Closing summary
European Central Bank president Christine Lagarde has said that policymakers agreed at today’s meeting that talk of interest rate cuts is “premature”. Last week, she told Bloomberg in Davos that the bank could start cutting rates in the summer.
The pace of US economic growth slowed in the last three months of 2023, but far less than had been expected, underlining the continued resilience of the economy. Growth slowed to an annualised rate of 3.3% from 4.9% in the third quarter. The economy grew by 2.5% in 2023, its best performance since 2021.
Lloyds Banking Group is cutting around 1,600 jobs across its branch network as it shifts more services online to save money.
It will also create around 830 jobs elsewhere in the bank.
Britain’s next government faces some of the toughest tax and spending choices for generations as it will be forced to grapple with the impact of weak growth and high debt interest payments, a leading thinktank has said.
The Institute for Fiscal Studies (IFS) warned that Jeremy Hunt’s much-predicted budget tax cuts risked being reversed or paid for by spending cuts, and urged the Conservative and Labour parties to “level” with voters before polling day.
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Thank you for reading. We’ll be back tomorrow. Bye! – JK
Updated
Bank of England, Treasury press ahead with 'digital pound'
The government and the Bank of England will press ahead with the design of a digital pound without pledging that a “Britcoin” will become available to the British public.
Officials at the Bank and the Treasury said a consultation exercise last year showed there was an appetite for a new method of transferring money electronically.
Responding to concerns that the Bank and the government would have access to users’ personal data, officials said primary legislation would safeguard digital currency users in the same way bank accounts are protected at the moment.
The Treasury said it would also maintain cash in circulation after a strong backlash from among the 50,000 respondents to the consultation, including MPs, who feared paper banknotes and coins would be phased out.
More than 40 countries are understood to be pursuing the development of a digital currency that is expected to rival the crypto currencies Bitcoin and Ethereum, which are valued on independent exchanges.
Supporters of the scheme, which could be launched before the end of the decade with the Bank acting as the backstop or custodian of the new digital currency, said it will allow innovation in the UK financial services sector, keeping firms in financial centres across the UK at the forefront of a global market place.
Critics, including members of the House of Lords economic affairs committee, have said they have “yet to hear a convincing case” for why the UK needs a central bank digital currency (CBDC), while some MPs asked whether the plan is “a solution in search of a problem”.
Simon Youel, head of policy and advocacy at research and campaign group Positive Money, said the government needed to respond to the rise of private crypto currencies.
The huge response to the consultation highlights the importance of a genuinely inclusive national conversation on the future of our money, which is presently facing a rapid privatisation as cash gets replaced by electronic bank money.
