Closing post
Time to recap.
The Bank of England have predicted last month’s budget will have a downward impact on inflation.
BoE deputy governor Clare Lombardelli told the Treasury Commitee that Rachel Reeves’s fiscal measures could knock up to half a percentage point off inflation next year, broadly inline with forecasts from the Office for Budget Responsibility.
The Bank also poured cold water on claims that uncertainty, and the flurry of news stories, in the run-up to the budget had caused market instability. Bank staff have calculated there was less volatility than normal.
But policymakers did also tell MPs that there was a “detrimental impact” on consumer confidence and investment, as people waited to learn what was in the budget.
Elsewhere…
Donald Trump’s decision to allow Nvidia to export its H200 artificial intelligence chip to China has been criticised as a “colossal economic and national security failure” by Democrat senators…
…although it’s been welcomed by Nvidia!
The EU has opened an investigation to assess whether Google is breaching European competition rules in its use of online content from publishers and YouTube creators for artificial intelligence.
The boss of Ford has said western carmakers are “in a fight for our lives” against Chinese competition as the US manufacturer agreed a new partnership with France’s Renault.
The online card service Moonpig has reported a bump in sales thanks in part to its increased use of AI to help design cards, personalise customers’ messages and answer queries.
MPC's Dhingra:commodity price shocks are behind UK's inflation surges
The Treasury committee hearing wraps up with an explanation of the drivers behind the UK’s episodes of high inflation.
BoE policymaker Swati Dhingra explains she has looked at the impact of Brexit, the first Trump trade wars, and other times when inflation pressures rose.
And, she says, the “ones that really really matter when it comes to our inflation target is still commodity price shocks.”
Dhingra adds:
If you go back to the 1960s, the times when the UK saw high inflation episodes is precisely the times when there have been big global commodity shocks.
