In the economic gloom of Labour’s first year in power, Rachel Reeves has had a reliable shred of comfort to cling to: five times since the general election, the Bank of England has cut interest rates.
This week, in all likelihood, the chancellor will get a sixth to shout about, as Threadneedle Street prepares to reduce borrowing costs in an early Christmas present that will be seized upon by the Treasury.
The view in the City is that a festive cut on Thursday is odds-on. After last week’s disappointing October growth figures, the jobs market and consumer prices data due out on Tuesday and Wednesday – before the rates decision – are expected to confirm that inflationary pressures in the UK economy are fading.
But while a cut will be good news for businesses, mortgage borrowers and the beleaguered occupants of Downing Street, attention will quickly shift to the prospects for 2026. How many more times could the central bank come to the chancellor’s rescue? Here things are a bit more complicated.
Reeves’s increase in employer national insurance contributions has played a part in unemployment hitting its highest level since 2021. Photograph: Leon Neal/Getty Images
That Britain’s economy is in the doldrums should hardly come as a surprise. Continual tax speculation has sapped business confidence and household spending, while Reeves’s increase in employer national insurance contributions has played a part in UK unemployment hitting the highest levels since 2021, during the height of the Covid pandemic.
Celebrating a rate cut, in this context, is akin to an arsonist cheering the arrival of the fire brigade.
There are, though, factors beyond Reeves’s control. Not least the dire state Britain’s economy was left in by the Conservative party, and Donald Trump’s damaging tariff war.
The Bank has also played a role. Borrowers have been singed by three years of punitively high interest rates set in deeply restrictive territory. The policy is the central banker’s main tool for combating inflation as it chokes off demand by incentivising saving and discouraging spending.
After the inflation shock triggered by Russia’s invasion of Ukraine, Threadneedle Street argues it had little choice but to act. But the growth trade-off is clear. Even after successive rate cuts, the Bank’s own analysis shows the base rate continues to subtract about 2% from the level of GDP.
Bank rate chart
Anyone who has remortgaged their home since 2022 knows this first-hand. And despite progress since the Liz Truss debacle, millions of borrowers still face substantially higher loan repayments – and will continue to do so for years to come. That is hardly going to light a match under the UK’s consumption-driven economy.
This week the Bank’s policymakers are expected to be split on the appropriate way forward. Some on the nine-strong monetary policy committee (MPC) recognise the damage rates are doing at a time when inflation is cooling. Others think a tough approach is warranted to snuff out price rises.
Andrew Bailey is expected to hold the casting vote. The Bank’s governor has suggested he thinks inflation is more likely to fall back than stick at stubbornly high levels – paving the way for a quarter-point cut on Thursday.
Next year, however, it is tougher to anticipate how the MPC will respond. Policymakers are likely to remain divided on the inflation outlook and the “neutral” position for rates – the point at which they are neither stoking nor hosing down economic activity.
Reeves’s budget measures – including relief on energy bills, fuel duty, rail fares and prescription charges – could support the case for deeper cuts. The Bank predicts the policies could slash headline inflation by up to 0.5 percentage points by the middle of 2026.
All of this was part of a deliberate strategy inside the Treasury in the hope voters give credit to Labour for lower mortgage costs. Government borrowing costs could also fall back, unpicking some of the factors behind the recent years of fiscal drama in Westminster.
However, many economists warn the reprieve could be temporary.
Much of the disinflationary impulse will be in energy prices, and do little to help Britain’s issues with sticky service sector inflation. Other areas of government policy could also push in the wrong direction.
Business leaders warn a higher minimum wage, business rates, and other tax increases will drive up their costs – resulting in companies putting up prices for their customers, in turn stoking inflation.
That said, some of the factors the hawks are betting on look shaky.
Business costs are rising but hardly at breakneck speed. At 4.1%, the rise in the minimum wage from April is significantly below that in previous years – particularly when set against the context of 2022, when Jeremy Hunt ignored misplaced warnings about a wage-price spiral and increased the legal pay floor by 9.7% from April 2023.
By the time we get to spring, there should be signs that inflation is undershooting, and wage growth is slowing. The economy will probably still be lacking momentum. Household confidence may be picking up, and companies will probably lack the pricing power to push through yet more increases.
All of this means Reeves could see more rate cuts from the Bank.
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Prior to the government announcement, a full council meeting last week heard local dad David Wilmot say there had been a “catastrophic failure” to deliver a new school.
“The delay means that by 2030, hundreds of children who deserve a local high-quality education will be forced to travel further, clogging our roads, disrupting family life and placing an unbearable and crushing strain on our already stretched existing schools,” he said.
The school was originally expected to open by 2024, but there had been no formal confirmation from the government on whether work could progress.
Chris Langdon, project director at Hanwood Park, said: “We are mobilised and ready to get moving.
“So alongside our new facilities coming forward such as the new David Lloyd Club, this decision is another clear vote of confidence in the sustainability and ongoing success of Hanwood Park.”
The council said it would seek further clarity on a clear timescale for the delivery of the school, which will be run by the Orbis Education Trust, external.
Wrighting said: “I will keep pushing for an opening date to be confirmed and will update constituents as soon as I have more information to share.”
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Trey Sherman was traveling to work on the New York subway when he received an email from David Reiter, a CBS News executive, about an imminent meeting on 29 October. Sherman, an associate producer of CBS Evening News Plus at the time, suspected that he would be laid off. CBS News’s parent company, Paramount, had closed a merger with the Hollywood studio Skydance in August, and planned to slash more than 2,000 jobs as part of corporate restructuring.
Sherman, who is Black, and Reiter, who is white, had an amicable conversation, according to Sherman. Reiter told Sherman that he was being laid off because his show was being eliminated, Sherman said, and that Reiter was unable to assign the team to other positions. Sherman accepted the news and the two men wished each other good luck.
But when Sherman left the conference room and entered the newsroom, he said he learned that his white colleagues had been told a very different story. A white co-worker told Sherman that she found it “messed up” that the people of color on the team had been laid off. Of the nine producers who staffed CBS Evening News Plus, five white people were reassigned to other positions, while the four people of color on the team were let go, according to Sherman and another former staffer who spoke on the condition of anonymity out of fear of retaliation. Later that day, Sherman documented his experience in a viral TikTok video. CBS did not respond to the Guardian’s multiple requests for comment.
Sherman’s role may be the latest casualty in a nationwide crackdown on diversity. Several high-ranking Black officials have been fired from the Trump administration, and thousands of jobs related to diversity, equity and inclusion (DEI) have been cut in the private and public sectors. The Guardian talked to seven recently laid off journalists at CBS, NBC and Teen Vogue who spoke of people of color on their teams being let go while their white colleagues were spared, or the chipping away at coverage focused on marginalized communities.
Newsrooms have long been less diverse than the US population, which makes these layoffs in particular especially pronounced. In 1978, the American Society of Newspaper Editors, an organization for media leaders, vowed that the racial makeup of newsrooms would reflect the US population by 2000. As the deadline neared in 1998, the society moved the date to 2025, but newsrooms still haven’t met that goal. According to a 2022 Pew Research Center survey of nearly 12,000 journalists, 76% of respondents were white, 8% were Latino/Hispanic, 6% were Black and 3% were Asian. The survey showed an overrepresentation of white journalists, since nearly 58% of the population was white, about 19% were Hispanic, 12% were Black and 6% were Asian in the 2020 US census.
Some journalists see the layoffs as capitulation to the Trump administration’s war on DEI. After Trump’s January executive orders calling for an end to DEI programs and the termination of affirmative action in the federal government, Sherman said that “one by one, we saw companies get rid of their DEI initiatives”.
CBS and NBC are subjected to regulatory scrutiny by the Federal Communications Commission (FCC), which oversees radio, television, cable, satellite and wire communications. During his first week in office, Brendan Carr, the FCC chair, announced that the FCC would end its DEI efforts by, among other things, removing it as a priority from the agency’s budget, and quashing its advisory group and taskforce.
Several weeks later, Carr launched an investigation into Comcast and NBC Universal’s diversity initiatives, followed by a similar inquiry into Disney and ABC. Disney told employees in a February memo that it would stop Reimagine Tomorrow, a platform that amplified underrepresented voices, and the corporation’s 2025 annual report eschewed the word “diversity” for the first time in six years.
In July filings to the FCC before the merger, Skydance promised that it would eliminate Paramount’s DEI initiatives and workforce diversity targets. And in October, Bari Weiss, an opinion journalist who advocated to “end DEI for good”, was appointed the editor in chief of CBS News. Some CBS News employees have been on edge since Weiss’s appointment.
Then in early November, sources allege that most Teen Vogue employees – many of whom were women of color – were let go as publisher Condé Nast announced that the outlet focused on politics, fashion and news would join Vogue’s website. A Condé Nast spokesperson said it was inaccurate that most of the staff had been let go. Those reductions came several weeks after NBC News laid off 150 employees, and gutted teams on verticals that exclusively covered Black, Asian American, Latino, and LGBTQ+ communities. The equity-focused sections will continue to exist, though without a dedicated staff, drawing from content around the newsroom.
Some institutions within the journalism industry have also steered away from DEI in their company language since Trump entered office. In April, Gannett removed demographic data and mentions about diversity from its website, citing Trump’s executive order calling for an end to DEI.
The Trump administration “has used its power to exert more control over the media than maybe we’ve ever seen”, Sherman said. “It so happens that part of their agenda is to, let’s be real, not just get rid of DEI initiatives, but to get rid of diversity in and of itself.”
In a political climate that’s hostile to diversity, people of color must start their own media outlets and podcasts, said political commentator and National Association of Black Journalists board member Roland Martin: “These companies are going to learn a hard lesson: if you continue to remove Black, Latino, Muslim and Asian American voices, those consumers are going to go elsewhere.”
‘It’s not a coincidence’
After speaking to his white colleagues, Sherman went to Reiter’s office to confront him about the layoff discrepancies. Sherman said that Reiter told him that he chose to keep people he had previously worked with. After Sherman posted his video recapping the conversation with Reiter on TikTok, he said he received messages from former employees at other media outlets who had similar stories. Mary, a woman of color who is using a pseudonym out of fear of jeopardizing future job prospects, said that she was shocked when she watched Sherman’s video.
She was laid off from another CBS team on the same day as Sherman, and soon realized that out of the dozens of people on her diverse team, the only four who were laid off were people of color. “We certainly have white producers, we have white reporters who could have been laid off as well,” Mary said. They had to have “known that would not look good”.
In a memo to employees, the new Paramount Skydance CEO David Ellison wrote that the cuts were necessary for the company’s longevity. “In some areas, we are addressing redundancies that have emerged across the organization,” he wrote. “In others, we are phasing out roles that are no longer aligned with our evolving priorities and the new structure designed to strengthen our focus on growth.”
Mary and Sherman, though, say it’s clear that CBS’s methodology for who they chose to lay off reflects the Trump administration’s assault on diversity. “I’m not accusing any one person of looking at my department and deciding to lay off all the people of color,” Sherman said, “but I am saying that it’s not a coincidence that the layoffs that they chose to do fell along racial lines.”
While Sherman would not comment on whether he was pursuing legal action, Mary said that she and several former CBS employees have expressed interest in filing a lawsuit: “This is very suspicious.”
In mid-October, the entire teams behind NBC BLK, NBC Asian America, NBC Latino, and NBC Out were laid off, but content from around the newsroom will continue to populate the verticals. Curtis Bunn, the only reporter at NBC BLK, a vertical that focuses on Black communities, was one of the people who was let go. Over the past two years, he said, he watched the team dwindle from four people to two until the final purge. The layoffs also come as most of Comcast’s NBCUniversal cable networks spin off into a new company called Versant Media Group, causing NBC News to streamline its operations. (Forty people were also let go from NBC in January. An NBC union representative said it does not have a demographic breakdown of the layoffs.)
Bunn said that he trusts the company’s reasoning, but he is curious about why the teams that covered marginalized communities were eliminated. “When you see what’s happening around you, and you see the nature of even the media companies capitulating to the administration,” Bunn said, “you can’t help but feel like that has some part or some role in what took place.” He said that he was told that he could apply for other roles at the company.
“The journalists behind NBC BLK, NBC Latino, NBC Asian America and NBC OUT have chronicled our communities with depth, nuance and humanity,” NABJ president and co-founder of the 19th, Errin Haines, said in a statement. “If anything, their work has strengthened our democracy and expanded our nation’s understanding of itself.” NBC did not respond to repeated requests for comment.
Traci Lee, a journalist who was NBC Asian America’s digital editorial manager from 2015 to 2019, said that the vertical helped elevate Asian American and Pacific Islanders’ experiences to a national sphere. “So often we have other people telling our stories for us, whether it is being glossed over in history books, or perhaps just being excluded from the narrative,” Lee said. “This was a space where we could, on a national level, tell our own stories.” When NBC Asian America wrote stories about the concentration camps that held Japanese Americans during the second world war, readers reached out to say that they had never been taught about the topic in school.
Leaders from affinity groups including the Asian American Journalists Association, NABJ and NLGJA: the Association of LGBTQ+ Journalists met with NBC’s executives about the layoffs in late October, during which NBC promised to continue covering their communities.
It was soon after this that five women of color from Teen Vogue were let go. Condé Nast, Teen Vogue’s parent company, would not confirm the number of laid-off staff or their demographics.
Skyli Alvarez, an Asian queer woman on Teen Vogue’s editorial team who was laid off, said that she was in a state of shock when she realized that most of the laid-off employees were people of color. “In the media landscape today, a lot of people of color, a lot of people of marginalized identities, tend to be in these entry-level, associate-level positions,” Alvarez said. “And so to me, I was like: ‘This speaks to a bigger issue beyond all of us.’”
The Condé Nast spokesperson said that the restructure is designed to help the company grow, since Teen Vogue has long faced difficulties in reaching audiences. “Rather than continuing to operate independently, bringing Teen Vogue under the Vogue umbrella allows it to tap into a larger audience, stronger distribution and more resources,” the spokesperson said. “Any organizational changes the company makes are purely driven by business strategy to grow consumer engagement with our titles.”
“Teen Vogue was one of the last really outspoken publications on problems that affect young people, that young people care about,” Alvarez said. She hopes that communities of color and LGBTQ+ people will continue ensuring that their perspectives are heard nationwide despite the publication’s absorption.
In light of the mass layoffs, some Black creatives have begun gathering online to form a collective in their vision. In early November, Aniyah Freeman, a digital marketer based in New York, put a callout on LinkedIn to start a media company with recently laid-off Black journalists. So far, she said, about 200 people have joined a group chat; a core group of 15 recently laid-off Black media professionals from various companies including ABC, Rolling Stone and Condé Nast have met on Zoom several times.
For now, their media company is called Black Media Caucus, and they are working on business plans for a magazine focused on politics, fashion and culture. “It’s going to be giving us perspectives that they’re trying to take away from us,” Freeman said. “We need Black-owned-and-run establishments that are going to stay that way. This current political climate is an inspiration for all of us.”
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