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Business Today
Business live
Investors bet UK interest rates could start falling by March; US media giants in merger talks
Live  
Investors bet UK interest rates could start falling by March; US media giants in merger talks
Rolling coverage of the latest economic and financial news
Headlines
Energy  
Price cap in Great Britain to fall by 14% in April, says forecaster
Price cap in Great Britain to fall by 14% in April, says forecaster
Property  
Cost of private renting in UK rising faster than ever, says ONS
Shipping  
More than 100 container ships rerouted from Suez canal to avoid Houthi attacks
Premier League  
Plan to scrap betting ads on shirts will have ‘minimal effect’
Greensill  
David Cameron must detail all involvement, urges Labour
Artificial intelligence  
AI cannot be named as patent ‘inventor’, UK supreme court rules
Toshiba  
End of era as firm delists from Tokyo stock exchange after 74 years
Transport  
UK motorists warned of stormy weather in run-up to Christmas
Environment  
Conservationists take UK to court for ‘illegally squandering’ fish stocks
Sport  
Paris Olympics chief defends prices and insists tickets are cheaper than London
Financial sector  
UK and Switzerland agree to deepen banking system ties
‘We’re not backing down’  
Wells Fargo workers push to grow union campaign
Today's agenda
UK interest rates could start to be cut as early as March, some City investors believe, after Wednesday’s welcome drop in inflation.

The money markets are pricing in a sharp fall in UK borrowing costs, after the UK inflation rate dropped to 3.9% in November, a bigger fall than expected. The Bank rate is now at 5.25%, a 15-year high. Investors now see a 40% chance that rates will be cut in March 2024, to 5%, with a cut by May 2024 now priced in. UK interest rates are predicted to fall below 4% by the end of 2024, with the money markets now pricing in almost 1.4 percentage points over the course of next year.

The drop in inflation is pressuring the Bank of England to rethink its position that it’s too early to consider cutting rates. Having been criticised for not reacting quicker to the inflationary upsurge in 2021, critics now warn the BoE could be too tardy in responding to the recent drop.

The UK government borrowed more than expected last month, which may dampen the mood in the Treasury after Wednesday’s drop in inflation.

Public sector net borrowing (excluding the impact of public sector banks) has just come in at £14.3bn. That’s the fourth highest November borrowing since monthly records began in 1993. But it is a little lower (-£900m) than in November 2022, when the government was funding support programmes to lower energy bills. Subsidies paid by central government were £2.2bn in November 2023, £3.1bn less than a year ago, the ONS says.

So far this financial year (since April), the UK has borrowed £116.4bn. That’s £24.4bn more than in the same eight-month period last year and the second highest financial year-to-November borrowing on record. November’s borrowing means the UK national debt is now estimated at around 97.5% of UK GDP, at £2,671bn. That’s 1.8 percentage points higher than in November 2022, the highest since the early 1960s.

US news ... Hollywood loves a romantic Christmas movie. But this year, the spotlight is on a possible coupling between two of the largest US media companies. Warner Bros Discovery and Paramount Global are in early talks over a potential merger, according to reports this morning.

News website Axios reported overnight that Warner Bros. Discovery’s CEO, David Zaslav, met with Paramount Global CEO Bob Bakish on Tuesday in New York City to discuss a possible deal that would bring together two of Hollywood’s “Big Five” studios. The talks come as media groups struggle to improve profitability as they battle Netflix in the “streaming war” to win eyeballs.

A merger could bring Warner’s Max streaming service together with current rival Paramount+, to better rival Netflix and Disney+.

Axios says the pair discussed ways their companies could complement one another. As well as a streaming tie-up, CBS News could be combined with CNN to create “a global news powerhouse” while CBS Sports’ footprint could be combined with WBD’s.

But….the talks between Zaslav and Bakish were “at an early stage”, the Financial Times says, meaning a deal might not materialise.

Also coming up today
There’s still time for a few important data releases before the markets shut down for Christmas. We find out how many Americans filed new unemployment claims this afternoon – a gauge of the health of the US labour market.

The agenda
• 7am GMT: UK public finances for November
• 11am GMT: CBI distributive trades report on UK retail sector
• 1.30pm GMT: US weekly jobless claims figures

We’ll be tracking all the main events throughout the day ...
Opinion
May general election?  
The economic case for going early (and clinging on)
The economic case for going early (and clinging on)
Economics  
Drop in UK inflation is welcome but does not erase two years of pain
UK inflation  
Which goods and services have changed most in price?
Q&A  
What does the surprise drop in UK inflation mean for you?
Elon Musk says letting workers unionise creates ‘lords and peasants’. What?
 

Marina Hyde

Guardian columnist

Person Image

Hello to you, dear reader!

When the former Albanian dictator Enver Hoxha delivered his New Year message back in 1967, he pulled the cord marked “truth bomb”. “This year will be harder than last year,” he declared. “It will, however, be easier than next year.” I mean … on the one hand: thanks for not sugar-coating it, Enver. On the other: way to kill the party buzz, you monster!

I don’t want to murder the atmosphere (or indeed any dissidents) by reminding you of the news year you’ve just lived through – or by warning you of the news year you’re about to live through. It’s not big, it’s not clever, and it’s sure as heck not seasonal.

But I will say, pointedly, that our reporting feels particularly necessary in dark times – even if we have had only one prime minister this year.

If you can, please help support the Guardian, so as to keep it open for everyone. I can’t tell you how much it would be appreciated. A free press is needed now as much as it has ever been – and on some days, more than it has ever been.

In return for this support, I am formally* bestowing upon you the right to refer to yourself – in conversation, in the pub, and on any business cards you may care to have printed up – as “a newspaper baron”. Face it: if you pay to support a news organisation, then you ARE to all intents and purposes a newspaper baron. Just enjoy it! All the others do.

With that, it simply remains is for me to wish you a very happy holidays, and a splendid new year. Goodness knows you’ve earned it.

*not formally

 
Media
Donald Tusk  
Poland’s new government sacks state TV, radio and news bosses
Poland’s new government sacks state TV, radio and news bosses
TikTok  
Moderators struggling to assess Israel-Gaza content, Guardian told
Spotlight
Less fun and games for UK shops at Christmas 2023
Toys  
Less fun and games for UK shops at Christmas 2023
As struggling households cut the number of gifts retailers reckon 5m fewer toys will sell in this year’s traditional ‘golden quarter’
Popular on business
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