After the UK finally acceded to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) yesterday (15 December), there’s plenty still to come for trade before Christmas, including an interest rate decision and a raft of parliamentary discussions.
Politics
It’s a significant week for German politics with significant ramifications for broader EU politics, with chancellor Olaf Scholz to face a no-confidence vote in the Bundestag. If he loses, he will seek to trigger new elections, scheduled for 23 February - around seven months earlier than planned.
There will also be points of interest in the UK’s Parliament too, including today, when there will be a debate on the draft legislation for extending recognition of professional qualifications to Switzerland.
Thursday, meanwhile, will see Parliament host Department for Environment, Food and Rural Affairs (Defra) questions. This will focus on the timetable for banning the import of hunting trophies, as well as on the steps being taken to ensure the UK’s long-term food security.
Devolution
The government will publish its devolution white paper this week, outlining how it will empower the rest of England, beyond Westminster.
Among expected provisions in the paper is an extension of existing powers for England’s existing 12 metro mayors and reorganisation of local government to create “simpler structures that make sense for their local areas”.
Earlier this year, deputy prime minister Angela Rayner wrote to council leaders in what the government termed “devolution deserts” inviting them to take on more responsibility across areas such as planning, transport and skills.
The new government began its first term by inviting the UK’s metro mayors to meet in Downing Street, with Sir Keir Starmer telling press:
“By resetting these crucial relationships and putting more power in the hands of local leaders, I’m determined to make sure they have the support they need to play their part in delivering economic growth in every part of the country.”
“Devolution of power across England” was one of Labour’s manifesto pledges, part of its mission to “kickstart economic growth”.
Interest rates
Those attempts to kickstart growth may have faltered so far, with the UK economy experiencing a second consecutive monthly contraction in October. Inflation also crept up to 2.3%, making a further Bank of England (BoE) rate cut on Thursday (19 December) unlikely.
Reuters reported that an investor poll put the odds of a rate cut at only 10%, as price pressures in the UK jobs market and low business confidence following chancellor Rachel Reeves’ October budget seem set to keep the BoE holding firm.
BoE’s own survey of employers found that many businesses planned to pass some of the additional cost of Reeves National Insurance contribution rise to consumers, risking further inflation.
Despite this, November saw a second rate cut this year, from 5% to 4.75%. Following last month’s announcement, experts were immediately sceptical of any further cuts this year.
Speaking to the Guardian, Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales said that factors beyond the UK were also making another cut less likely:
“A December policy loosening looks improbable as rate setters will likely be concerned enough over inflation risks from the budget and growing global headwinds to resist signing off back-to-back interest rate cuts.”
Other dates for the diary:
Monday – EU foreign ministers committee to discuss Ukraine, the Middle East and Georgia
Tuesday – Tim Davie at committee session on future of the BBC World Service
Wednesday – Final Prime Minister’s Questions (PMQs) of the year
Thursday – European Council leaders’ summit
Friday – US government funding expires
Saturday – Winter solstice
Sunday – Spanish ‘El Gordo’ lottery
