Key events
Labour to unveil plans for City at forthcoming business conference
Labour will use its sold-out business conference next week to unveil the party’s City policy plans, the Guardian can reveal, as it tries to win over hundreds of UK executives before a general election.
More than 500 bosses from across British finance will gather in London on 1 February for the event, where opposition leaders including Sir Keir Starmer, his shadow chancellor, Rachel Reeves, and the shadow business secretary, Jonathan Reynolds, plan to “showcase Labour’s offer to business”.
The party is hoping that the conference – which sold out within two hours in the autumn – will demonstrate its “commitment to work hand in glove with the business community” and will use it as an opportunity to reveal its business policy plans after two major industry reviews.
The Guardian understands that will include Labour’s much-anticipated strategy for the City and will detail how the party plans to harness the strength of the UK’s £275bn financial and professional services sector.
Introduction: IFS says next UK government faces worst fiscal inheritance in 70 years; markets eye ECB rates decision
Good morning, and welcome to our rolling coverage of business, the financial market and the world economy.
The next UK government will face the toughest tax and spending decisions in 70 years, according to a leading think tank.
The Institute for Fiscal Studies said a combination of high interest rates and weak growth means whoever wins the general election later this year will find it “more difficult to reduce debt as a fraction of national income than in any parliament since at least the 1950s.”
It warned that Jeremy Hunt’s much-predicted budget tax cuts – he will unveil the budget on 6 March – risk being reversed or paid for by spending cuts, and urged the Conservative and Labour parties to “level” with voters before polling day.
Chinese stocks rallied after a cut in Chinese bank reserve requirements, releasing about a trillian yuan for lending. The Shanghai Composite rose 3%, after hitting a four-year low on Monday, and Hong Kong’s Hang Seng was up 2% while Japan’s Nikkei was little changed. Investors have been selling Chinese equities for months, amid worries about the sluggish economy and the country’s property crisis.
The European Central Bank is meeting today and will announce its interest rate decision at lunchtime. It is not expected to change its main interest rate of 4.5%. Minutes from the December meeting showed policymakers were pushing back on aggressive market expectations for rate cuts, and ECB president Christine Lagarde is likely to face questions on their timing during the press conference.
Last week, she said the central bank could cut rates in the summer, during an interview with Bloomberg at the World Economic Forum in Davos.
The Agenda
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9am GMT: Germany Ifo business confidence for January
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11am GMT: UK CBI retail sales survey for January
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1.15pm GMT: ECB interest rate decision (forecast: no change)
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1.30pm GMT: US Durable goods for December (forecast: 1.1%)
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1.30pm GMT: US GDP for Q4 (forecast: 2%)
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1.45pm GMT: ECB press conference
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3pm GMT: US New home sales for December
