Federal Reserve Hold Rates

At 1300 today, markets will turn their attention to Threadneedle Street, where the Monetary Policy Committee are expected to hold the Bank of England’s benchmark policy rate at 5.25%. This would mark the second hold following fourteen consecutive rate hikes seen since the Bank of England stated their tightening cycle in Q4 2021.

During the last MPC meeting, five members voted in favour of maintaining the benchmark policy rate against four who voted to raise rates 25bps. Since then, on 18 October, data from the ONS indicated that headline inflation remained unchanged from last month’s print, coming in at 6.7%. This surpassed expectations of 6.5% as fuel prices and the cost of hotel stays rose, offsetting the slowdown in food and drink prices and served as further indication that the Bank of England continue to face headwinds as they try to get inflation back down to their 2% target.

Rishi Sunak’s AI summit moves into day two today, but the big headline from day one wasn’t from the summit itself, rather from what US Vice President Kamala Harris had to say from the US Embassy in London, prior to the conference starting. Ms Harris, apparently not one to arrive at a party empty handed, came with an executive order from the President which has set a broad range of requirements upon AI developers, including:  companies are required to share safety test results with the government, protecting consumer privacy by creating guidelines that agencies can use to assess privacy techniques that companies use within AI. Stopping algorithms discriminating and creating best practices and appropriate roles for AI within the justice, healthcare and education sectors.  The message from MS Harris was also a bit of a swipe on Rishi’s conference, which is focussed around thinking around the unrealised threats of AI, whereas the VP has said “let us be clear, there are additional threats that are also causing harm, and which to many people also feel existential”. So not the best start for the PM, who wants the UK to be a clear leader in AI, but is now immediately behind the US on legislation around the technology, thanks to the stroke of a pen from Joe Biden! Politico has more, click here to read.