Merryn Talks Money Rate Cuts, Fiscal Resets, and AI Reality Checks
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Nov 7, 2025 Hosts dive into the Bank of England's surprising rate decision, exploring the implications of a potential cut by year-end. They discuss Rachel Reeves's fiscal reset and her commitment to combating inflation without raising taxes. A critical look at the AI boom raises questions about its sustainability and monetization challenges. The conversation touches on how short-term political maneuvers complicate long-term fiscal policy, while also pinning the UK market's stability against US tech volatility.
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Bank Of England Poised For A December Cut
- The Bank of England vote was tighter than expected, signaling a likely December rate cut if conditions persist.
- Markets may get room to cut as CPI drifts from 3.8% toward ~3.5%, reducing the visual hurdle for a rate cut.
Fiscal Reset Emphasizes Fighting Inflation
- Rachel Reeves framed fiscal policy around reducing inflation and wanting lower interest rates.
- That public stance likely signals a budget that avoids inflationary measures and aims to reassure the BoE.
Fuel Duty Assumptions Inflate Fiscal Gaps
- The OBR habitually assumes fuel duty will be unfrozen, overstating fiscal shortfalls by roughly £5bn.
- Newer proposals like per-mile EV charges let the government raise transport revenues without visibly pushing inflation.