Are Protesters Who Do Outrageous Things Truly Nutty?
As pro-Palestine and anti-ICE protests command our attention, climate protests have receded into the background. Yet not so long ago, the world was captivated by two climate activists who smeared red and black paint on the pedestal and enclosure of Degas' 'Little Dancer' sculpture at Washington's National Gallery of Art, and by activists who appeared to splatter Van Gogh's 'Sunflowers' with tomato soup at the British Museum. What in the world were these protesters thinking?
To answer this question, I talked to two activists who adorn iconic statues with climate messages as a form of protest–including on the Cornell University campus (where I teach). This led me to an exploration of the history of art protests, and a more nuanced view of how launching symbolic attacks on art could help change the world.Graduation Day Protest at Cornell University
Early on May 24, before proud parents and happy graduates assembled for their graduation march across the Cornell University campus, a small protest was taking shape. Activists attempted to blindfold the statue of Cornell's co-founder and first president, Andrew Dickson White. Their plan was to drape the blindfolded statue with banners carrying the messages 'Stop fossil fuel complicity' and 'Don't look away from our futures.' The activists–part of the group Cornell on Fire–also planned to hold banners along the route of the graduation procession demanding Cornell offer a 'fossil-free degree.'
But before they could finish assembling their blindfolds and banners, the protesters were stopped by the campus police and told to leave the campus. In fact, they were declared personae non gratae and barred from all Cornell properties for three years. The police encounter and three-year suspension from Cornell properties garnered Cornell on Fire media attention, more so than its carefully choreographed video of the event would have captured in the absence of the stern police response.
But was the protest successful in reaching Cornell on Fire's climate goals? Let's start by looking back at the history of art protest.Art Protest: From Suffragettes to Anti-War to Climate
Museum and art protests are not new. In 1914, British suffragette Mary Richardson walked into the British National Gallery and slashed Diego Velázquez's 'The Rokeby Venus' with a meat cleaver. Her goal was to draw attention to women's right to vote after half a century of struggle. And in a 1974 action to protest the Vietnam War, Iranian American Tony Shafrazi spray-painted 'KILL LIES ALL' in red on Picasso's 'Guernica' at New York's Museum of Modern Art. Activists believe that these 'radical fringe' protests are critical to getting the media, the public, and elected officials to pay attention to their cause, and to creating a space for more conventional advocacy to be taken seriously. But I was dubious: don't they also risk alienating the public?Art 'Vandalism'
Unlike Mary Richardson's slashing 'The Rokeby Venus,' recent climate art vandalism has not actually damaged the works of art, which are protected by glass or other means. Regardless, the shock value of these protests is real. Perhaps the most famous incident of climate art vandalism was the Just Stop Oil activists who splattered tomato soup on Van Gogh's 'Sunflowers' in the National Gallery in London. As stunned visitors looked on, the activists demanded: 'Are you more concerned about the protection of a painting or the protection of our planet and people?' In another incident at the National Museum of Norway, protesters tried to glue themselves to Edvard Munch's 'The Scream,' shouting: 'I scream for people dying' and 'I scream when lawmakers ignore science.'Museum Performances
In 2013, fifty veiled figures dressed in black walked into the Tate Museum's 1840 room, the mid-1800's being a time when the industrial revolution began to significantly raise climate emissions. They continued their solemn march through the chronologically arranged galleries to the present day contemporary art collection, noting that CO2 levels had reached 400 parts per million–exceeding what scientists say is needed to keep the earth safe for human life. In another of 14 climate 'performances,' Liberate Tate protesters occupied the museum's Turbine Hall throughout the night, scrawling warnings about climate devastation on the floor. These performances were intended to bring to light the role of fossil fuel giant BP in sponsoring the museum's exhibits, and thus the Tate's complicity in the climate change crisis. Although denying that their decision had anything to do with the protests, BP ended its 26-year sponsorship of the Tate shortly after these actions.
Scientist blindfold statue and drape statue with anti-fossil fuel message as part of Don't Look Away ... More protest at UC Berkeley.
Don't Look Away Statues
According to bethany ojalehto mays, co-founder of Cornell on Fire, the graduation day statue blindfolding protest was intended to spark curiosity using a fun, likable activity–one less likely to draw ire than throwing soup toward a famous painting. The protesters hoped that curious bystanders would take their flyers with a QR code linked to the organization's demands: sign a resolution demanding Cornell declare a climate emergency and take appropriate urgent actions; urge Cornell to dissociate from fossil-fuel funding for their retirement funds; and join a sister group called Fossil Free Cornell. Later that morning, other Cornell on Fire activists held up a banner for students and faculty marching in the graduation procession to see. The banner read: 'We demand a fossil free degree.' Like the earlier statue protest, the banner protestors were quickly stopped by the campus police.
Although I didn't realize it at first, the Cornell protests were part of a larger statue blindfolding campaign organized by Scientist Rebellion. Scientist Rebellion is a group of scientists who realize that the decades they spent writing papers, advising governments, and briefing the press have failed to generate the policies needed to thwart the climate crisis. After looking at the civil rights and other successful protests, they became convinced that non-violent civil resistance–including getting arrested for disruptive actions–was needed to bring about urgently needed change. They recognized that protests around iconic statues can generate visibility for the climate cause. So, they launched their 'Statue Blindfolding: Don't Look Away' campaign to signal to public officials: 'Don't look away (from the climate crisis) if you hope one day your city will build a statue of you"--or more seriously, to create awareness of the urgency of the climate crisis. According to Scientist Rebellion organizer Greg Spooner, one such protest in a San Francisco park near a conference center was '100 % ignored' by police as conference attendees talked with the protesters and took selfies with the blindfolded statue draped in climate protest banners.Art Protests: Effective or Not?
Lest we think recent art protests are without precedent, we can look back to the struggle for women's suffrage, which started in the mid nineteenth century. By 1913, the suffragettes were committing an average of 20 bombings and arson attacks per month. In comparison, contemporary climate activism seems rather mild. But have these disruptive protests been effective in garnering women's right to vote or changing climate policy?
We know that many people have a negative view of disruptive protests. German Chancellor Scholz reacted to protestors gluing themselves to museum art and to asphalt in the middle of busy highways: 'it's completely nutty to somehow stick yourself to a painting or on the street.' In an Annenberg Policy Center survey conducted after protestors threw tomato soup towards Van Gogh's 'Sunflowers,' 46% of respondents said that disruptive nonviolent protests decreased their support for efforts to address climate change, whereas only 13% said it increased their support. Pointing out the misfit between art vandalism and the climate movement's goals, renowned climate scientist Michael Mann warned: 'From a communications standpoint, the protest seemed like an even bigger mess than the soup-splattered painting.'
Yet a study of climate change and animal rights movements found that unpopular tactics of a 'radical flank' increase public support for moderate factions within the same movement. Other studies have shown that while people may not like the radical flank protesters, this dislike does not influence their support for the protestors' cause. Further, radical protests might not influence what people think but can influence what they think about. After disruptive climate protests in the UK, the environment emerged among the top three public concerns for the first time. The authors conclude: 'People may 'shoot the messenger,' but they do – at least, sometimes – hear the message.'
When I asked Cornell on Fire founder bethany ojalehto mays what they were accomplishing by blindfolding the President White statue, she had a ready answer. An earlier such protest had attracted many curious students, and the activists quickly ran out of flyers with the QR code connecting to actions the students could take. She hoped that the media attention generated by the police response to the graduation day protest would help Cornell on Fire amplify its message and potentially attract more adherents to its climate demands, and maybe to some of its other activities like creating science-backed reports documenting the university's emissions. In essence, Cornell on Fire combines 'radical flank' actions designed to garner attention with more moderate advocacy. Think of Greenpeace commanding media attention with its kayak flotillas surrounding huge oil tankers combined with the Environmental Defense Fund producing science-based reports for decision makers.Who Is the Radical?
UN Secretary-General Antonio Guterres takes issue with Chancellor Scholz's characterization of art protestors as 'nutty.' Speaking to climate scientists in 2022, Guterres said: 'Climate activists are sometimes depicted as dangerous radicals. But the truly dangerous radicals are the countries that are increasing the production of fossil fuels. Investing in new fossil fuels infrastructure is moral and economic madness." Guterres believes 'We are sleepwalking to climate catastrophe.' The soup throwers and activists blindfolding statues hope to wake us from our climate stupor.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
Rushanara Ali: Humiliating demise for Labour minister after a most egregious case of double standards
Rushanara Ali's swift and humiliating demise is a classic example of paying the price for the politician's crime of "do as I say, not as I do". She was Labour's minister for homelessness, for goodness' sake, yet she ejected tenants from her near-£1m town house and then hiked the rent. Politics Hub: Minister's resignation as it happened A more egregious case of ministerial double standards it would be difficult to imagine. She had to go and was no doubt told by 10 Downing Street to go quickly. 'A heavy heart' - really? MP for the East End constituency of Bethnal Green and Stepney, Ms Ali was the very model of a modern Labour minister: A degree in PPE from Oxford University. In her resignation letter to Sir Keir Starmer, she said she is quitting "with a heavy heart". Really? She presumably didn't have a heavy heart when she ejected her four tenants. She'd previously spoken out against "private renters being exploited" and said her government would "empower people to challenge unreasonable rent increases". The now former minister was charging her four former tenants £3,300 a month. Yet after they moved out, she charged her new tenants £4,000 - a rent increase of more than 20%. Read more politics news: A fragile constituency for Labour? In an area represented by the left-wing firebrand George Galloway from 2005 to 2010, Ms Ali had a majority of under 1,700 at the election last year. Ominously for Labour, an independent candidate was second and the Greens third. No doubt Jeremy Corbyn's new party will also stand next time. In her resignation letter to the PM, Ms Ali said continuing in her ministerial role would be a distraction. Too right. A distraction Sir Keir and his increasingly unpopular government could have done without.
Yahoo
4 hours ago
- Yahoo
Bank warns living standards to stagnate under Labour
Living standards will stagnate for a year under Labour as fears grow over looming tax rises, the Bank of England has Street said Rachel Reeves's record tax raid last Autumn and rising food costs driven by government policy were exerting a renewed squeeze on working people. The Bank warned that the cost of the weekly shop would keep rising for the rest of the year amid a 'challenging constellation' of weaker pay growth and higher inflation. Shop Top Mortgage Rates Personalized rates in minutes A quicker path to financial freedom Your Path to Homeownership Benefits claimants and pensioners will largely be shielded from the squeeze, with welfare payments traditionally raised in line with inflation. However, working people will be hit in a challenge to Sir Keir Starmer's promise to boost living standards in this Andrew Bailey said wage growth was slowing faster than previously thought, with forecasts showing there would be zero growth in real post-tax incomes next year. The Bank also upgraded its inflation forecasts for the next three years and warned that it would not get back to target until gloomy forecast came as the Bank cut interest rates from 4.25pc to 4pc on Thursday and delivered its latest assessment of the economy. The decision to cut borrowing costs was exceptionally close, with a three-way split among the Monetary Policy Committee (MPC) that sets interest rates. The division forced Governor Andrew Bailey to direct policymakers to vote twice for the first time since the Bank gained independence in 1997. Policymakers were divided amid signs that inflation is accelerating just as the economy is weakening. The Bank said faster-than-expected increases in the price of food would push the overall rate of inflation to a peak of 4pc in September, twice the Bank of England's 2pc target. Officials said supermarket price rises were being fuelled by government policy, with higher minimum wage, the Chancellor's tax raid and a net zero packaging levy all contributing. Responding to the Bank's third interest rate cut this year, Ms Reeves insisted Labour was investing in the economy to 'drive up wages and improve living standards across the UK'. However, a survey by the Bank suggested her inheritance tax raid and Labour's plan to overhaul workers' rights were having a chilling effect across the economy and causing firms to 'hold back or delay investment'. Sir Mel Stride, the shadow chancellor, said: 'Interest rates should be falling faster, but Labour's Jobs Tax and reckless borrowing have pushed inflation well above target.' Fears of a fresh tax raid in the autumn are mounting. Economists have warned that the Chancellor faces a black hole in the public finances of up to £50bn as she struggles to balance the books. Mr Bailey said the UK economy remained 'subdued' but cautioned interest rates must not 'cut too quickly or by too much' amid fears that inflation could spiral out of control. The Governor said: 'On the one hand you've got slightly higher inflation, on the other you've got a slightly weaker activity profile.' Deputy governor Clare Lombardelli added: 'It is a constellation that is challenging'. Officials said steep increases in the minimum wage and the Chancellor's £25bn National Insurance raid had already added between 1pc to 2pc to food prices, with further increases expected into next year. The British Retail Consortium (BRC) has warned that food inflation is likely to hit 6pc by the end of this year. In a blow to Ms Reeves's hopes for a further fall in borrowing costs, governor Andrew Bailey warned that policymakers may have to limit further rate cuts in order to 'squeeze' out the threat of higher inflation. He said: 'We've cut interest rates today, but it was a finely balanced decision. Interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.' The value of the pound rose against the dollar following the decision, while investors are no longer fully pricing in another rate cut this year. Mortgage costs could also rise in the coming days after swap rates that lenders use to price fixed-term loans former rate-setters warned that Britain was now in the grip of 'stagflation' - a toxic combination of stagnant growth and higher inflation. 'The UK can be said to have entered a stagflationary episode,' said Willem Buiter, a founding member of the Sentance, another former MPC member, said: 'It is quite appropriate to use the word stagflation.' Jonathan Haskel, a policymaker until last year, said he would not have cut rates. 'It is a pretty grim outlook,' he said. 'Activity is flat, and inflation is above target. It is hard to be optimistic.' Sources close to Ms Reeves insisted she was on the side of working people, a day after the Prime Minister refused to rule out an income tax hike to shore up the public finances. 'We froze fuel duty, increased the minimum wage, didn't increase National Insurance, VAT or income tax, boosted pay for nurses, armed forces and police, rolled out breakfast clubs for primary school kids, and since the election we have seen five interest cuts,' the source said. 06:58 PM BST Signing off... Thanks for joining as we have covered the Bank of England's interest rate decision today. To recap, the Bank cut interest rates on Thursday but four of its nine policymakers - worried about high inflation - voted to keep rates unchanged. This suggested the central bank's run of rate cuts might be nearing an end. Sterling rose after the news, which further pressured export-oriented companies. 05:48 PM BST Market underestimating future rate cuts, says economist The Bank of England cut rates faster than the market is predicting, a leading economist has claimed. Diana Iovanel, at Capital Economics, said: 'The surprisingly hawkish tone struck by the Bank of England today has increased the chances it will slow down the pace of rate cuts from one per quarter. 'But our view remains that Bank Rate will be cut further than investors anticipate... 'Our base case remains that the Bank of England will continue to cut Bank Rate by [a quarter of a percentage point] at every other meeting until it reaches 3pc next year, about [half a percentage point] further than is currently reflected in money markets. 'That's because we think inflation will be lower than the Bank forecasts, despite the unexpected rise in inflation in June. We judge it's only a matter of time before the weakness in employment leads to wage growth and inflation falling back to rates consistent with the BoE's target.' But Vivek Paul, at BlackRock Investment Institute, said: 'We see an economy that is starting to pick up but with persistent inflation pressure. 'That paves the way for a further [half a percentage points] of rate cuts by the end of next year, but likely not much more beyond 2026,' suggesting the Bank rate reaching 3.5pc. 05:40 PM BST Stocks mixed but pound up after Bank of England rate cut The FTSE 100 fell in London on Thursday, while the pound climbed, after the Bank of England lowered interest rates in a tight vote which saw hopes for further cuts this year pared. The quarter point cut taking the bank rate to 4pc from 4.25pc was widely expected. But the split among Monetary Policy Committee members proved surprising, requiring an unprecedented second round of voting. Five members of the nine-strong MPC, including Bank of England governor Andrew Bailey, voted for the quarter of a percentage points reduction. Mr Bailey was joined by Sarah Breeden, Swati Dhingra, Dave Ramsden and Alan Taylor. Four MPC members - Megan Greene, Clare Lombardelli, Catherine Mann and Huw Pill - voted to keep rates on hold. The Bank said Mr Taylor would have preferred to reduce bank rate by a heftier quarter of a percentage points but in a second round of voting eventually backed the quarter point cut. In response, shares extended early losses as markets repriced expectations for rate cuts in the rest of 2025. The FTSE 100 index closed down 0.7pc, at 9,100.77. The FTSE 250 ended 0.1pc higher, at 21,938.10, while the AIM All-Share finished down 0.1pc, at 763.51. Matthew Ryan at Ebury said the 'razor-thin' 5-4 vote has 'turned a few heads'. 'Sterling has posted modest gains, as investors slash bets in favour of additional cuts, with a November rate reduction now less than 50pc priced in by swap markets,' he said. Andrew Wishart at Berenberg felt the 'exceptionally tight vote and higher inflation forecast show that the central bank is preparing to pause its interest rate cutting cycle.' 05:15 PM BST Cost of UK government borrowing rises after Bank rate decision The yield on UK government bonds rose this afternoon after the Bank of England signalled concern over inflation among rate setters. Four of the BoE's nine policymakers voted to keep rates on hold, with the Monetary Policy Committee needing two votes for the first time in its history to settle on a quarter of percentage point rate cut. The Bank of England is being pulled in different directions as Britain's job market has weakened in recent months, but inflation is rising. The second vote was required after one policymaker voted for a larger half a percentage point cut but, with four voting to hold, more policymakers are prioritising the inflation side of that equation than investors had thought prior to the meeting. 'Essentially the committee collectively is more concerned with the pace of disinflation, and that resulted in less willingness to cut rates across members than we had believed,' said Philip Shaw, chief economist at Investec. 'We are still for now forecasting a [quarter point] cut to rates in November, but clearly we could be looking at another very finely balanced decision and the outturn will, of course, depend on the data between then and now.' Yields on British government bonds, or gilts, rose, and the rate-sensitive 2-year yield is at 3.884pc compared with 3.837pc this morning. The benchmark 10-year yield at one point rose to 4.597pc, from 4.534pc this morning. 04:53 PM BST Dollar rises on hopes for new Fed chairman The US dollar rose this afternoon after reports that Christopher Waller, a Federal Reserve governor, is emerging as a top candidate to serve as the central bank's chairman. The dollar index, which compares the American currency with leading rivals, is up around 0.2pc today. However, the dollar is down 0.6pc against the pound, on expectations that the Bank of England will now be more cautious over future interest rate cuts. Mr Trump has criticised current Fed chairman Jerome Powell, whose term will end in May next year, as being too slow to cut interest rates. Some investors are concerned that his replacement will not act independently of the Trump administration. That said, Mr Waller is respected in financial markets and central banking circles and his appointment would be positive for the US dollar, according to Karl Schamotta, chief market strategist at Corpay in Toronto. 'He is understood to be someone with an easing bias, but he has the credibility that could keep long-term [government bond] yields anchored and keep flows into the dollar well supported,' Mr Schamotta said. Mr Trump said on Tuesday he had narrowed his search for a new Fed chairman to four people including economic adviser Kevin Hassett, former Fed governor, and Trump supporter Kevin Warsh, plus two other people. Mr Trump did not name those people, but one is thought to be Mr Waller. 04:39 PM BST Doctor wage rises 'could push inflation above 4pc' The Bank of England is underestimating the effect that public sector wage rises - as junior doctors are demanding - on inflation, an economist has suggested. Prof Costas Milas, of the University of Liverpool Management School, said: 'There is a real risk the Bank of England is underestimating domestic pressures to inflation and therefore inflation might end up higher than 4pc later this year. 'According to today's Monetary Policy Report, the BoE continues to pay attention to private sector wages, when, in fact, as I have shown ... public sector wage growth drives private sector wage growth even higher. 'In fact, last year's public sector wage increases, including those for train drivers, have contributed to the latest inflation rise to 3.6 per cent. 'What does this mean? The Government should not agree to the wage demands of resident doctors (and nurses). These wage demands will create additional inflationary pressures by lifting private wages much higher than what the BoE currently estimates.' 04:24 PM BST Monetary Policy Committee never before had to go to second vote, says Bailey The Bank of England has never before had to hold a second vote on interest rates in order to get to a decision, its Governor has said. Andrew Bailey told Bloomberg TV: 'We actually never had to be in this situation of having to have two votes to produce the majority. Absolutely fine; we can do that. Not difficult.' He said: 'We've got risks on both sides. 'We were always expecting that we were going to see this rise in inflation. It's not a big one but we were expecting to see it. 'It's a little bit bigger than we thought it would be. So we have to be very focused on are there going to be consequentials from that. 'On the other hand, I think the labour market is softening, pay has come in a bit below where we thought it would be. That's the downside risk... 'We're balancing that: members [of the Monetary Policy Committee] take different positions and I always encourage that.' 04:13 PM BST The Government cannot take credit for cuts in interest rates The Bank of England's decision to trim its key interest rate by another quarter point this week was widely expected, but there is still plenty to write about. Unfortunately, little of this is good news, writes economist Julian Jessop. For a start, why on earth is the Monetary Policy Committee (MPC) still cutting rates when the Bank itself now expects CPI inflation to rise further, peaking at 4 per cent in September? This would be double the MPC's 2 per cent target, which is meant to be met 'at all times'. That is a reasonable question. Indeed, the MPC only voted in favour by the slimmest of margins, with four of the nine members preferring to leave interest rates on hold. Fortunately, the MPC's mandate provides some flexibility. The mandate allows the target to be overshot temporarily if there are good reasons to expect inflation to drop back to target soon, and if the costs of correcting the overshoot more quickly – in terms of lost output and jobs – would otherwise be too great. The recent pick-up in inflation partly reflects global factors which are outside the Bank's control. These include the impacts of higher prices for energy and agricultural commodities, which should drop out of the headline inflation rate next year. Nonetheless, the gap between inflation in the UK and the rest of Europe has widened noticeably since last October's Budget. Despite the same global pressures, inflation in the euro area has settled at around 2 per cent. The obvious culprit is the continued pass through of higher payroll costs following the large increases in employers' National Insurance contributions and in minimum wages. Continue reading Julian Jessop's commentary... 04:09 PM BST Market reaction 'doesn't surprise me', says Bailey The market's reaction to today interest rate cut 'doesn't surprise me', the Governor of the Bank of England has said. Andrew Bailey told Bloomberg TV: 'I think the voting is very good reflection of the finely balanced decision. 'My message to markets is don't read into it more than that.' Money markets have today lowered their bets of future rate cuts, with a lower than 50-50 probability of a cut in November. Mr Bailey said: 'The fact that [market] pricing is now more sort of 50-50 going forward, I think is a reflection of a fine balance. It doesn't surprise me.' 04:00 PM BST Pound rises as markets lower bets on further rate cuts The pound jumped 0.5pc against the euro and 0.4pc against the dollar after the Bank of England revealed its latest thinking on interest rates. Kathleen Brooks, research director at broker XTB, said: 'The tight vote split [at the Bank of England], with five members voting for a cut, while four members voted to remain on hold, is the most noteworthy part of today's decision. 'The Governor said that the decision was finely balanced and the hawkish camp ... seems to have gained a new member. Claire Lombardelli, who in the past was in the dovish camp, voted to keep rates on hold. 'This suggests that far from opening the door to more rate cuts as the economy stalls and the labour market weakens, the power balance has shifted to the hawks. 'The immediate aftermath of this meeting has seen a repricing of interest rate expectations for the UK. There is now less conviction that a second rate cut will come later this year... 'Looking ahead, interest rates are expected to be 3.5pc in a year's time, which is slightly higher than before the meeting.' 03:52 PM BST Rate cut too small, says ex-Lloyds Bank chief economist The quarter point cut today was 'too cautious' given the problems with the UK economy, the former chief economist at Lloyds Bank Commercial Banking has said. Trevor Williams, visiting professor at the University of Derby, said: 'The Bank of England's 0.25pc rate cut today was a step in the right direction, but too cautious given the scale of economic weakness. 'With GDP contracting, unemployment rising, and inflation set to peak soon, a 0.50pc cut would have sent a clearer signal of support to a spluttering economy. 'The risk now is that hesitation prolongs the downturn and undermines confidence among businesses and households. Monetary policy needs to be more assertive in the face of tightening fiscal conditions and falling external demand.' 03:42 PM BST Jobs market 'to flatline over next year' Private sector employment numbers will not grow at all over the next year, new figures released this afternoon suggest. The Decision Maker Panel (DMP), a survey of around 10,000 companies by the Bank of England and Nottingham and Stanford academics, has lowered the next 12 month's job growth from 1.1pc last month to zero. Rob Wood and Elliott Jordan-Doak, of Pantheon Macroeconomics, said: 'The DMP survey shows stubborn wage and price pressures despite falling employment, suggesting that the MPC was right today to note that structural changes and supply weakness mean rate cuts have to be gradual and cautious. We remain comfortable assuming no more rate cuts this year. 'The DMP reports employment falling 0.6pc year-over-year, the weakest since July 2021, and expected job growth over the next year falling back to 0.0pc, from 1.1pc in June.' The survey also shows companies believe they will raise their prices by 3.9pc over the year from July, up from 3.7pc in June. 03:28 PM BST Rate cut is 'pre-emptive strike' as Britain braces for a Reeves recession The Bank of England's rate cut is a 'pre-emptive strike' before Rachel Reeves raises taxes and the economy splutters further, an investment manager has suggested. Nicholas Hyett, of Wealth Club, said: 'The Bank's Monetary Policy Committee has launched a pre-emptive strike on any economic downturn later in the year. 'It remains unsaid ... but the increasing likelihood of tax hikes and/or spending cuts at the Autumn Budget has also probably played a part in this 'finely balanced' decision. 'Both consumers and companies could see their pockets squeezed by the taxman, and that would have knock-on effects for economic growth. While inflation is expected to rise a bit in September, the Bank believes it will fall back towards the 2pc target from there. That's opened up the space for today's pre-emptive action. 'The market seems to be suggesting there could be another cut later this year – and with one member of the MPC already arguing in favour of a move to 3.75pc you can see why. 'It feels like we're entering a wait and see phase. Does this rate cut give the economy a little bit of extra umph it badly needs, or will the Bank need to act again come the Budget? Time will tell.' 03:14 PM BST Labour warned not to 'fan flames of food inflation' The Government has been warned not to 'fan the flames of food inflation' with further tax rises this autumn amid growing concern over higher prices for shoppers, Hannah Boland reports. Helen Dickinson, the chief executive of the British Retail Consortium, said the Bank of England report 'outlines how the last Budget continues to push up food prices', with retailers having been struck by £7bn of extra costs this year. She said: 'Food prices have already been climbing steadily, and the BRC has warned this is only the beginning. If the Autumn Budget once again lands on the shoulders of retailers, then it will only serve to fan the flames of food inflation – with poorer families being hit the hardest by the Treasury's decisions.' Ms Dicksinson warned that retailers were 'doing everything they can to shield their customers from rising prices, [but] their ability to absorb further costs is extremely limited'. It comes amid growing fears over a looming business rate shake-up, which would hit larger supermarkets with higher costs. Ms Dickinson said it would be 'ordinary households who suffer the most'. 03:00 PM BST Investors pare back bets on a rate cut this year Traders in financial markets have cut back bets on another interest rate cut this year, after the Bank of England's Governor, Andrew Bailey, said he has no plans to 'cut too quickly or by too much', Tim Wallace writes. Data on interest rate probabilities suggests there is a 45pc chance of a rate cut in November. Before today's decision to cut rates from 4.25pc to 4pc, markets had fully priced in another cut to 3.75pc by the end of the year. But now the 'implied rate' in markets for December's MPC meeting is 3.78pc, indicating traders are no longer completely certain Mr Bailey and his colleagues will be able to reduce borrowing costs further. 02:29 PM BST UK's economic pain has been 'self-inflicted' With public finances deteriorating, significant fresh tax rises in the autumn now look almost certain. The Bank's analysis suggests Reeves and Labour must share the lion's share of the blame, The Telegraph's deputy economics editor Tim Wallace writes. The Chancellor's tax raid last year has not only undermined the jobs market and economic growth, it has also pushed up prices – particularly in supermarkets. That has put the fear of God into the Bank of England, which is increasingly concerned as inflation moves further and further above its 2pc target. It stood at 3.6pc in June, up from 3.4pc a year earlier. Much of the rise has come in the form of higher energy bills and food prices. These are both unavoidable, as all households must pay for food and fuel. Energy prices are largely determined by international markets but food inflation being fuelled by domestic factors – prices are rising faster in Britain than on the Continent. Which is is where Reeves comes in: increases to taxes and wages announced in last year's Budget are feeding through into prices on shelves. 'A relatively high proportion of staff in [food manufacturing and retail] are paid at or close to the National Living Wage, which increased by 6.7pc in April,' the Bank notes. 'Furthermore, the overall labour costs of supermarkets are likely to have been disproportionately affected by the lower threshold at which employers start paying NICs [National Insurance contributions], in part because a relatively high proportion of supermarket staff is employed part-time.' Read Tim's full analysis here 02:09 PM BST What does the Bank of England decision mean for mortgages? While the vast majority of mortgage-holders are on a fixed rate deal, today's decision will have an impact on homeowners on base-rate tracker mortgages and may impact those who are on a standard variable rate. There are 591,000 homeowners in the UK who are on a tracker mortgage, with payments that follow the Bank of England's base rate. UK Finance calculates that a typical customer will see their payments fall by £28.97 per month. Those on a standard variable rate could see their rates change as well. UK Finance believes this will result in a saving of around £13.87 per month, providing their lender passes on the rate. Savers often end up on a standard variable rate when their original mortgage deal comes to an end. Approximately 900,000 fixed mortgage deals are expected to come to an end over the second half of this year, according to UK Finance. Those who locked in fix-year deals during the pandemic when interest rates were near record-lows, could expect to see a big jump in their monthly payments. You can check how much the interest rate changes will cost you with Telegraph Money's calculator 01:49 PM BST Rate cut in September 'optically challenging', says JP Morgan An interest rate cut in September would be 'optically challenging' after the Bank of England's exceedingly cautious decision to trim the base rate by a quarter of a percentage point, Zara Nokes of JP Morgan has said. Anything but a [quarter of a percentage point] rate cut from the Bank of England today would have been a huge surprise. The labour market is quite clearly deteriorating and nervousness about potential tax rises in the autumn will only add to growth headwinds. 01:29 PM BST 'Decent chance' interest rates will not fall again this year Interest rates may not be cut again this year, City analysts are warning, after the Bank of England's extremely 'razor-thin' decision to trim the base rate to 4pc earlier today. George Brown, a senior economist at Schroders, said he believed 'there is a decent chance rates will not fall below the current 4pc rate this year', Bloomberg reported. Sanjay Raja, Deutsche Bank's chief UK economist, said the 'divisions' within the Bank of England and its 'historic' re-run vote would increase uncertainty. He said: 'Markets have pushed back expectations for further rate cuts this year. And uncertainty on the policy path ahead has risen even further.' Matthew Ryan, head of market strategy at Ebury, said: 'Market participants had braced for no more than a couple of dissenters in favour of no change, and it's safe to say that the razor-thin 5-4 vote has turned a few heads. 'The bank's remarks also hint at little rush to lower rates again.' 01:22 PM BST What you make of the Bank of England's decision today 01:09 PM BST Jerome Powell man of 'utmost integrity', Andrew Bailey says, amid pressure on Fed chairman Andrew Bailey has said he believes Jerome Powell, the under-fire chairman of the Federal Reserve, is a man of 'utmost integrity' who he 'respects very much'. The Governor the Bank of England refused to comment on attacks on the Fed chairman from President Trump, who has railed against the US central banker and toyed with the possibility of firing him. Mr Trump has said it is 'highly unlikely' he would sack Mr Powell, but has lambasted him as a 'knucklehead' and 'stupid'. He said in April that Mr Powell's 'termination cannot come fast enough'. Mr Bailey said he could not comment on 'events in the US' or 'policy of the US administration'. He added: 'I will say [Mr Powell] is a man of utmost integrity.' 12:54 PM BST UK economic growth 'not something to celebrate', MPC member says The level of growth in the UK economic is 'not something you'd hugely celebrate', a member of the Bank's Monetary Policy Committee has said. Clare Lombardelli said growth in the UK economy remained subdued, a press conference following today's rates decision. Asked by reporters about recession concerns, Andrew Bailey said his vote to cut interest rates was 'not motivated by concerns about a risk of recession'. He said: 'My view on the path of activity has changed very little since May.' The Telegraph's Szu Ping Chan, meanwhile, asks whether working people are 'under pressure' in the current economic climate. Mr Bailey said it had become apparent since the Bank's last meeting that 'pay has come in lower than we thought it would be'. 12:42 PM BST Interest rates must not be cut 'too quickly', Andrew Bailey says Andrew Bailey has said the Bank of England must not 'cut too quickly or by too much' as he warned growth in the UK economy remains 'subdued'. In a press conference, Mr Bailey said the Bank believed the that inflation would generally 'continued to abate' despite the expectations it will hit 4pc in September and take longer to fall. He added that it would take 'somewhat longer for inflation to return to target' - the Bank of England has a mandate to keep inflation at around 2pc. He said there were a number of 'domestically administered' factors that had contributed to rising inflation, such as packaging prices. Mr Bailey voted in favour of the 25 basis point cut to interest rates earlier today. 12:30 PM BST Higher taxes and red tape driving inflation, Bank says The Bank of England has said supermarkets and suppliers were dealing with the double blow of higher job taxes and a looming levy to reduce packaging waste, The Telegraph's economics editor Szu Ping Chan reports. 'Material increases in labour costs are likely to have pushed up food prices,' the Bank warned in its latest evaluation of the economy. It said steep increases in the minimum wage and the Chancellor's £25bn national insurance raid had already added between 1pc to 2pc to food prices, with further increases expected into next year. 'Labour costs are expected to continue to push up food prices in the second half of the year,' with the Bank expecting price rises to peak at 5.5pc. The Bank also upgraded its inflation forecasts for the next three years and warned that overall price rises would not get back to target until 2027. Governor Andrew Bailey also warned that policymakers may have to limit further rate cuts in order to 'squeeze' out the threat of higher inflation. He said: 'We've cut interest rates today, but it was a finely balanced decision. Interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.' The Bank also calculated that a net zero packaging tax that will pass the financial responsibility for recycling packaging from councils to producers would also add roughly half a percent to food prices if fully passed on to consumers. Producers will start receiving their first Extended Producer Responsibility (EPR) bills in October, though the Bank said there was already evidence that suppliers were pushing up prices. 12:27 PM BST Rate cut down to economic 'stability', says Reeves Rachel Reeves has said falling interest rates are down to Labour's economic 'stability', despite concerns from the Bank of England that inflation is again climbing. The Chancellor said: 'This fifth interest rate cut since the election is welcome news, helping bring down the cost of mortgages and loans for families and businesses. However, Mel Stride, the shadow Chancellor, warned Labour's decisions threatened to 'damage' the economy, adding that interest rates are 'only coming down to support the weak economy Rachel Reeves has created'. 12:21 PM BST FTSE 100 drops sharply on inflation warning The UK's blue chip index is trading down 0.78pc so far today after a sharp drop at midday following the Bank of England's warning that inflation could continue to climb. The FTSE 100 was down at around 9,092 as of 12.20pm as investors digested the Bank of England's split decision on interest rates. 12:17 PM BST Sterling rises against the dollar on back of split vote The pound climbed 0.4pc against the dollar above $1.34 as the Bank of England agreed to lower interest rates following an unprecedented split vote. Rate-setters were forced to re-run the vote after failing to come to decision on rates in their first poll. One member, Alan Taylor, voted in favour of a 0.5pc rate drop, before switching his vote to a 0.25pc drop. The pound also climbed 0.45pc against the Euro in the wake of the decision. Meanwhile, 10-year gilt yields were 5 basis points higher at 4.58pc. 12:11 PM BST Inflation expected to climb to 4pc in September The Bank of England expects prices to continue to rise with inflation expected to peak in September even as it agreed to cut interest rates to 4pc. The bank said inflation had increased in recent months owing to rising energy and food prices and high wage growth and was expected to reach a high point next month. The Committee said: 'CPI inflation is forecast to increase slightly further to peak at 4.0pc in September. Inflation is expected to fall back thereafter towards the 2pc target, although the Committee remains alert to the risk that this temporary increase in inflation could put additional upward pressure on the wage and price-setting process. 'Overall, the MPC judges that the upside risks around medium-term inflationary pressures have moved slightly higher since May.' 12:00 PM BST Bank of England cuts interest rates to 4pc The Bank of England has cut interest rates to their lowest level in more than two years as policymakers seek to revive Britain's sluggish economy. Policymakers on the Bank's Monetary Policy Committee (MPC) cut the base rate from 4.25pc to 4pc on Thursday in a move that is expected to lower borrowing costs for mortgage holders. It is the MPC's fifth cut since last August and rates are now at their lowest level since March 2023. The rate cut comes amid mounting pressure on Rachel Reeves after economists said the black hole in Britain's public finances had swelled to as much as £50bn. The National Institute of Economic and Social Research said this week the Chancellor must raise taxes immediately to plug the gap and restore her fiscal headroom. Andrew Bailey, the Governor of the Bank of England, said: 'We've cut interest rates today, but it was a finely balanced decision. Interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.' 11:34 AM BST Pound rises against dollar ahead of Bank decision The pound has edged higher against the dollar ahead of today's decision by the Monetary Policy Committee, with one pound worth a little above $1.33. Sterling has been on a winning run against the Greenback and is up just over 1pc over the past week. 11:30 AM BST German industrial production slumps to lowest level since pandemic Germany's industrial output fell in June to its lowest point since the coronavirus pandemic with a month-on-month drop of 1.9pc. Production is now at its weakest since May 2020 when the pandemic prompted a mass shutdown of factories and industry amid lockdowns in Europe. Germany's statistics agency said the fall was 'mainly attributable to the decrease seen in the manufacture of machinery and equipment' while 'production in energy-intensive industrial branches declined by 2.2pc'. Julian Jessop, an independent economist, warned there could be read-across the UK's own industrial productivity. 'Industrial production fell sharply in June, with a big downward revision to May, as the boost from frontrunning to beat US tariffs went into reverse (also a big downside risk to the UK data, out next week),' he said. 11:10 AM BST Rate cut now would be a mistake, economists warn While the Bank of England is widely expected to keep cutting the base rate today, some economists have urged caution as inflation ticks up. The latest inflation data from the Office for National Statistics showed the Consumer Price Index rising by 3.6pc in June, an increase on 3.4pc in May. Andrew Sentance, the former director of economic affairs at the Confederation of British Industry, said the Bank of England would be moving against its own mandate - to keep inflation around 2pc - if it voted for rate cuts. He added: 'They may well be raising rates again by the end of the year.' Meanwhile, independent economist Shaun Richards said: 'I expect the Bank of England to cut interest rates to 4% and should it do so with inflation above 3pc it will be a mistake.' 10:39 AM BST Bank of England committee expected to be 'evenly' split The Bank of England's rate-setting committee is expected to be split when it confirms its interest rate decision at midday given the slim 'margins for error' in the UK's economic data, a Barclays analyst has said. Will Hobbs, head of multi-asset wealth at Barclays private bank, said he had a more 'optimistic tilt' on the current economic climate despite concerns that growth has stalled. Mr Hobbs said:'Given the current margins for error in the UK's economic dataset, it remains possible to tell almost any story you want on the UK's economic outlook. Our optimistic tilt rests in part on the strong aggregate household balance sheet and rising real incomes, both of which provide a buffer against broader uncertainty. 'Of course, there are multiple factors to consider, and we remain mindful of both upside and downside risks. We, like the consensus, expect the Bank of England to cut rates, likely following a fairly even vote split. 'We would resist overuse of the term 'stagflation' to describe the UK's position. The misery indices (unemployment plus inflation), looks unremarkable today relative to the experience of the last century.' Analysts will be closely watching how the Bank of England's Monetary Policy Committee is split, and whether any ratesetters continue to push for a larger 50 basis point cut to rates. The last meeting of the MPC in June ended with a 6 to 3 vote in favour of keeping the rate at 4.25pc. 10:13 AM BST Missed mortgage payments fall ahead of rates decision Missed mortgage payments fell over the last three months after years of financial pressure on households from inflation and the cost-of living crisis. Data from Pepper Advantage, a credit management technology business, found the rate of mortgage arrears fell by 4.4pc . The firm tracks data on 100,000 residential mortgages. Direct debit rejections also fell by 5.1pc. Aaron Milburn, managing director at Pepper Advantage, said: 'The significant drop in residential mortgage arrears, alongside the simultaneous decline across all UK regions, is a promising sign that some household financial pressures may be easing after years of inflation and rising living costs. This marks the most positive quarterly movement we have observed since this report began. 'It is important to remember that any recovery remains fragile. Unexpected economic shocks or hits to household budgets could quickly reverse this improvement.' 09:31 AM BST 'Sluggish economy' may prompt rate cut The UK's 'sluggish' economic growth may force the Bank of England to cut rates later today, according to analysts at Hargreaves Lansdown. Susannah Streeter, Hargreaves Lansdown's head of money and markets, said: Investors are primed for an interest rate cut from the Bank of England later today, given the highly sluggish nature of the economy, and the rising unemployment rate. 09:00 AM BST Rate cut would be 'sign of weakness', says shadow business secretary A rate cut by the Bank of England later today would be a 'sign of weakness not strength', the shadow business secretary Andrew Griffith has claimed. 'The Bank sees what businesses see – an economy sinking to its knees with falling employment, low demand and a 'slo-mo' house price crash,' he said in a post on X. ' Instead of smug soundbites from Reeves, we need spending cuts now.' Cutting interest rates can help revive economic growth by easing borrowing costs for consumers and businesses. While interest rate cuts have been widely forecast by the City, some analysts have said the Bank of England will need to go further and faster as the UK economy stutters. 'While inflation has been surprisingly firm, we see good reasons to expect a slowdown. Regulatory price hikes, including in employment taxes, have pushed prices up, but wage growth is softening and the labour market is weakening,' Peder Beck-Friis, an economist at Pimco, said last week. 08:40 AM BST Takeaway sales surge at Deliveroo Take-out sales have jumped at Deliveroo even as it prepares to quit the London Stock Market in a deal with US giant Doordash. Deliveroo reported UK sales value growth of 10pc with order numbers up 8pc. The business reported adjusted profits of £96m, up 46pc. It comes as Deliveroo prepares to complete a £2.9bn deal with Doordash, a US food delivery giant, which is in the process of buying out its smaller London-listed rival. The deal is expected to close later this year. Will Shu, Deliveroo's founder and chief executive, said:'I'm excited for what the partnership with Doordash can bring in the future. They will be an excellent partner for everyone at the company, as well as for our consumers, merchant partners and riders.' 08:19 AM BST London property prices up 0.5pc compared to last year House prices in London increased by 0.5pc in July, now averaging £539,914, according to Halifax's data. Northern Ireland showed the strongest house price growth with average prices increasing by 9.3pc over the past year. The typical home now costs £214,832. House prices increased by 4.7pc annually in Scotland while property in Wales climbed by 2.7pc. In England, the North West and Yorkshire and the Humber saw the steepest price increases, up 4pc over the year. The reported price increase in London comes despite concerns that property prices in some prime locations in the capital are set to fall. Separate data from Rightmove found asking prices in inner London fell by 2.1pc in July compared to the month before, while overall selling prices in the capital dropped by 1.5pc month-over-month. 08:08 AM BST FTSE 100 opens down ahead of rates decision The blue chip index opened 0.2pc in the red after hitting record highs earlier this week ahead of the Bank of England's decision on interest rates later today. The FTSE 250 was roughly flat. 08:04 AM BST North Sea giant driven to loss by Labour's windfall tax One of the UK's largest oil and gas companies has seen a $1.6bn profit shrivel to a $174m loss thanks to Labour's windfall tax on fossil fuel producers. Habour Energy reported an increase in its tax expenses to $1.8bn in the first half of the year, up from $335m compared to the same period a year earlier. Its reported effective tax rate was 111pc, Harbour Energy said, due to the impact of the Energy Profits Levy introduced by the Conservatives in response to high oil and gas prices, but extended under Ed Miliband until 2030 07:48 AM BST Bank of England expected to cut interest rates today The boost to house prices reported this morning comes as the Bank of England's Monetary Policy Committee (MPC) prepares to reveal its latest interest rates decision at noon, Emma Taggart writes. The MPC is expected to cut rates by 25 basis points from 4.25pc to 4.00pc. A cut to the bank rate will be a boost for prospective buyers hoping for a reduction in borrowing costs. Markets have forecast that the Bank's MPC will reduce the rate to 3.75pc by the end of 2025. However, stubborn inflation is causing a headache for Threadneedle Street. Figures from the Office for National Statistics showed that inflation crept up to 3.6pc in June, well above the Bank's 2pc target. 07:43 AM BST House prices expected to rise for the rest of the year Good morning. House prices have climbed at their fastest rate since the start of the year, according to Halifax's house price index, providing welcome relief to sellers as improving mortgage rates help improve buyers' borrowing power. Amanda Bryden, head of mortgages, Halifax, said: 'UK house prices rose in July, up by 0.4pc (£1,080 in cash terms), the biggest monthly increase since the start of this year. The average house price is now £298,237, 2.4pc higher than a year ago. 'Challenges remain for those looking to move up or onto the property ladder. But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving. 'Combined with the more flexible affordability assessments now in place, the result is a housing market that continues to show resilience, with activity levels holding up well. 'We expect house prices to follow a steady path of modest gains through the rest of the year.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 hours ago
- Yahoo
Homelessness Minister Rushanara Ali quits over rent hike claims
Rushanara Ali has resigned as homelessness minister, Downing Street has confirmed. The move comes after she was accused of hypocrisy over the way she handled rent increases on a house she owns in east London. There were calls for her to step down from homelessness charities and opposition politicians. In a letter to the prime minister she said "at all times I have followed all relevant legal requirements" but that remaining in the role would be "a distraction from the ambitious work of this government". The row was sparked after Ali ended her tenants' fixed term contract in order to sell up, but then re-listed the house for rent at a higher price within six months, which is something she is currently trying to outlaw under the Renters' Rights Bill. In a story first broken by the the i Paper, a former tenant said she was sent an email in November giving four months' notice the lease would not be renewed. She said shortly after she and the three other tenants moved out, the house in east London was re-listed at a rent £700 a month higher. In a letter to the prime minister, Ali wrote: "It is with a heavy heart that I offer you my resignation as a minister." Insisting that "at all times I have followed all relevant legal requirements" she added: "I believe I took my responsibilities and duties seriously, and the facts demonstrate this. "However, it is clear that continuing in my role will be a distraction from the ambitious work of the government. "I have therefore decided to resign from my ministerial position." Responding to her resignation, Prime Minister Sir Keir Starmer thanked her for her work, which he called "diligent". What are the rules about renting and eviction, and how are they changing? London's 'spiralling' housing crisis in numbers The PM praised her work to repeal the Vagrancy Act and added: "I know you will continue to support the government from the backbenches and represent the best interests of your constituents in Bethnal Green and Stepney." A source close to Ali said the previous fixed-term contract had been ended because the house was being put up for sale and the tenants had been told they could stay on a rolling basis while the house was on the market, but they had chosen to go. The house was put on the market in November 2024 with an asking price of £914,995 but was reduced in February by £20,000 and the i Paper said it was only re-listed as a rental because it had not sold. The government's Renters' Rights Bill is in its final stages in Parliament, and will ban landlords re-listing a property for rent, if they have ended a tenancy in order to sell, for six months. Landlords must also give four months' notice to tenants when the legislation is passed, which is not expected to be until at least next year. London Renters Union spokesperson Siân Smith said Ali's actions were "indefensible" and she "must step down" due to a "clear conflict of interest" with the Bill in its final stages. Tory Party chairman Kevin Hollinrake was among other opposition politicians accusing Ali of "staggering hypocrisy" over the handling of the property. After she quit, he added: "It is right that Rushanara Ali has now quit the Government following our calls for her to go. "Keir Starmer promised a government of integrity but has instead presided over a government of hypocrisy and self-service." Also welcoming her resignation, a Liberal Democrat spokesperson said: "Rushanara Ali fundamentally misunderstood her role. "Her job was to tackle homelessness, not to increase it. "At a time of widespread political disillusionment, her actions were staggeringly irresponsible and only added insult to injury after years of delay for renters' rights reform under the Conservatives." This is not the first time Ali has been criticised. She had to give up part of her ministerial portfolio last year, when she attended a conference linked to the parent company of one of the firms heavily criticised in the recent Grenfell inquiry. Giving up her duties managing building safety and the government's response to the Grenfell Tower fire, she said she was relinquishing her building safety brief because "perception matters". Sign up for our Politics Essential newsletter to keep up with the inner workings of Westminster and beyond.
