• Cliff Equity
  • Posts
  • 📈 Bank of England Set to Slash Rates

📈 Bank of England Set to Slash Rates

2,000 Jobs Gone as BT Sharpens Focus

November 07, 2024

In partnership with

This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes

In today’s stories:

  • Bank of England Set to Slash Rates

  • 2,000 Jobs Gone as BT Sharpens Focus

  • £3bn Deal: Thames Water’s Financial Fork in the Road

The summary: With inflation easing, a potential rate cut could bring mortgage relief and fresh opportunities for borrowers, but savers might need to get creative as the UK economy weathers political twists and turns.

The details:

  • Rate Cut Rumours: The Bank of England is tipped to trim interest rates from 5% to 4.75%, a move aimed at boosting borrowing but likely to leave savers feeling a bit short-changed.

  • Inflation Influence: With inflation down to 1.7%, the lowest in over three years, the Bank sees room to cut rates further, adding a touch of relief to mortgage holders but a frown to savers’ faces.

  • Budget and Trump Twist: Last week’s UK Budget and Trump's US election win could add a twist to future rate cuts, as higher inflation expectations muddle predictions for December.

  • Savers, Take Note: Savvy savers should shop around for better deals, as high street banks might slash savings rates. Loyalty doesn’t pay here—it's all about finding the best fit for your stash.

Why it matters: Interest rate cuts mean borrowers might breathe easier, but savers will feel like their hard-earned cash is on a diet. With inflation dropping, the Bank of England has room to give mortgages a bit of relief, though it’s likely to sting those hoping for decent returns on savings. And with political curveballs from the Budget and a fresh Trump victory, even the best-laid financial plans could get a shake-up across the board.

Pioneering medicine starts with investors like you.

Cizzle Biotech is transforming lung cancer detection with a patented, 95% accurate blood test. By joining our raise, you’ll gain ownership in a company backed by partnerships with Bio-Techne and Moffitt Cancer Center. You can build your portfolio with a stake in a medical breakthrough.

Read the Offering information carefully before investing. It contains details of the issuer’s business, risks, charges, expenses, and other information, which should be considered before investing. Obtain a Form C and Offering Memorandum at invest.cizzlebio.com

The summary: BT's shaking up its business with bold cost cuts, record-breaking fibre and 5G rollouts, and a laser-focus on future tech to stay ahead in the tough telecoms game.

The details:

  • BT's numbers aren't ringing any louder: it cut its sales forecast for the year, reported a 10% drop in pre-tax profits, and is bracing for a 1-2% revenue slide, all due to stiff retail competition and lagging sales abroad.

  • The jobs axe continues to swing – 2,000 roles gone so far this year as BT inches towards its goal of a 75,000-90,000 workforce by 2030, with £433m saved in just the first half.

  • New CEO Allison Kirkby is pushing the company’s "modernisation" agenda, combining mass cost-cutting with a record-setting rollout of full-fibre broadband, now reaching 16 million UK homes, and expanding 5G to cover 80% of the population.

  • With a further £3bn in cuts targeted by 2029, Kirkby’s on a mission to revive BT’s fortunes, doubling down on tech investment while tightening the budget belt.

Why it matters: BT's belt-tightening and profit dip underscore the pressures on UK telecoms to stay afloat in an intensely competitive market, while cost cuts are all about keeping investors sweet and finances tidy. The focus on fibre and 5G upgrades hints at a bold bet on future tech to secure BT's place in the broadband big leagues, despite current headwinds. Meanwhile, job cuts and AI replacements signal the stark reality of modernisation, with BT racing to do more with less.

The summary: Thames Water’s financial fiasco is turning into a high-stakes battle between bondholders offering cheaper solutions, executives eyeing hefty paychecks, and Ofwat keeping a close eye on the mess—talk about a soggy situation!

The details:

  • Bondholder Brawl: Thames Water's Class B bondholders have thrown down a £3bn funding offer, hoping to outshine a competing bid from the Class A crew. This sets up a showdown involving heavyweight hedge funds and pension giants all vying for control over the UK’s largest water utility.

  • Cost Cutter’s Dream: Class B backers promise Thames Water twice the cash at a fraction of the cost and with flexible terms—an offer that claims to save the utility hundreds of millions in fees and interest, if they ditch Class A's more expensive option.

  • Money Troubles and Executive Grumbles: With investors walking away, Thames Water’s shareholders have already branded the firm "uninvestible." Executives, however, are still eyeing potential hefty pay packets, sparking murmurs of controversy as the government probes into the struggling sector.

  • Regulatory Raincheck: Thames is treading on thin ice with Ofwat as it seeks leniency on fines, all while the regulator keeps a close eye on the utility’s track record with sewage leaks and waste.

Why it matters: Thames Water is teetering on the brink of financial collapse, and the bondholder battle is now the deciding game for its survival, with the Class B group offering a lifeline at a bargain price. Meanwhile, the company’s executive pay is causing more uproar than a wet Tuesday in the pub, especially as they try to dodge hefty fines for their sewage antics. All this is happening under the watchful eye of Ofwat, who’s got the regulatory equivalent of a magnifying glass on the situation.