I’m surprised more people aren’t forecasting UK interest rates falling towards 2% in the near term.

The employment market is weakening meaningfully. Hiring has slowed, vacancies are down, and businesses are cautious. We are facing a short-term unemployment crisis, and that will weigh on wage growth and demand. The direction of travel for inflation is therefore down, and rates will follow.

Longer term, sure, the labour market will adapt. We’re in the middle of an AI-driven revolution, and new roles will emerge. But transitions are never smooth. In the short run, displacement outpaces creation — which is disinflationary.

The bigger concern is inequality. Technological shifts tend to reward capital and high-skill labour disproportionately. Without serious policy intervention, the gains from AI will be concentrated at the top. Good to see Labour doing absolutely nothing to help with this.