Cuts in interest rate are ‘in play’
INTEREST rate cuts this year are “in play” amid signs that the risk of wage-price spiral has diminished, the Bank of England governor has suggested.
Andrew Bailey said he is increasingly confident that inflation is heading towards the Bank’s target in an interview with the Financial Times.
He signalled that markets were right to expect more than one interest rate cut this year and stressed how small the technical recession last year had been.
Mr Bailey told the paper yesterday: “It’s like the Sherlock Holmes dog that doesn’t bark.
“If the second-round effects don’t come through that’s good because monetary policy has done its job.
“We have an increasingly positive story to tell on that. The global shocks are unwinding and we are not seeing a lot of sticky persistence (in inflation) coming through at the moment.”
He said that rate cuts are “in play” at future meetings of the Bank’s Monetary Police Committee.
Amid mounting hopes of cuts on the horizon, the FTSE 100 edged closer to an all-time high on Friday.
The index of the UK’s top 100 stocks hit highs of 7,960 during the day, but did not manage to surpass the 8,000 mark.
Kathleen Brooks, research director at trading platform XTB, said: “The market rally this week was driven by news that central banks have shifted to a more dovish stance.
“At the Bank of England, Catherine Mann and Jonathan Haskel, the two remaining hawks at the Bank who had been voting for more rate hikes, changed their tune and opted for rates to remain on hold this month.
“The dovish shift in the Bank vote split is seen as a major step towards cutting rates later this year. The market now thinks that the first rate cut will come in June, and that there will be three rate cuts this year.”
Last week, for the first time since September 2021, no-one on the nine-person decisionmaking body that sets interest rates voted for an increase.
Eight members of the Monetary Policy Committee (MPC) said rates should be kept at the current 5.25% level at least until it meets next time. While a vote to keep rates steady had been widely expected, in a surprise move two members who last month voted to keep hiking rates changed their minds.
A
MAN is raging over the price he paid for a novelty number plate.
Kevin James, of Llanharan in Rhondda Cynon Taf, spent £15,132 on a plate that reads “MA55 AGE” – only to be told he had overpaid by about £10,000.
The semi-retired roofing surveyor, 60, bought the plate in 2015 in a nod to the profession of his partner Michaela, who was a masseuse.
He claims Regtransfers, the supplier he bought it through, told him the plate could be worth as much as £30,000 in the coming years.
But when he tried to sell the plate for that figure, there was no interest and a dealer gave him a valuation of £5,000 to £6,000.
Mr James had invested a large portion of the inheritance following his father’s death into the plate.
He said: “I tied all my money into that thinking I would double my money.
“There are a lot of vulnerable people out there looking at that website and I want the whole world to know it’s unfair what Regtransfers are doing. They’ve no intention of giving me my money back. They say the deal’s done.
“It’s affected my life and my lifestyle. I could have invested that money in a savings account and got 5% interest.
“I have ended up losing my home, moving in with a friend, and my lifestyle is nowhere near what it was before.”
Mr James had been thinking of putting the plate on a motor home and moving to Bournemouth with Michaela but she died of coronavirus in 2021.
“This MA55 AGE plate is a sad memory and a lot of bad luck,” he said. “The worst thing I ever did was invest in this.”
The plate had been sold at a DVLA auction in 2006 for £4,200.
A Regtransfers spokesman said: “[The registration] was never owned by Regtransfers but was sold on behalf of a third party.
“In such cases the owner decides the sale price, not the broker who facilitates the transaction.”
Mr James says he paid the £15,132 figure after “knocking down” a sales rep from an £18,000 asking price.
He regrets not getting an independent valuation at the time.
For a couple of years he advertised it online with a £30,000 asking price, and wondered why he received zero interest, before eventually getting the valuation that left him horrified.
After the investment went wrong, Mr James moved out of his rented home in Dinas Powys and into a housing association property in Llanharan.
Mr James, who is battling cancer of the skull, is struggling with his health and relying on benefits to survive. The plate itself is not on a vehicle. “It’s in a lockup of mine with all my house contents since 2018 when I lost my home,” he said.
Mr James says he has obtained independent valuations of other number plates offered by Regtransfers, including “10 KJ” and “6 KJ”, which the supplier is offering for £55,000 and £70,000 respectively.
According to the dealer who gave Mr James a valuation, they are worth £14,000 and £30,000 respectively.
“Regtransfers are overvaluing these plates,” said Mr James. “It’s not a good investment.”
A Regtransfers spokesman said: “We do not give financial or investment advice. We do, however, provide general information about the prices that the sales of similar numbers have achieved either in general terms or where specific information is already in the public domain.
“This enables potential purchasers to judge whether they see a potential return if they buy for investment.
“We also publish articles promoting the investment potential of private plates. These articles are datadriven and evidence-based.
“We often quote sources outside our industry who have objectively observed the increasing value of good examples.
“In this case, while we can’t discuss specific details, prices for sales at DVLA auction are in the public domain and are visible on DVLA’s website.
“With that information available a purchaser can make an informed decision about subsequently buying at a higher price.
“Even in cases where we do sell registrations from our own stock we simply engage in commerce: the purchasing of stock at one price and selling at, hopefully, a higher price.
“That is how all retail businesses work, including your local supermarket.
“However, as we have pointed out, the registration number you mention was not owned by us and the price was not set by us. Each dealer makes their own valuations according to their experience.
“We have no comment to make regarding estimates offered by other companies.”