(Bloomberg) --
Hello from London, where as one of our senior editors put it, a recession is fine as long as your pint is cheaper.
Chancellor Jeremy Hunt told Sky News he’s comfortable with the Bank of England potentially triggering a recession in its fight against inflation, calling it “a source of instability.” Hawkish former BOE rate-setters warned that interest rates will need to soar as high as 6%, a level the bank has identified as painful for households and businesses.
The BOE is to blame for failing to get inflation under control and the subsequent surge in government bond yields, Bloomberg Opinion’s Marcus Ashworth writes. And the pound’s rebound is also in jeopardy thanks to inflation, according to BlueBay Asset Management. Still, the IMF said this week the UK will avoid a recession, putting it ahead of Germany.
Stubbornly high inflation is causing headaches for Prime Minister Rishi Sunak, mostly from within his own party. Conservative ministers and advisers said they fear the Tory savaging in recent local elections shows the post-Brexit “realignment” of voters in England is coming back to bite them.
Sunak’s bid to avoid a Labour landslide could be helped by forecasts that the number of foreigners arriving in the country is likely to fall. Despite the record migration figures reported this week, arrivals from the EU last year were about half the level seen in 2019. Brexit is partly to blame, but economies from Poland to Portugal are also generating more jobs and better wages than Britain.
The premier is also being called on to apologize for the UK’s past treatment of gay and trans service members, according to a government-commissioned review that details a “culture of homophobia” that pervaded the British military for decades. Some gay British soldiers were subjected to electric shock treatment in an effort to “cure” them of their homosexuality, according to the investigation, Ellen Milligan reports.
Three years after George Floyd’s murder in the US sparked global protests, Black professionals in the City of London are still waiting for change. Some told Olivia Konotey-Ahulu of waning momentum as attention is diverted elsewhere amid a series of crises.
London’s oldest law firms are offering their employees shorter office hours as a way to compete with US firms on pay.
Finally, the third bank holiday weekend of the month is bringing sunshine, but also travel woes. As soon as British Airways resumed its normal schedule after two days of cancellations, electronic gates for passport control went down around the UK. With three more days of train strikes planned during next week’s half-term holidays, you might be better off retreating to your local pub or park to enjoy that pint.