Britain is preparing for a rate cut… and not too soon, says ALEX BRUMMER

Andrew Bailey hasn’t had much to celebrate lately. He has suffered the slings and arrows of the barbed Bernanke report on the Bank of England’s predictions and the indiscriminate firing of former Prime Minister Liz Truss.

Amid the commotion surrounding the governor of the Bank of England, his eyebrows can still work their magic.

During last week’s financial sessions in Washington, Bailey made clear that it is possible for Britain to plow its own furrow when it comes to setting interest rates.

Pressure on the cost of living in Britain has been driven by supply-side factors, particularly energy costs following Russia’s war against Ukraine. In the US, by contrast, a booming economy slowed progress in curbing inflation.

This should mean that Britain could get ahead of the US Federal Reserve in cutting interest rates.

Turning point? Bank of England Governor Andrew Bailey was clear that it is possible for Britain to plow its own furrow when it comes to interest rates

Markets have taken the message and prospects for rate cuts have grown by leaps and bounds in the latest trading.

Markets are signaling an initial cut in the UK interest rate of 5.25 percent by a quarter of a percentage point at the August meeting and two cuts to the base rate by the end of the year.

The interest rate on two-year government bonds has also fallen. Both homeowners and businesses also have something to look forward to.

Stock prices have been supported by the lack of escalation in Israeli-Iran violence so far, although the fire in Gaza continues.

Bailey’s next fight will be at the Monetary Policy Committee. As governor, it is up to him to set the tone during the meetings of the interest rate setting committee.

He could probably convince Bank insiders, but outside hawks, including Jonathan Haskel of Imperial College London, could pose a bigger obstacle.

Not until it is recognized that it is time to take the foot off the monetary brake.

High notes

Who would have ever thought: a bidding war for Merck Mercuriadis’ Hipgnosis song fund.

As the group struggled to survive earlier this year, it seemed like some sort of run-off was the most likely outcome.

Hipgnosis is one of my “hobby” stock portfolios that has gone disastrously wrong. Hotel Chocolat was saved from humiliation by an opportunistic takeover by the secretive Mars family. The Brighton Pier Company, bought for 100 cents, now trades for less than half that.

A former roadie, Mercuriadis had a great story to tell when he founded Hipgnosis. His long track record in the world of popular music gave him access to the big players, and their songbooks offered a new asset class.

My interest in songbooks was deepened by my son Justin, an academic and founder of the website VietnamWarSongs, which catalogs and collects protest music.

Hipgnosis led the way in signing up artists such as Shakira, Jay-Z and Justin Bieber.

As the space became more crowded and the industry giants recognized that royalties had value, the price of new purchases rose. Mercuriadis found himself paying increasingly higher prices for songbooks and the economy fell apart.

He also faced conflict of interest claims over his relationship with private equity Blackstone, as Hipgnosis Song Management acted as an advisor to the group with an option to purchase the entire songbook from the original fund.

The arrival of Blackstone, which competes with Concord Chorus, should be good for shareholders. The bidding war is unlikely to yield a profitable exit route from a fund once valued at 150p per share.

Still, Blackstone’s $1.24 (just over 100 cents) per share cash offer offers a decent exit route. It would be great if Concord came back with a counter-proposal or if one of the industry giants saw an opportunity.

An honorable escape route is the best this hobby owner can hope for.

Post hurry

The Royal Mail owner’s attempt to reverse an unwanted bid from Czech billionaire Daniel Kretinsky by asking regulator Ofcom to demand a swift response to proposed delivery reforms could be a double-edged sword.

If proposals for a premium and expensive fast delivery service and a slow second class get the green light, parent company International Delivery Services could become an even more attractive bid.

The government wants it to be known: mail is not for sale.

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