Business
Bank of England poised for Christmas interest rate cut after inflation slows
Interest rates are set to be cut before Christmas after inflation fell to an eight-month low in November, economists think.
The Bank of England is widely expected to reduce borrowing costs to 3.75% from 4% when it next announces its next decision on Thursday.
This would bring borrowing costs down to the lowest rate since the beginning of February 2023.
Experts have said the Bank’s Monetary Policy Committee (MPC) will be encouraged by recent economic data to lower rates at its final meeting of the year.
In particular, the decision follows the release of the latest inflation data, which showed a bigger drop to Consumer Prices Index (CPI) inflation than analysts had been expecting.
The rate of CPI fell to 3.2% in November, from 3.6% in October, the Office for National Statistics (ONS) said.
This was largely driven by food and drink inflation which dropped to 4.2% from 4.9%, while alcohol and tobacco prices also eased.
Danni Hewson, head of financial analysis for AJ Bell, said: “Although 3.2% is still way above the Bank of England’s target, it is expected to be the final piece in the puzzle which will enable rate setters to deliver their own festive gift to borrowers with an interest rate cut on Thursday.”
The Bank is tasked with bringing inflation down to the 2% target level.
Ms Hewson added: “There are still massive question marks about what 2026 will bring and markets don’t expect the Bank of England to cut interest rates more than once or twice over the next year, so borrowers hoping to see a return to the ultra-low levels many people had become used to will have to adapt.”
James Smith, developed market economist for ING, said the sharp drop in November inflation “green lights” a December rate cut.
“Christmas has come early for the doves at the Bank of England, with inflation coming in well below expectations in November,” he said.
Mr Smith said he was expecting inflation to edge higher in December, partly due to a seasonal spike in air fares.
However, he said the “latest drop in inflation fits into a broader body of evidence suggesting that price pressures are cooling”, adding: “We expect headline inflation to fall pretty close to 2% by May.”
He is forecasting another two cuts to interest rates in February and April next year.
Alongside falling inflation, the MPC is expected to take note of other signs that the economy is cooling including rising unemployment, slower wage growth and stagnant economic growth.
MUMBAI/BENGALURU: The restaurant industry is struggling to run regular operations due to the meagre supplies of LPG cylinders . With the govt’s move to hike commercial LPG allocation to up to 70%, it will take some time before the measure actually translates into sustained supply, executives said. “Supply is still hugely limited and erratic. A feeling of uncertainty looms large,” said Anurag Katriar, founder at Indigo Hospitality. The key question is how quickly this revised allocation will translate into on-ground availability, said Pradeep Shetty, vice-president at Federation of Hotel & Restaurant Associations of India (FHRAI).A walk along Indiranagar’s 12th Main, known for its cluster of independent restaurants, reflects the strain. “It is all hand-to-mouth at this point,” said Nikhil Gupta, who runs brands including The Pizza Bakery and Paris Panini . The move doesn’t directly help the restaurant sector which is still getting 20%-30% of LPG supplies, said Sagar Daryani, co-founder & CEO at Wow! Momo Foods and president at National Restaurant Association of India (NRAI). State-wise, the supply situation varies with some such as Maharashtra, Karnataka, Rajasthan restricting allocation for restaurants, hurting the sector , Daryani said.
Motorists are facing higher fuel prices ahead of Easter break due to the conflict in the Middle East, the RAC says.
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Business
E-cheques coming soon? RBI unveils Payments Vision 2028, plans wider oversight of digital players – The Times of India
The Reserve Bank of India (RBI) on Friday unveiled its ‘Payments Vision 2028’ document, outlining a roadmap that includes exploring electronic cheques, expanding regulatory oversight to digital platforms, and strengthening safeguards in the fast-growing payments ecosystem, PTI reported.The central bank said it will examine the introduction of e-cheques to combine the advantages of paper instruments with the speed and reliability of digital payments. “To leverage the unique benefits of paper-based instruments and the speed and reliability of electronic payments, and cater to new business use cases, the introduction of electronic cheques in India shall be explored,” the RBI said.Alongside, the RBI is considering widening the regulatory ambit to include entities such as e-commerce marketplaces and centralised platforms that play a growing role in facilitating digital transactions.“In addition, e-commerce marketplaces and centralized platforms have been assuming significant responsibilities that could have implications on the orderly functioning of the payments ecosystem. These aspects shall be examined in detail and, if required, the scope of direct regulations shall be extended to cover such entities,” the document said.The vision document also proposes allowing users to enable or disable transactions across digital payment modes, similar to controls available for card transactions.To address fraud risks, the RBI is exploring a “shared responsibility framework” under which both the issuing bank and the beneficiary bank would share liability in cases of unauthorised digital transactions.The central bank also plans to review cheque design and security features, introduce a Domestic Legal Entity Identifier (DLEI) framework for better transaction traceability, and bring in a Cyber Key Risk Indicators (KRI) framework for non-bank payment system operators.Other initiatives include exploring white-label solutions in the Aadhaar Enabled Payment System (AePS), developing interoperability in the Trade Receivables e-Discounting System (TReDS), and introducing a ‘Payments Switching Service’ to ease customer migration across platforms.The RBI said it will also review the cross-border payments ecosystem to improve efficiency and streamline authorisation processes, alongside publishing periodic reports on global and domestic payment trends.Additionally, the central bank aims to enhance access to payment data and reimagine the card payments ecosystem by promoting secure tokenisation, improved transparency in pricing, and greater choice for users and merchants.
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