The Bank of England needs to cut rates now: ALEX BRUMMER

Britain is getting on top of its inflation problem. Headline inflation, at 3.4 per cent, is down, core prices (which exclude energy and food) are dropping sharply, service sector costs are in retreat and some fresh food prices are falling.

All of this before the Bank of England’s monetary squeeze has had enough time to work.

There could not be a better moment for the Bank of England to get ahead of the game than today.

A cut in rates from the present 5.25 per cent would demonstrate that it is still as pro-growth and employment as when it lowered borrowing costs at the start of the pandemic.

It would place the UK a step ahead of America’s central bank, the Federal Reserve, which held its key rate at 5.25 per cent to 5.5 per cent last night.

Price fight: The fundamental job of the Bank of England is to hit the 2% inflation target. Shadow Chancellor Rachel Reeves has given this goal the thumbs-up 

Lower rates would boost consumption, underpin an anaemic housing market, make it cheaper for firms to borrow and help bring down the Government’s interest rate bill.

The same groupthink which infected the Bank when it failed to recognise the inflation danger now exists on the way down.

It would be brilliant to see opinion unifying around lower interest rates.

The fundamental job of the Bank is to hit the 2 per cent inflation target. Shadow Chancellor Rachel Reeves has given this goal the thumbs-up.

The only change she put forward in her Mais Lecture was restoration of a climate change objective in setting rates.

Her stress on the green agenda has two sources. Firstly, she has been listening to former governor Mark Carney, a carbon-free zealot, who endorsed her at last year’s Labour conference. 

Secondly, Labour, having backed away from its £28billion green revolution, needs to show it still has what Reeves described as ‘green taxonomy’.

Reeves’ speech was all about convincing City grandees that she is a safe pair of hands. 

As a former Bank of England insider, it would have been terrific if she’d provided insight into what needs to change if the Bank is to be a better steward.

That would require more diversity of thinking on the Monetary Policy Committee, such as industrial labour expertise, financial market expertise and more members from outside the magic circle of Treasury officials.

As we await change, Governor Andrew Bailey and his insiders need to wake up, smell the coffee and give prosperity a chance.

Dyson dust-up

Chancellor Jeremy Hunt long has argued that ‘full expensing’ of business investment is more important than the headline rates of corporation tax.

There was never going to be a great meeting of minds when he held talks with Britain’s engineer and inventor-in-chief James Dyson, who is a critic of ‘rocketing corporation tax’.

The FT reports dissension when the two men discussed tax relief for research and development (R&D) a week ago.

Hunt reportedly suggested that if Dyson really cares he should become an MP.

Dyson accuses the Government of boasting about UK science and tech but scandalously neglecting the sector.

Targets for boosting R&D in Britain no longer seem to be a priority. Among world leaders in innovation the US spends 3.4 per cent of GDP on R&D and Israel 5.6 per cent.

Finding ways to match that is the real growth challenge for Reeves if and when she marches into the Treasury.

Toy story

Many have tried it before but turning around model trains maker Hornby, owner of classic kids brands Corgi and Airfix, has been a thankless task.

Now its Mike Ashley’s turn. Having built up a 8.9 per cent stake, he joins as a consultant.

It is not clear that the pile-it-high-and- sell-it-cheap Sports Direct philosophy is the answer.

There is a golden opportunity for moving classic toys into the 21st century through franchising, streaming and gaming platforms.

What is needed is imagination and investment. Anything Mattel can do, Hornby can do better.

This post first appeared on Dailymail.co.uk