Bank ‘not yet ready to cut interest rates’

UK BORROWERS may have to wait longer to see interest rates come down, as policy-makers look set to hold out for stronger signs that the cost-of-living crisis has abated.

The Bank of England’s Monetary Policy Committee (MPC), which sets the level of UK interest rates, will announce its latest decision on Thursday.

Economists are expecting the committee to keep rates at the current level of 5.25%, which it has been held at since August last year.

It means that borrowers holding out for costs to come down could have to wait longer before pressure starts to ease.

At the last meeting in March, just one member of the MPC, Swati Dhingra, voted for rates to be cut by 0.25 percentage points, but the remaining eight members voted for no change.

Philip Shaw, chief economist at Investec, said: “This broad direction illustrates that collectively the committee is moving gradually towards a rate cut.

“It seems unlikely though to be ready to bite the bullet just yet and the Bank rate looks set to remain on hold at 5.25% for the sixth consecutive meeting.”

Interest rates are used as a tool to help bring down UK inflation, which has fallen sharply from the highs hit in 2022 when energy costs spiked and the cost-of-living crisis was at its peak.

AUK Government nuclear quango has dropped Trawsfynydd from the initial rollout of small modular reactors.

Former Prime Minister Boris Johnson had said in 2022 that the UK Government is “looking to build another small modular reactor (SMR) on the site at Trawsfynydd”.

The Nuclear Decommissioning Authority (NDA) and Welsh Government-owned Cwmni Egino had been working up plans for a new nuclear station close to the former power station, which stopped generating in 1991 and is in the long process of being decommissioned.

The location had also previously been tipped by Rolls-Royce SMR as a location for a SMR.

But those hopes have been dealt a blow after Great British Nuclear (GBN) said the site would not be considered in its initial rollout phase.

It is understood the size of the site and the volume of cooling water counted against it. They also said it may not be able to deploy as quickly as some other sites.

It has not been ruled out completely, though, and could play a part in the future. A source explained that the initial rollout was looking at locations that could host four or five SMRs, which Traws does not have capacity for.

But once these larger sites are developed, a further rollout would consider smaller sites that could host one or two SMRs, with would put the Gwynedd site back in contention.

On Anglesey, the UK Government is buying the Wylfa site in an attempt to progress nuclear development on the island after two failed attempts for a Wylfa B. This could be used for four or five SMRs or a single large-scale nuclear power station.

A spokesperson for GBN said: “GBN recognises the good progress made by Cwmni Egino to understand the potential of the Trawsfynydd site for nuclear development and the considerable expertise the team brings to the industry and will continue to work alongside them.

“For the first phase of SMR deployment, Trawsfynydd might not be able to deploy quite as quickly as some other potential sites and might not offer the same potential for generation capacity, but it is an interesting site for future nuclear development.”

GBN’s plans for its first phase of work for SMRs propose to make decisions on investments by 2029, with power on the grid by the mid-2030s.

The Welsh Government has recently cut its budget for Cwmni Egino from £2m to £500,000. This was criticised by Conservative politicians, including Aberconwy MS Janet Finch Saunders, but the Welsh Government told BBC Wales that it took the decision because of the lack of support from GBN.