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Thursday's Business and Politics round-up

07 Nov 2019

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Good morning!

The Bank of England should leave interest rates on hold today and resist the temptation to tinker until the UK has its general election and is out of the EU, according to City economists.

CityAM’s shadow monetary policy committee has voted by eight votes to one to keep the main interest rate on hold at 0.75%. The prevailing view was that politics is too much in flux to make any changes based on reliable expectations.. 

IoD chief economist Tej Parikh advocated a hold, arguing “With the upcoming election largely making calculations about Brexit and the future path of the economy moot, it’s best to hold interest rates for now”. 

The morning's top stories, rounded up for your convenience. 

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The Disappearing Man

Tom Watson has announced he is quitting politics, confirming he will stand down as an MP and as Labour’s deputy leader at the forthcoming general election. He has been MP for West Bromwich East since 2001 and deputy leader since 2015. 

In a letter to leader Jeremy Corbyn, he said “The last few years have been among the most transformational of my personal life, second only to becoming a proud father […] I’ve become healthy for the first time, and I intend to continue with this work for years to come”.

Watson also said “our many shared interests are less well known than our political differences” and added he was resigning for personal reasons. In response, a letter from Corbyn said he was “proud and glad” to have worked with Watson. 

It is reported that according to Labour insiders Watson could be followed by other centrist figures within the parliamentary party. One official close to the shadow cabinet said more moderates could resign before the general election next month. 

Watson was elected deputy leader at the same time as Corbyn became leader four years ago. He is an avid supporter of Britain staying in the EU and has repeatedly called for a second referendum. He was almost ousted by Corbyn allies at the party’s conference in September. 

Blueprint for Britain 

The Conservatives and Labour are set to unveil their economic policies today, in the second day of the official election campaign.

The opposition has pledged an “irreversible shift” of investment and power to working people outside of the south-east of England. This includes £150 billion for hospitals, housing and schools in addition to the existing spending plans paid for through borrowing. 

Shadow Chancellor John McDonnell will deliver a speech from Liverpool committing to "investment on a scale never seen before in this country and certainly never seen before in the north and outside of London and the south-east".

But Chancellor Sajid Javid will say in Manchester later today that Labour’s economic policies are “fantasy economics” and Corbyn and McDonnell are “like the anti-vaxxers of economic policy”. Javid will outline plans for spending on infrastructure, education and technology. 

Javid is also expected to argue that delivering Brexit is the most important step to “unleash Britain’s potential”. He will say Labour’s plans to hold two referendums in 2020 would result in “leaving business facing even more uncertainty”. 

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Euan Holmes, Press Officer

020 7451 3280

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