want even more. They’ve just this week been the subject of a new article in the infamous satire magazine, this time entitled ‘Rotten Boroughs’. With former Leader Michael Jones awarding council contracts to his close friend and personal physiotherapist Amanda Morris, a bullying scandal running rife within the council and a number of ongoing police investigations, the ongoing refusal of the executive to actually deal with the issues shows a complete lack of competence.

The Labour Party see the current council controversies as the perfect opportunity to win Cheshire East. The clear message within the party is “If not now, then when?” For the first time in recent memory, Labour have nearly a full slate of candidates, and confidence is high amongst the local parties.

On the doorstep, residents are telling us that they’re ‘fed up’ with the council not fixing their problems. Road maintenance is crumbling, graveyards not having enough spaces, a controversial greenbelt development off Chelford Road that would eventually cost millions of pounds, and the recent scrapping of the Macclesfield Town Centre Development have left residents across the county reeling. People aren’t seeing a return for their hard earned money that goes towards council tax. Labour are the only viable option to restore order.

Birkenhead CLP’s pass motion to suspend whip and deselect rebel Frank Field

Birkenhead CLP’s have passed a motion that moves to withdraw the Labour whip from Frank Field and bar him from all future selections. This is similar to the motion passed against Kate Hoey.

The vote passed 59-13 (2 abstentions).

Both Brexiteer MPs infuriated the majority of Labour supporters by voting with the government on an amendment to the Brexit trade bill.

The amendment would see the UK stay in a customs union with the EU after Brexit if no deal with the EU was reached. Tory whips stated that if the government lost the vote senior Brexiteers would trigger a vote of no confidence in the government which may have resulted in a general election. With Labour 5 points clear in the polls this has been seen as a betrayal. It is also worth noting staying in a negotiated customs union with the EU is part of Labour’s policy on Brexit.

The national party will need to make a decision on both Field and Hoey’s fate but these events could turn into a quick deselection of MPs who no longer represents anyone but themselves.

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Government approves Fracking despite local disapproval

The government has permitted Cuadrilla to begin fracking at a well in Lancashire. The energy minister has issued the first permit for fracking since new regulations were introduced.

Yet, the site where fracking will begin has been the centre of 18 months of protest. Claire Perry, the energy minister, said shale gas was an important potential energy source. In a statement, she added: “Our world-class regulations will ensure that shale exploration will maintain robust environmental standards and meet the expectations of local communities.”

Campaigners have promised to continue fighting fracking citing the dangerous levels of air and water pollution, as well as its role in exacerbating climate change. Only 16% of the public support fracking mainly due to risks to water safety but the method also can cause earthquakes, like the ones seen in Blackpool in 2011.

Fracking has also been linked to increasing the risk of cancer and studies found babies are 40% more likely to be born prematurely if their mother lives near a fracking site.

Many environmentalists believe the government should be investing in renewable carbon-neutral energy sources to help combat climate change. Indeed, in an article from the Huffington Post, The Green Party co-leader, Jonathan Bartley, stated: “This week, they (the government) have firmly taken the side of the fossil fuel industries in the face of overwhelming public opposition and clear climate science.”

An application to frack a second well at Preston New Road is expected to be submitted shortly, and fracking both wells is expected to take three to four months.

Analysis from Iwan Doherty- Editor in Chief

governmental approval of fracking despite widespread popular disapproval for the energy source is an indication of who this government really serves. It’s a terrible and pollutive energy source which is finite and poses substantial health risks to the public. The government needs to realise that we require a long-term solution to both climate change and our energy demand. Fracking isn’t that solution. In a month when the Conservatives rejected tidal power, this is a shocking announcement. From this evidence alone, it is clear that fracking should not be allowed in the UK.

Breaking | Home Secretary announces legalisation of medicinal cannabis products

The Home Secretary, Sajid Javid, has announced that specialist doctors will be legally entitled to prescribe medicinal products containing cannabis by autumn.

The announcement comes after two high-profile cases involving young children suffering from severe epilepsy who were denied treatment by cannabis oil.

Previously, in the House of Commons, the Home Secretary had declared that the government’s current position on medicinal cannabis was “unsatisfactory” and promised a change in the law if a review found “significant medical benefits”. Other forms of cannabis will remain illegal.

Today’s statement from Mr Javid comes after experts, including the chief medical officer for England, Prof Dame Sally Davies, said patients with certain medical conditions should be given access to the treatments.

The Home Office, in conjunction with the Department for Health and Social Care and the Medicines and Health products Regulatory Agency (MHRA) will develop a definition of what constitutes cannabis-derived products so that they can be prescribed.

Until this time, clinicians will still have to apply to an independent panel on behalf of patients who wish to be treated with these products.

 

Trade war defused as US and EU agree to work towards zero tariffs

According to President Trump, the United States and European Union have agreed to launch a “new phase” in diplomatic relations and work towards a policy of “zero tariffs“.

It has been agreed that an increase in trade in services and agriculture will soon follow, including a higher level of soy bean exports to the EU.

The announced agreement has undoubtedly defused what was reported to be a fully-fledged trade war between the two powers, sparked by Trump’s imposition of tariffs on European steel and aluminium exports.

The Agreements

In what was described as a “good, constructive meeting” by Mr Junker, the two have agreed to temporarily postpone any further tariffs while negotiations are underway- and to work on reforming the World Trade Organisation.

According to President Trump, today’s agreements mark a “very big day for free and fair trade”.

The EU has announced plans to increase its purchases of liquefied natural gas (LNG) from the United States whilst also increasing trades in services and agriculture. However, Mr Junker remarked that striking a deal on zero tariffs on industrial goods was his “main intention”.

As of yet no announcement has been made on vehicle tariffs, and it has not yet been declared whether any progress has been made on seeking a resolution to the issue of a 25% import tariffs imposed by President Trump.

Analysis from Oliver Murphy- Editor

Today’s agreement signals a promising return to rational discussion and a move away from tit-for-tat tariffs.

It would be unjust to suggest that the President is wrong to challenge the current trading system. According to the WTO, US average tariffs (trade weighted) are at 2.4%- lower than those of the EU (3%).

However, whilst Trump’s originally aggressive approach will have played well to his supporters in the “rust belt”, in the complex world of diplomacy he would have stood little chance of compromise.

Perhaps we shouldn’t get ahead of ourselves. Whilst the two leaders have certainly turned a page on trade, today’s announcement merely resembles a resumption of a dialogue. There has yet been a reassessment of national securities barriers or the current state of automobile tariffs.

Clearly, the avoidance of a cataclysmic trade war does not in any way resemble success. Indeed, there is still much work to be completed if full confidence is to be restored not only in the markets but the Office of the President.

 

A look at the polls: What will happen next?

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After what had been a fairly inactive 6 months of polling, the fallout from Chequers and the publication of the government’s Brexit white paper have sparked a significant change in the Westminster voting intention.

Between January and July, the polls had been shifting at a gingerly pace. Whilst support for Labour dropped a couple of percentage points, the Conservatives and Liberal Democrats witnessed a narrow increase by about one per cent each, placing the Conservatives narrowly in the lead.

However, with the emergence of Chequers- the landscape shifted seismically. A once reliable lead turned into a fall as the Conservatives retreated to 36% in a few polls, one of the lowest levels since the 2017 general election. Unsurprisingly, Labour has picked up the pace, leading the way in a sequence of polls for the first time since February. Yet, it is not just the Labour Party who have reaped the benefits of a Conservative slump. After six months, UKIP finally topped 5% in each of the last five published polls.

After months of dreary shifts, the current data certainly resembles a striking change, although, its nothing to write home about. Indeed, the current state of affairs may just resemble a temporary ‘blip’. After all, with an absence of factional conflict during the summer, the Conservative’s could well witness an improvement in public perception.

Of course, this marked change could well foreshadow an autumnal spate of political turbulence as Theresa May and the EU seek to broker a Brexit deal. Voters, even today, remain equally split over the decision to leave.

Since 2017, the amount of people who believe that Brexit was a wrong decision has gradually increased, but with no sign of an overall consensus. Even worse for the prime minister, polls which aim to chart opinions on what should happen next paints even more division.

Indeed, a recent poll by Deltapoll found that when asking the public: ‘What do you think should happen next?’

  • 27% responded: ‘Brexit should be abandoned altogether’
  • 9% responded: ‘Negotiators should try to get the Prime Minister’s deal agreed because it is the only remaining chance of fetting Brexit through’
  • 20% responded: ‘Delay Article 50 to postpone Brexit and give the Prime Minister as much time as needed to come up with a more acceptable plan.’
  • 24%: ‘Refuse to make any more concessions with the EU and leave without a Brexit deal if necessary’
  • 15%: ‘Don’t know’

Analysis of the responses suggests that no course of action has the support of even a third of voters. This will undoubtedly cause further issues for Theresa May who already struggles to quell the fierce infighting within her own party. It seems that whatever her move, it will not be enough to please a majority of public opinion.

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No new money for lifting public wage cap

Theresa May has announced that the public sector pay cap will be lifted but the Treasury will release no new funds to finance the pay increases. This may cause further cuts in other spending priorities.

Public sector workers could face rises of 3.5% but most will qualify for only 2%, a real terms pay cut due to inflation.

Anti-Union legislation has prevented the Union PCS from striking over pay despite 85% of workers voting to do so the Union and others want an increase of 5% to counter the huge drop in real term public sector pay over the last 8 years.

David Cameron introduced the pay freeze in 2010, followed by a 1% rise two years later. Wages in the public sector have severely lagged behind inflation but it is the same story in the private sector since the beginning of austerity.

A Labour party spokesperson called the latest offer:

“a slap in the face to public sector workers who have seen their wages cut for years by the Tories’ cruel pay cap to pay for huge tax cuts to the super-rich”

“An average offer of just 2% per year and, according to reports, only for some public sector workers, will still be a further real-terms pay cut.

“Even worse, there doesn’t seem to be any new funding for departments for this, meaning pay rises will have to come at the cost of other services, pitting hard-working public servants against those they are working with.”

Analysis from Iwan Doherty- Editor in Chief

The headlines should no new money for public sector. This means any wage rises will just cause cuts elsewhere.

it’s an example of how disconnected the Conservative Party are with the average worker and why so-called ‘centrist’ solutions don’t work.

Selling a pay cut as a pay rise doesn’t make it one, public sector workers should not be seeing their hard work be worth less and less each year, 2% which most workers will get is a pay cut. The government banning strike action over the issue shows how desperate it has become. Austerity on the public sector must end, if pensions rise with inflation why don’t public sector paychecks?

Releasing no new funds is not only cruel but stupid, it means that other spending must be cut. That’s both spending that provides vital services to citizens and spending in our economy. We need to be putting more money in the hands of people who spend it but the government’s obsession with deficit reduction has meant its closed its eyes to economic growth and the needs of its citizens. The move may mean some workers aren’t so bad off but may cause jobs losses and cuts to spending on resources. You can’t pay people more and want nominal spending lower, they need to pick a side.

The government must commit to spending more money, that is the start of creating economic justice after too long in austerity mode. Patch work solutions and trying to appease voters will not help, if anything this policy will only make the life of our public sector harder.