The Bank of England held its main interest rate at the record low of 0.1 per cent on Thursday and stuck with its £895 billion stimulus measures despite fears about rising inflation.
While the Monetary Policy Committee (MPC) voted to keep the central bank’s ultra-loose monetary policy settings in place, there was a shift in tone on the outlook for the economy.
The BoE said developments over the past month have strengthened the case made in August that some tightening of monetary policy could be necessary to meet the central bank's 2 per cent inflation target sustainably in the medium term.
But the MPC said that "considerable uncertainties remain", with policymakers led by Governor Andrew Bailey unanimously agreeing that any future tightening should start with an interest-rate increase.
“There was increasing evidence from a range of global and domestic cost and price indicators that inflationary pressures were likely to persist,” the minutes of the MPC meeting said. “These members judged that, with the existing policy stance, inflation was likely to remain above the 2 per cent target in the medium term.”
With supply chain challenges, staff shortages and surging energy prices hampering business activity, Britain’s private sector lost more momentum in September with the IHS Markit/CIPS flash Composite Purchasing Managers' Index dropping for a fourth consecutive month in September to its lowest reading since February.
Meanwhile, the latest ONS Business insights survey showed that in late August almost one in five businesses were either not able to get the materials, goods or services they needed from within the UK, or were forced to change suppliers or find other alternatives.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said given the challenges the UK economy faces at the moment, it is no surprise the BoE opted "for the least worst option which right now is to do nothing, and make no changes to monetary policy".
"The fact that there was unanimous agreement around the table at the monetary policy committee not to raise rates highlights the conundrum facing policymakers," Ms Streeter said.
"They have a particularly difficult puzzle to piece together right now because rising prices are now acting as a drag on the economic recovery, which limits their room for immediate manoeuvre on action to curb soaring inflation. In just a month pressures have mounted so much that the bank is now downgrading its forecast of economic growth for the third quarter by 1 per cent."
Meanwhile, the MPC's seven-to-two vote to keep the bond-buying target unchanged highlights the committee's "growing hawkish tilt", according to Stuart Cole, chief macroeconomist at stockbroker Equiti Capital, which suggests the case for a policy tightening "is growing".
Mr Cole said the key to any BoE move will be the evolution of the labour market over the next six months and “whether or not the ending of the jobs furlough scheme this month triggers a rise in joblessness and takes additional spending out of the economy”.
Traders brought forward wagers on a BoE rate hike to 0.25 per cent with money markets now seeing a 15-basis-point increase in March 2022, having priced it for May before Thursday’s meeting.
They still see a further quarter of a percentage point rise to 0.5 per cent in November 2022.
While the central bank traditionally shifts its key interest rate by multiples of 25 basis points, it last cut rates by 15 basis points in March 2020, at the height of the coronavirus pandemic. If officials wanted to raise rates, a move back to 0.25 per cent is seen by strategists as the likely first step.
Laith Khalaf, head of investment analysis at AJ Bell, said a record jump in inflation has not stirred BoE policy makers, who are steadfastly maintaining the mantra that price rises are transitory.
"That doesn’t mean they will be short-lived however. The bank expects inflation to hit 4 per cent this winter and still to be above 3 per cent this time next year, so consumer pockets and cash savings are still going to take a big hit. The bank has also conceded that the gas price crunch has elevated inflationary risks heading into 2022," Mr Khalaf said.
Early November will be the next tipping point to cause markets to pause for breath, he said, as both the US Federal Reserve and the BoE could set out their tightening plans.
"Fed chairman Jay Powell has indicated that QE tapering could easily begin at the November meeting, and the BoE will finally have employment data to look at that isn’t distorted by the furlough scheme," Mr Khalaf said.
"Until then, central banks are still playing the same tune, and investors are happy to keep on dancing, with little regard to what happens when the music stops. But if central banks do signal tighter policy at the beginning of November, we can expect some fireworks.”
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Global state-owned investor ranking by size
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Abdul Jabar Qahraman was meeting supporters in his campaign office in the southern Afghan province of Helmand when a bomb hidden under a sofa exploded on Wednesday.
The blast in the provincial capital Lashkar Gah killed the Afghan election candidate and at least another three people, Interior Minister Wais Ahmad Barmak told reporters. Another three were wounded, while three suspects were detained, he said.
The Taliban – which controls much of Helmand and has vowed to disrupt the October 20 parliamentary elections – claimed responsibility for the attack.
Mr Qahraman was at least the 10th candidate killed so far during the campaign season, and the second from Lashkar Gah this month. Another candidate, Saleh Mohammad Asikzai, was among eight people killed in a suicide attack last week. Most of the slain candidates were murdered in targeted assassinations, including Avtar Singh Khalsa, the first Afghan Sikh to run for the lower house of the parliament.
The same week the Taliban warned candidates to withdraw from the elections. On Wednesday the group issued fresh warnings, calling on educational workers to stop schools from being used as polling centres.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The specs
Engine: 6.2-litre supercharged V8
Power: 712hp at 6,100rpm
Torque: 881Nm at 4,800rpm
Transmission: 8-speed auto
Fuel consumption: 19.6 l/100km
Price: Dh380,000
On sale: now
UAE currency: the story behind the money in your pockets
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
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Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
The lowdown
Badla
Rating: 2.5/5
Produced by: Red Chillies, Azure Entertainment
Director: Sujoy Ghosh
Cast: Amitabh Bachchan, Taapsee Pannu, Amrita Singh, Tony Luke
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
UAE currency: the story behind the money in your pockets
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
Winners
Best Men's Player of the Year: Kylian Mbappe (PSG)
Maradona Award for Best Goal Scorer of the Year: Robert Lewandowski (Bayern Munich)
TikTok Fans’ Player of the Year: Robert Lewandowski
Top Goal Scorer of All Time: Cristiano Ronaldo (Manchester United)
Best Women's Player of the Year: Alexia Putellas (Barcelona)
Best Men's Club of the Year: Chelsea
Best Women's Club of the Year: Barcelona
Best Defender of the Year: Leonardo Bonucci (Juventus/Italy)
Best Goalkeeper of the Year: Gianluigi Donnarumma (PSG/Italy)
Best Coach of the Year: Roberto Mancini (Italy)
Best National Team of the Year: Italy
Best Agent of the Year: Federico Pastorello
Best Sporting Director of the Year: Txiki Begiristain (Manchester City)
Player Career Award: Ronaldinho
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War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Killing of Qassem Suleimani
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
The five types of long-term residential visas
Obed Suhail of ServiceMarket, an online home services marketplace, outlines the five types of long-term residential visas:
Investors:
A 10-year residency visa can be obtained by investors who invest Dh10 million, out of which 60 per cent should not be in real estate. It can be a public investment through a deposit or in a business. Those who invest Dh5 million or more in property are eligible for a five-year residency visa. The invested amount should be completely owned by the investors, not loaned, and retained for at least three years.
Entrepreneurs:
A five-year multiple entry visa is available to entrepreneurs with a previous project worth Dh0.5m or those with the approval of an accredited business incubator in the UAE.
Specialists
Expats with specialised talents, including doctors, specialists, scientists, inventors, and creative individuals working in the field of culture and art are eligible for a 10-year visa, given that they have a valid employment contract in one of these fields in the country.
Outstanding students:
A five-year visa will be granted to outstanding students who have a grade of 95 per cent or higher in a secondary school, or those who graduate with a GPA of 3.75 from a university.
Retirees:
Expats who are at least 55 years old can obtain a five-year retirement visa if they invest Dh2m in property, have savings of Dh1m or more, or have a monthly income of at least Dh20,000.
More coverage from the Future Forum
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
NATIONAL%20SELECTIONS
%3Cp%3E6.00pm%3A%20Heros%20de%20Lagarde%3Cbr%3E6.35pm%3A%20City%20Walk%3Cbr%3E7.10pm%3A%20Mimi%20Kakushi%3Cbr%3E7.45pm%3A%20New%20Kingdom%3Cbr%3E8.20pm%3A%20Siskany%3Cbr%3E8.55pm%3A%20Nations%20Pride%3Cbr%3E9.30pm%3A%20Ever%20Given%3C%2Fp%3E%0A
At a glance
- 20,000 new jobs for Emiratis over three years
- Dh300 million set aside to train 18,000 jobseekers in new skills
- Managerial jobs in government restricted to Emiratis
- Emiratis to get priority for 160 types of job in private sector
- Portion of VAT revenues will fund more graduate programmes
- 8,000 Emirati graduates to do 6-12 month replacements in public or private sector on a Dh10,000 monthly wage - 40 per cent of which will be paid by government
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
