The Bank of England needs to be "very cautious" about future rate cuts as British inflation looks set to remain the highest in the Group of Seven advanced economies this year and next, the International Monetary Fund's chief economist said on Tuesday.

The advice from the IMF's Pierre-Olivier Gourinchas comes after the Fund forecast Britain's economy would grow 1.3% in 2025 and 2026 - a 0.1 percentage point upward revision for 2025 and a 0.1 percentage point downward revision for 2026 compared with the last forecasts in July. 

While this leaves Britain on track to be the second-fastest-growing economy in the G7 this year after the United States and third-fastest in 2026, consumer price inflation is forecast to average 3.4% this year and 2.5% next year, the IMF said, the highest in the G7 and an upward revision since April's forecast. (RTRS – Continue Reading) 

A sharp slowdown in hiring poses a growing risk to the U.S. economy, Federal Reserve Chair Jerome Powell said Tuesday, a sign that the Fed will likely cut its key interest rate twice more this year. 

Powell said in a speech in Philadelphia that despite the federal government shutdown cutting off official economic data, “the outlook for employment and inflation does not appear to have changed much since our September meeting,” when the Fed reduced its key rate for the first time this year. 

Fed officials at that meeting also forecast that the central bank would reduce its rate twice more this year and once in 2026. Lower rates from the Fed could reduce borrowing costs for mortgages, car loans, and business loans. Powell spoke before a meeting of the National Association of Business Economics. (AP – Continue Reading) 

Senate GOP leaders are looking to pressure Democrats to make progress on a three-bill package to fund a handful of federal agencies amid the government shutdown, according to three people with direct knowledge of the plans.

Republicans are attempting to expedite the process of instructing lawmakers to go to conference with House counterparts on the “minibus” legislation that would fund the Departments of Agriculture and Veterans Affairs, the FDA and the operations of Congress, among other offices and agencies. 

Senate GOP leaders were Tuesday evening running a so-called “hotline” on the GOP side to advance the package to conference, which refers to a process of trying to smoke out of there any any objections from their own members. (Politico – Continue Reading)