Bailey should take the lead on rate cuts, says ALEX BRUMMER

After the chaotic local election results, the Tories’ only hope of moving the goalposts is a rate cut.

The £900 extra in people’s pay packets as a result of abolishing national insurance for employees is failing to get voters back on their feet.

The idea has been instilled in the minds of citizens that the costs of mortgages and credit for consumers and businesses are high as a result of the Truss tantrum.

Yes, the former Prime Minister may have orchestrated a conspiracy, but the real blame lies with China, where Covid-19 started, and with Moscow as a result of Russia’s aggression against Ukraine.

Rishi Sunak and Jeremy Hunt have no direct control over interest rates.

If they put pressure on the Bank of England to cut the bank rate from 5.25 percent, it could have the opposite effect, with the rate-setting Monetary Policy Committee (MPC) doubling down on independence.

Tomorrow, when the MPC meets for its session, Governor Andrew Bailey can show leadership.

There was a change of tone in Washington last month, with Bailey optimistic that the supply-side factors that pushed inflation to 11 percent have retreated.

This gives the Bank the choice to take the lead in higher financing costs.

Markets have been thrown into disarray by mixed messages with chief economist Huw Pill suggesting interest rates could remain higher for longer.

He is just one vote on a nine-member committee where the hawks must be removed from the top.

No one is predicting a reduction in May. Such a step would boost the housing market and consumer and business confidence. Bailey must take command and lead the attack.

Villains gallery

Nikhil Rathi doesn’t really have a public profile. That will change this week when Britain’s top financial regulator will be questioned by the Treasury Select Committee over his proposal to ‘name and shame’ alleged City wrongdoers.

The idea has attracted a barrage of criticism from the Square Mile, with around 16 industry bodies (why are so many needed!) coming out against him.

As if that wasn’t bad enough, Jeremy Hunt has also weighed in, fearing that Rathi’s intervention could damage his Edinburgh reforms, which were intended to unleash a wave of entrepreneurs.

As head of the Financial Conduct Authority (FCA), Rathi has been at the forefront of deregulation, advocating for a reduction in red tape for London stock exchange listings.

It should come as no surprise that the City’s trade organizations are against ‘name and shame’.

FCA regulation is notoriously slow; it takes an average of three years before action is taken – and with different professions it can take five years.

This gives the offenders ample time to hire the best lawyers, plow the field and let miscreants go free.

Rathi’s refreshing approach would end the barrier to transparency that favors hooligans at the expense of victims of bad behavior. Choosing an independent rule maker is not a good idea.

Next act

Charlie Munger’s death focused attention on this year’s succession at “Woodstock for Capitalists” in Omaha, Nebraska – home of Warren Buffett’s 93-year-old Berkshire Hathaway.

Buffett assured his followers that he had the right people in vice-chairmen Greg Abel and Ajit Jain to build on the legacy of his idiosyncratic £690 billion investment fund.

But with £150bn of cash on the balance sheet, the oracle is still looking for the next one: Geico, Coca-Cola or Apple.