Bank of England could cut base rate if jobs market continues to slow
Companies are 'also having pay rises that are possibly less than they would have been if the NICs change hadn't happened', Mr Bailey said.
In an interview with the newspaper, the governor said the British economy was growing behind its potential.
This could open up 'slack' to bring down inflation, he said, meaning prices on goods would rise less swiftly compared with earnings in future.
Mr Bailey said he believes the base rate set by the Bank of England would be lowered in future, after it was held in June.
The current Bank rate of 4.25%, which has a bearing on all lending in the UK – including mortgages – will be reviewed again on August 7 by the Bank's Monetary Policy Committee.
'I really do believe the path is downward,' Mr Bailey told The Times.
He added: 'But we continue to use the words 'gradual and careful' because… some people say to me 'why are you cutting when inflation's above target?''
The governor's indication that lower lending rates and reduced inflation could be around the corner comes as the Government is facing pressure to improve living standards.
Ms Reeves' tax and spend plans are also being constrained by the current borrowing costs, as well as downgraded growth forecasts.
The Chancellor's fiscal headroom has been in part eroded by U-turns on the winter fuel payment and welfare reforms, as well as global shocks to the British economy.
Some in the Labour Party, including former leader Lord Neil Kinnock and Wales's First Minister Baroness Eluned Morgan, are calling for a wealth tax to help bolster the public finances.
On Sunday, Transport Secretary Heidi Alexander said such a tax had not been 'directly' discussed when ministers held an away day at the end of last week.
But speaking to Sky News' Sunday Morning With Trevor Phillips programme, she would not rule out tax rises at the autumn budget, only saying tax decisions would be made based on 'fairness'.
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Glasgow Times
22 minutes ago
- Glasgow Times
What does the universal credit immigration data show?
A total of 7.9 million people were receiving universal credit (UC) as of June 2025, up from 6.8 million a year earlier, according to the Department for Work & Pensions. The vast majority of current claimants are people who live or work in the UK without any immigration restrictions: British and Irish nationals, plus those who have right of abode in the country. Some 6.6 million people were in this category in June, making up 83.6% of all claimants. This is a higher proportion than a year earlier (82.5%) as well as being a jump of one million from 5.6 million. The next largest proportion are people who have a right to live in the UK under the EU Settlement Scheme. These accounted for 9.7% of all claimants in June 2025, down from 10.7% a year earlier, though the number of people in this category rose slightly from 732,107 to 770,379. Some 2.7% of claimants were classed as having indefinite leave to remain in the UK, separate from the EU Settlement Scheme, up from 2.2% a year earlier. This status gives people the right to live, work and study in the UK for as long as they like and apply for benefits if they are eligible. Some 211,090 people were in this category, up from 150,838 in June 2024. The proportion of claimants who had refugee status was 1.5%, down from 1.6%, though the number rose slightly from 111,011 to 118,749. The percentage in the UK for humanitarian reasons was unchanged year-on-year at 0.7%, with the number up slightly from 51,146 to 54,156. In addition, there was a fall in both the number and proportion of claimants classed as having limited leave to remain, or temporary immigration status, from 1.3% (86,129) to 1.0% (75,267). Overall, people from outside the Common Travel Area of UK and Ireland accounted for 15.6% of UC claimants in June 2025, down from 16.5% in June 2024. This covers the five categories of the EU Settlement Scheme, humanitarian status, refugee status, indefinite leave to remain and limited leave to remain. The number of claimants across these categories increased from 1.1 million to 1.2 million year on year, up by nearly a tenth. But the total number of UC claimants rose by a faster rate, up by nearly a sixth, from 6.8 million to 7.9 million. This is why the proportion of claimants from outside the Common Travel Area shrank year-on-year, from 16.5% to 15.6%, even though the number of these claimants rose. With 83.6% of claimants in June 2025 from inside the Common Travel Area and 15.6% from outside, the remaining 0.8% either had no immigration status recorded (0.4%) or were classed as 'other' (0.4%), such as people no longer receiving UC payments or ineligible partners of an eligible UC claimant. These percentages have changed only slightly in recent years. The proportion of claimants from the Common Travel Area of the UK and Ireland stood at 82.9% three years ago in June 2022, 82.4% in June 2023, 82.5% in June 2024 and 83.6% in June of this year. The proportion from outside the Common Travel Area was 16.2% in June 2022, 16.7% in June 2023, 16.5% in June 2024 and 15.6% in June 2025. The new data also includes a breakdown of universal credit claimants by employment and immigration status. It shows that 34% of people on UC in May 2025 (2.7 million) were in employment and 66% (5.1 million) were out of work. A year earlier the figures were 38% (2.6 million) and 62% (4.2 million). Among the 5.1 million claimants who were not in employment in May 2025, 12% (604,914) were foreign nationals while 85% (4.3 million) were British and Irish nationals or those who have right of abode in the UK. These figures stood at 12% (514,961) and 84% (3.5 million) in May 2024. Of the 604,914 foreign nationals out of work and claiming UC in May this year, 343,741 were in the UK under the EU Settlement Scheme; 109,324 had indefinite leave to remain; 60,753 had refugee status; 49,790 had humanitarian status; and 41,306 had limited leave to remain. Universal credit is available to people on a low income as well as those who are unemployed.
Belfast Telegraph
32 minutes ago
- Belfast Telegraph
Emma Little-Pengelly slams criticism of NI economy: 'I am sick of some who constantly talk down NI'
Emma Little-Pengelly's comments follow Mary Lou McDonald's appearance on Good Morning Britain, where she made the case for reunification of the island of Ireland. 'We are now 27 years on from the Good Friday Agreement, as we all know a historic moment where we settled on the democratic and institutional arrangements to end what was a conflict that ran for centuries,' she said. 'We created the space to build peace and reconciliation, build friendships, build relationships across the island of Ireland, but also between Ireland and Britain. At the heart of that agreement is the commitment to a referendum to make the decision on partition. 'Just remember, more than a century ago Ireland was partitioned down the barrel of a British gun. There was no democracy involved. It was imposed on the island, and the consequences of it were literally devastating for our island, and deeply damaging to he relationship between Britain and Ireland. We need to fix all that. 'Politics has changed, we've all moved on, the peace has been established, I think we have made enormous strides, all of us, and I think Ireland and Britain and all the political leaders and the people deserve great credit for that. 'Now we're at a point where we say 'what's the next chapter?' For us, logically, in economic terms, in social terms, in democratic terms Irish unity makes sense.' Speaking at the QUB Global Economic Forum on Tuesday, Ms Pengelly criticised the comments and highlighted successes across several sectors. "I am sick of some who constantly talk down Northern Ireland,' Ms Little-Pengelly said. 'We are tasked with the responsibility and the honour of promoting this wonderful place with so much potential.' The DFM added that the region has attracted high levels of foreign direct investment and has over 1500 international firms operating locally. 'NI has one of the lowest levels of unemployment across the UK, and one of the highest educated and youngest workforces across these islands,' she continued. 'Northern Ireland deserves champions to promote all that is great about Northern Ireland. Those who believe in the future of our economy and will work to realise it." Ms Little-Pengelly also hit out at comments made by GMB host Richard Madeley who said Northern Ireland is 'close to being a basket case.' During the interview, Mr Madeley asked Ms McDonald: 'Why do you want Northern Ireland still so badly? Because, economically, I think it's fair to say it's close to being a basket case at the moment.' News Catch Up - Tuesday 15th July Ms Little-Pengelly rejected this claim and said the region is a 'base case for investment.' "Northern Ireland is far from an economic "basket case", indeed it is a base case for investment,' the DUP MLA said. 'And I welcome that was recognised by the many economists and experts in the Global Economic Forum today.' She called for Sinn Fein minister clarify if they are 'working to promote' the local economy. 'Our position has part of the UK, while having huge international access and appeal can truly elevate NI to new heights. "The economic plans of Sinn Fein as outlined by Michelle O'Neill and Mary-Lou McDonald in London this week are based on vagueness and fantasy. It is economic illiteracy. 'Michelle O'Neill and SF Economy Minister Archibald need to be open with the public - are they working to promote our economy or have they simply binned it as economically unviable."
Leader Live
34 minutes ago
- Leader Live
Chancellor's Leeds Reforms to put money in people's pockets
In the Chancellor's Leeds Reforms, Rachel Reeves has unveiled a package of reforms to the UK's financial system set to be the biggest in a decade, aimed at delivering economic growth and spurring on retail investing. Changes include reforming the bank ring-fencing regime and reducing red tape in the City in order to reintroduce 'informed risk-taking' into the financial system, the Government said. The Chancellor said the 'Leeds reforms', unveiled in the West Yorkshire city, 'represent the widest set of reforms to financial services for more than a decade'. New measures are intended to help drive increased levels of investment among both financial firms and individuals. The Treasury said the ring-fencing regime – which was brought in after the 2008 financial crisis to separate banks' retail and investment banking activities – will be reformed. Economic Secretary Emma Reynolds will lead a review into how changes can strike the right balance between growth and stability, including protecting consumers' deposits, it said. Britain is a global outlier in enforcing ring-fencing, and major banks have been divided over whether the system is necessary to protect savers or is overly burdensome. The Treasury said it was backing regulatory reforms for mid-sized banks to free up money for lending and investment. Furthermore, the plans include cutting layers of red tape for businesses in the City. This will see the UK's Financial Ombudsman Service – which settles complaints between consumers and businesses – modernised and simplified to help create a more predictable system and prevent consumer compensation being delayed. It will also speed up changes to the senior managers regime, which was also brought in after the 2008 crisis to vet individuals before they are appointed and hold them accountable for problems and risk-taking. The Government said it will radically streamline the current regime and cut the burden on firms in half. The Leeds Reforms - named after one of our financial services' hubs and a city I'm proud to represent - will deliver the biggest package of reforms to financial services regulation in a decade. Kickstarting economic growth and putting more pounds in people's pockets. Cuts to City red tape sit alongside efforts to boost the level of investment among individuals. This includes rolling out 'targeted support' from April next year, whereby banks can alert customers with cash sitting in low-return current accounts about investment opportunities. Major banks and financial firms including Barclays, Lloyds, Vanguard and Hargreaves Lansdown are backing a new advertising campaign highlighting the benefits of investing. Risk warnings on investment products could also potentially be watered down as part of a review into possible barriers to investing. The Government also said it will continue to consider reforms to ISAs and savings to strike the right balance between cash savings and investment. Ms Reeves was widely expected to leave cash ISAs untouched in the measures announced on Tuesday (July 15), following speculation that she was planning to cut the annual tax-free allowance in a bid to spark more investment instead. 'We are fundamentally reforming the regulatory system, freeing up firms to take risks and to drive growth,' Ms Reeves told finance chiefs when setting out the reforms in Leeds. Recommended reading: HMRC urging parents to claim £2,000 tax-free childcare HMRC Child Benefit changes with opt-in campaign for parents More than half a million more savers to benefit from HMRC cash - apply today Adam French, consumer expert at says: 'It is encouraging to see steps being taken to make retail investing a less daunting proposition by plugging the advice gap and empowering firms to give more targeted support while maintaining appropriate safeguards. But it is only part of the puzzle. 'It is also essential that we avoid a return to the low interest rates of the past decade which had a significant and often overlooked side effect: skewing investment priorities by driving capital into property instead of more productive areas of the economy. For the Leeds Reforms to work it must be the case that backing the next generation of British businesses looks safer and more rewarding than property speculation.' Brian Byrnes, head of personal finance at Moneybox, adds: "It is encouraging to see steps being taken to support first-time buyers. Enabling people to borrow more is not a silver bullet. What first-time buyers truly need is not just the ability to take on more debt, but meaningful, long-term support to help them start saving and investing earlier in life so they can build up that all-important deposit." Sarah Coles, head of personal finance for Hargreaves Lansdown, also comments: 'It's incredibly positive to see Rachel Reeves take some key steps towards closing the UK's yawning retail investment gap. 'There will be a new era of investment with the advent of new rules allowing companies to offer targeted support to their clients, alongside changes to risk warnings so they actively help retail investors understand their options rather than standing in their way of harnessing the incredible power of investment.'
