Rachel Reeves hold EU 'reset' talks (Image: Handout - Rachel Reeves)
Rachel Reeves continued to cosy up to Brussels this morning in another “reset the relationship” meeting with an EU executive.
The Chancellor held talks with Valdis Dombrovskis, the bloc’s economy chief, and hailed the building of “stronger cooperation on economic security”.
by Taboola by Taboola
Sponsored Link Sponsored Link
Promoted Links Promoted Links
Frequent Searches
The New Volvo EX90 SUV Will Leave You Speechless (Take A Look)Frequent Searches Learn More
Undo
But the meeting came after the Eurozone suffered a huge blow this week as inflation surprisingly accelerated, meaning it has been above the ECB's 2% target for over three years.
Ms Reeves said in a short statement: “To deliver prosperity at home, Britain must be a trusted and reliable global partner.
Rachel Reeves held talks with the EU chief on Friday (Image: Handout - Rachel Reeves)
“Great to speak with Valdis Dombrovskis as the government continues its work to reset the relationship with European friends, building stronger cooperation on economic security and supporting Ukraine.”
Sponsored
Vitality Vista
Vitality Vista Learn More
Shoppers Can’t Get Enough: Discover the Soda That Melts Belly Fat
Undo
by Taboola by Taboola
The inflation rate rose to 2.6 percent from 2.5 percent in June, preliminary data from Eurostat showed Wednesday. Analysts had expected it to be stable. Inflation has now been above the ECB’s 2 percent target for exactly three years.
Mr Dombrovskis said after the virtual meeting with Ms Reeves: “Good first call with UK Chancellor of the Exchequer Rachel Reeves
“In the current geopolitical context, close cooperation with likeminded partners is more important than ever.”
The Bank of England on Thursday cut interest rates for the first time since 2020, but signalled people should not expect borrowing costs to start dropping rapidly in the months ahead.
The central bank reduced the base rate from 5.25% to 5% after a split vote among its policymakers.
It means pressure will be eased for some homeowners who will see their mortgage costs come down, but it could prompt banks to start reducing savings rates.
The decision marks a turning point for the Bank's Monetary Policy Committee (MPC), which has not implemented an interest rate cut since the onset of the Covid-19 pandemic in March 2020.
Bank governor Andrew Bailey said: "Inflationary pressures have eased enough that we've been able to cut interest rates today.
Trending
SUBSCRIBE Invalid email
We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. Read our Privacy Policy
"But we need to make sure inflation stays low, and be careful not to cut interest rates too quickly or by too much."
It suggests rates are likely to fall more gradually than they have risen in recent years.
Many economists believe rates will be kept unchanged when the committee next meets in September, but another cut could come in November.
Mr Bailey said the committee had become "sufficiently confident" that it is the right time to reduce rates, but stressed it remains "highly alert" to any signs that inflation might increase.
He said the MPC will "pay close attention" to factors such as price rises across the services sector.
The ECB’s next monetary policy decision will be taken on September 12. President Christine Lagarde said at her last press conference that the September decision is “wide open”, but markets have been pricing an 80 percent chance that the ECB will cut its key deposit facility rate to 3.5 percent from 3.75 percent currently.
DON'T MISS
Powered by
Savings accounts that have cut rates after Bank of England's base change
Comments
What is a recession, are we heading towards one and what does it mean for you?
Comments
Global financial crash warning as Labour's 'deluded' economic master plan about to implode
115 Comments
Bank boosts rate offered on fixed savings account to 'excellent' 5.2%
Comments
Rachel Reeves accused of hatching huge 'con' of voters with secret plot to borrow billions
222 Comments
Urgent stock market crash warning as "US will collapse in a big way". Will UK follow?
237 Comments
Rachel Reeves rumbled as Jeremy Hunt exposes Labour's lies after UK interest rate cut
440 Comments
Urgent warning to everyone with ￡10,000 in savings account
4 Comments
Best ISA, easy access, and fixed savings accounts this week paying up to 7% interest
64 Comments
Enjoy the BoE rate cut - it could be the last this year
14 Comments
Exact region that suffered biggest house price fall - how does yours rank?
1 Comments
Jeremy Hunt blasts Labour's blackhole ‘fiction' and warns Rachel Reeves will regret lying
195 Comments
‘I'm a pension expert - here's what the tumbling stock market means for you'
1 Comments
Hopes of home loan price war and return to sub 4% fixed rate mortgages
Comments
US recession could spark huge hits on UK finances - interest rates at risk expert says
2 Comments
Interest rates could be cut by Bank of England in hours - here's why
15 Comments
Eurozone inflation rises unexpectedly as ECB rate cut decision looms
7 Comments
Black Monday! Share price "tsunami" as market panic smashes pension and Isa savers
105 Comments
Healthy Glam
Dana Delany, 68, Shows Off Her Perfect Figure In A New PhotoHealthy Glam
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
Economy warning as pound weakens ahead of Rachel Reeves announcement
67 Comments
Interest rates LIVE: Homeowners hold their breath as UK awaits Bank of England decision
143 Comments
Savings accounts that have cut rates after Bank of England's base change
Comments
What is a recession, are we heading towards one and what does it mean for you?
Comments
Global financial crash warning as Labour's 'deluded' economic master plan about to implode
115 Comments
Bank boosts rate offered on fixed savings account to 'excellent' 5.2%
Comments
Rachel Reeves accused of hatching huge 'con' of voters with secret plot to borrow billions
222 Comments
Urgent stock market crash warning as "US will collapse in a big way". Will UK follow?
237 Comments
Rachel Reeves rumbled as Jeremy Hunt exposes Labour's lies after UK interest rate cut
440 Comments
Urgent warning to everyone with ￡10,000 in savings account
4 Comments
Best ISA, easy access, and fixed savings accounts this week paying up to 7% interest
64 Comments
Enjoy the BoE rate cut - it could be the last this year
14 Comments
Exact region that suffered biggest house price fall - how does yours rank?
1 Comments
Jeremy Hunt blasts Labour's blackhole ‘fiction' and warns Rachel Reeves will regret lying
195 Comments
‘I'm a pension expert - here's what the tumbling stock market means for you'
1 Comments
Hopes of home loan price war and return to sub 4% fixed rate mortgages
Comments
US recession could spark huge hits on UK finances - interest rates at risk expert says
2 Comments
Interest rates could be cut by Bank of England in hours - here's why
15 Comments
Eurozone inflation rises unexpectedly as ECB rate cut decision looms
7 Comments
Black Monday! Share price "tsunami" as market panic smashes pension and Isa savers
105 Comments
Economy warning as pound weakens ahead of Rachel Reeves announcement
67 Comments
Interest rates LIVE: Homeowners hold their breath as UK awaits Bank of England decision
143 Comments
Savings accounts that have cut rates after Bank of England's base change
Comments
What is a recession, are we heading towards one and what does it mean for you?
Comments
Global financial crash warning as Labour's 'deluded' economic master plan about to implode
115 Comments
Bank boosts rate offered on fixed savings account to 'excellent' 5.2%
Comments
Rachel Reeves accused of hatching huge 'con' of voters with secret plot to borrow billions
222 Comments
Urgent stock market crash warning as "US will collapse in a big way". Will UK follow?
237 Comments
Rachel Reeves rumbled as Jeremy Hunt exposes Labour's lies after UK interest rate cut
440 Comments
Happy in Shape
Entitled Woman On Plane Gets Taught A Lesson - Then They Realise Who She IsHappy in Shape
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
The key is likely to be how policymakers will gauge price pressures in the all-important service sector.
Global stock markets have plunged amid fears that the US Federal Reserve has left it too late to begin cutting interest rates and risks damaging the world’s largest economy.
The pan-European Stoxx 600 index fell as much as 1.7pc to a three-month low, while Germany’s Dax dropped as much as 1.6pc and the Cac 40 in France dipped as sharply as 1pc.