BUSINESS LIVE: Interest rates held at 5.25%; Retailer Next upgrades profit expectations

The Bank of England has left interest rates unchanged at 5.25%.

The Co-operative Group will invest millions of pounds in cutting food prices after adding almost half a million new members.

The retailer said it had already invested £20 million in cutting prices in its food stores and introducing member-exclusive prices in the first half of the year, with plans for a further £70 million of investment.

It comes as other supermarkets cut prices supermarket inflation remains in double digits.

Pressure on the Chancellor to cut taxes ahead of the next general election increased further after figures showed government borrowing in August was lower than officially forecast.

The Office for National Statistics said net public sector debt stood at £11.6 billion last month – £3.5 billion more than a year earlier and the fourth highest borrowings in August since records began.

It was higher than the £11.1 billion forecast by most economists, but lower than the £13 billion forecast by the UK’s budget watchdog, the Office for Budget Responsibility (OBR).

Chancellor Jeremy Hunt said: “These figures show why, after helping families during the pandemic, we now need to balance the books.

‘That becomes much easier when inflation is under control, because higher inflation pushes interest rates up. So we have to stick to the plan to bring inflation down.’

Retailer Next says sales have been better than expected, with the business showing a boost from the warm weather.

It showed pre-tax profits rose 4.8 per cent to £420 million in the six months to July, compared to the same period last year.

The FTSE 100 company also saw total sales rise 5.4 percent, with exceptionally warm weather in late May and June boosting sales of its summer clothing at a critical time, the group said.

JD Sports said it is on track to post higher annual profits as demand for premium casual wear boosted sales.

Despite the financial pressure, JD’s generally younger customer base has continued to turn to brands like Nike and Adidas.

The retailer said sales grew 7 percent to £4.7 billion at constant exchange rates, with organic sales growth of 12 percent in the six months to July 29, 2023.

Shares in JD Sports are up 8 percent to 143.64p, after rising 16 percent over the past year.

Hearings before select committees of MPs rarely raise the roof.

However, the titanic televised battle between former ‘King of the High Street’ Sir Philip Green and campaigning former MP Frank Field over the fallout from the 2016 collapse of BHS was a formidable exception.

Both emerged victorious in their own ways. By using quick wit, repartee and entrepreneurial knowledge, Green was able to show that he had been let down by the good and the great.

The FTSE 100 index opened at 7731.65.

Yesterday it emerged that inflation had fallen again to 6.7 percent – ​​a figure that would have been seen as horrendously high just two years ago, but is now seen as something to be happy about.

Although the CPI value is still a significant figure, it is an important step on the path back to the ‘old normal’ – where both interest rates and wage increases are higher than inflation.

This is Money readers don’t need to be reminded that falling inflation doesn’t mean life is getting cheaper, just that it’s getting more expensive at a slightly slower pace, says Simon Lambert.

The pound tumbled to a 10-month low and shares rose as a surprise drop in inflation raised hopes that interest rates may already have peaked.

In a report that stunned the city, the Office for National Statistics said inflation fell from 6.8 percent in July to 6.7 percent in August.

The figures sent shockwaves through the financial sector and contradicted predictions that inflation would rise to 7 percent or even higher.

Economists and business groups said it would be a mistake if officials met today to raise rates for the 15th consecutive time from 5.25 percent to possibly 5.5 percent.

And the financial markets, which until yesterday were resolutely betting on a new interest rate increase, considered the decision to be on the cutting edge. Experts at Goldman Sachs and a number of other banks now expect the bank to keep interest rates unchanged.