LONDON (AP) — The Bank of England kept its main interest rate unchanged at 5% Thursday despite a big cut from the U.S. Federal Reserve, its first since the onset of the coronavirus pandemic more than four years ago.
The decision was widely expected amid ongoing concerns about inflation within the bank’s monetary policy committee, particularly the elevated levels in the crucial services sector, which accounts for around 80% of the British economy. Figures on Wednesday showed that inflation overall in the U.K. held steady at an annual rate of 2.2% in August, still above the bank’s goal.
Minutes to the meeting showed that eight of the nine members of the panel voted to keep rates unchanged, while one backed a quarter-point reduction.
“The economy has been evolving broadly as we expected. If that continues, we should be able to reduce rates gradually over time,” said Bank Gov. Andrew Bailey. "But it’s vital that inflation stays low, so we need to be careful not to cut too fast or by too much.”
The bank, which last month cut interest rates for the first time since the pandemic, is widely expected to reduce borrowing costs again at its next meeting in November, especially as it will have details of the government’s budget on Oct. 30.
On Wednesday, the Fed cut its main interest by half of a percentage point to roughly 4.8% from a two-decade high of 5.3%, where it had stood for 14 months. It also signaled that there will be more cuts to come in the next few months.
Central banks around the world dramatically increased borrowing costs from near zero during the coronavirus pandemic when prices started to shoot up, first as a result of supply chain issues built up and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs. As inflation rates have fallen from multi-decade highs recently, they have started cutting interest rates.
On Wednesday, the Fed became the latest major central bank to reduce borrowing costs, cutting its main interest by half of a percentage point to roughly 4.8% from a two-decade high of 5.3%, where it had stood for 14 months. It also signaled that there will be more cuts to come in the next few months.
Though Thursday's decision could be seen as bad news for borrowers, they should get some relief over the coming months, with most economists predicting that the bank will reduce its main rate to around 3.5% by the end of 2025, with a consequent reduction in the cost of personal loans and mortgage rates.
The bank is widely expected to reduce borrowing costs again at its next meeting in November, especially as it will have details of the government's budget on Oct. 30.
The new Labour government has said that it needs to plug a 22 billion pound ($29 billion) hole in the public finances and has indicated that it may have to raise taxes and lower spending, which would likely weigh on the near-term outlook for the British economy and put downward pressure on inflation.
Luke Bartholomew, deputy chief economist at abrdn, formerly Aberdeen Asset Management, said the Bank of England "will need to incorporate any fiscal changes in its next forecasts, which could provide the foundation for more rapid cuts in due course.”
Bank of England widely expected to hold interest rates despite big US Fed cut
FILE - The Bank of England is pictured in London, on Aug. 1, 2024. (AP Photo/Alberto Pezzali, File)
Bank of England widely expected to hold interest rates despite big US Fed cut
Woody Johnson sensed his struggling New York Jets needed a change — and now.
So the owner made the stunning decision Tuesday to fire coach Robert Saleh just five games into his fourth season after the team's 2-3 start following a 23-17 loss to Minnesota in London on Sunday.
“This is one of the most talented teams that has ever been assembled by the New York Jets,” Johnson said during a conference call with reporters. "I wanted to give this team the most opportunity to win this season. I feel that we had to go in a different direction and that’s why I did that today.
“This change, the change that we made today — that I made — I believe will bring new energy and positivity that will lead to more wins, starting now.”
Saleh was 20-36 as coach of the Jets, who are trying to snap the NFL’s longest active playoff drought at 13 seasons. The move marks the first time in Johnson’s 25-year tenure that a head coach has been fired during the season.
Defensive coordinator Jeff Ulbrich will serve as interim coach for the rest of the season — with the Jets maintaining expectations to make the playoffs.
“He’s going to add a spark of positivity," Johnson said of Ulbrich.
The surprising move came a day after Saleh said he was confident Aaron Rodgers and the Jets would be able to turn things around after losing two straight, including falling to undefeated Minnesota. Rodgers had his worst game with New York, throwing three interceptions.
“I’m not panicked,” Saleh said. "Nobody in the building is panicked.”
But Johnson had seen enough from Saleh, who became the NFL's first coach fired this season. Saleh, who had one year remaining on his contract, had the worst winning percentage — .357 — of any Jets coach with at least 40 games.
“It’s not just the last two games that has precipitated this decision,” Johnson said. “It’s a longer time frame. I’ve had a couple of years to think about this and I just think we can do better. The team can do better. As we have this new leadership, I think that’s going to bring out the best in these players, I really do. I feel confident that that’s going to happen.”
Johnson said he spoke with Rodgers — but not about a possible coaching change — on Monday. He also chatted with general manager Joe Douglas, but added “this was my decision and my decision alone.”
It's the 12th time since 2000 that a team has changed coaches just five games or fewer into a season, and the first since Matt Rhule was fired by Carolina after five games in 2022.
The Jets face the Buffalo Bills (3-2) on Monday night, when they have a chance to share the AFC East lead with a victory. But instead of Saleh, it will be the 47-year-old Ulbrich leading the team on the sideline.
Ulbrich, who played linebacker for 10 seasons with San Francisco, joined the Jets as part of Saleh's initial staff in 2021. He opened a video call with reporters by thanking Saleh for sticking by him when the Jets' defense struggled in their first season together.
“Today's an exciting day for myself from the standpoint of getting this opportunity,” Ulbrich said. “But at the same time, heavy in my heart for Robert.”
Ulbrich was an assistant with Atlanta for six seasons before coming to New York and was part of another midseason coaching change when the Falcons fired Dan Quinn five games into the 2020 season.
“We’re not playing to our potential," Ulbrich said. "We're not. We’re too talented to be putting the product we put out there the last couple of weeks, especially. We have to take a hard look at everything and be honest with ourselves.”
After success as San Francisco's defensive coordinator for four seasons, Saleh replaced the fired Adam Gase in January 2021 after the Jets went 9-23 in his tenure.
Saleh, the son of Lebanese parents, was believed to be the first Muslim head coach in NFL history when the Jets hired him. Saleh wore a patch of Lebanon's flag on his left arm during the game in London on Sunday, something he also did at times last season. The NFL encouraged players and coaches to represent their heritage.
Saleh's tenure began with a major decision as he and Douglas moved on from quarterback Sam Darnold — the No. 3 overall pick in 2018 — to draft Zach Wilson with the second overall pick in 2021.
While Saleh and Ulbrich's defense was a strength for the Jets, Wilson and the offense struggled mightily.
The Jets traded for Rodgers in April 2023, adding the four-time NFL MVP to a franchise looking for a winner. But last season was short-circuited when Rodgers tore his left Achilles tendon four snaps into his debut.
New York limped to a 7-10 record and while Johnson wouldn't specifically say there was a playoff mandate for this season, the owner made it clear during the offseason he needed to see marked improvement by saying “we have to do a lot better than seven games.”
Rodgers healed and was ready for the season opener, but he has been banged up the past two weeks and is dealing with a sprained ankle that hobbled him throughout the Jets' loss to Darnold and the Vikings. Saleh said Monday that preliminary tests indicated Rodgers should be able to play against the Bills.
But now Saleh will be only a spectator.
There were questions about his relationship with the 40-year-old Rodgers, but both denied any friction as recently as last week in London when the quarterback said “there’s some driving force trying to put a wedge outside the facility” between the two.
The Jets now will try to become the third team to make the playoffs with an interim coach leading the way, hoping to join the 2021 Raiders with Rich Bisaccia and the 1961 Oilers with Wally Lemm.
“This is a new day for the team and it’s a new day that’s welcome,” Johnson said. “And as the team realizes what opportunity this is for them, I think they’re going to go to a level that we haven’t seen in a while.”
AP Pro Football Writer Josh Dubow contributed to this report.
AP NFL: https://apnews.com/hub/NFL
FILE - New York Jets head coach Robert Saleh, right, talks with defensive coordinator Jeff Ulbrich before an NFL football game against the San Francisco 49ers in Santa Clara, Calif., Monday, Sept. 9, 2024. (AP Photo/Godofredo A. Vásquez, File)
FILE - New York Jets defensive coordinator Jeff Ulbrich walks the sideline during an NFL preseason football game against the Carolina Panthers, Saturday, Aug. 12, 2023, in Charlotte, N.C. (AP Photo/Brian Westerholt, File)
FILE - New York Jets head coach Robert Saleh walks on the field before an NFL football game against the Denver Broncos, Sunday, Sept. 29, 2024, in East Rutherford, N.J. (AP Photo/Seth Wenig, File)
FILE - New York Jets head coach Robert Saleh talks to reporters after an NFL football game against the Minnesota Vikings, Sunday, Oct. 6, 2024, at the Tottenham Hotspur stadium in London. (AP Photo/Kirsty Wigglesworth, File)
Minnesota Vikings head coach Kevin O'Connell, right, talks with New York Jets head coach Robert Saleh before an NFL football game, Sunday, Oct. 6, 2024, at the Tottenham Hotspur stadium in London. (AP Photo/Kirsty Wigglesworth)
