British private-sector employers expect to raise staff pay by an average of 2.5% over the next 12 months, well below the likely rate of inflation, according to a survey that could ease worries at the Bank of England about the risk of a wage-price spiral, Reuters reported. The quarterly figures from the Chartered Institute of Personnel and Development (CIPD) suggested that companies were taking only cautious steps to battle growing recruitment difficulties.

Chancellor of the Exchequer Rishi Sunak has set aside a 15 billion-pound ($20 billion) fund that could be used for tax cuts before the next election if the pandemic is brought under control, analysis of U.K. budget figures shows, Bloomberg News reported. Sunak put the money aside in a reserve for unforeseen emergencies in a spending review published with the budget last month. While all chancellors maintain such a cushion in case spending overshoots, Sunak’s is multiples larger than that of his predecessors.

The Bank of England and the Treasury are to launch a formal consultation on a UK central bank digital currency, BBC.com reported. This evaluation of the design and possible benefits of a new kind of digital money is a further step towards its possible creation. The currency, for use by households and businesses, would sit alongside cash and bank deposits, rather than replacing them. No decision has been taken on whether to have such a currency in the UK.

U.K. food prices are rising at their fastest pace since August 2020, figures from data firm Kantar suggest, as supply chain disruption continues, BBC.com reported. Grocery inflation rose to 2.1% in October - the highest rate since last year, when retailers were cutting promotions amid the Covid pandemic. Last week, the Bank of England confounded market expectations by holding interest rates. But with overall inflation heading for about 5%, a rate rise is expected soon. Supply chains have been under pressure from factors including the pandemic and a shortage of lorry drivers.

Bank of England Governor Andrew Bailey said on Monday that the rise of crypto assets was helping illegal activity, Reuters reported. "I'm afraid that the advent of digital means of payment, and in particular crypto assets, I'm afraid that the evidence suggests, and we see this, is that it is providing another means of payment for people who want to conduct criminal activity," Bailey said during an online question-and-answer session organised by the BoE. Read more.

Covid support measures from the U.K. government were so speedily introduced that they created a fertile breeding ground for wrongdoing. Now, with schemes closed and reports last week indicating that a third of small businesses are “highly indebted”, we may begin to see much crime exposed as a result of insolvency, according to a commentary in The Times. Dealing with the fallout of this effectively and fairly is an immense and multifaceted task. In some cases, the solution is clear-cut; in others, the courts may be asked to stretch existing principles of law.

The Bank of England’s decision Thursday not to raise interest rates sent bond markets into a tizzy, leading to the biggest moves in U.K. bond yields in years, the Wall Street Journal reported. The bank has said that it expects to raise borrowing costs soon, moving ahead of the Federal Reserve and other major central banks in withdrawing stimulus to tame inflation. But the bank held fire Thursday, surprising investors who had become convinced an increase was coming.

Airline Avianca Holdings will move its domicile to the United Kingdom and its stock will no longer be traded on the Colombian stock exchange, the company said on Wednesday, a day after a U.S. court's approval of the company's restructuring plan, Reuters reported. Colombia's flag carrier had filed for chapter 11 protection at a U.S. court in New York in 2020 amid the coronavirus pandemic. It now expects to exit the measure by the end 2021, after receiving around $2 billion in new financing under a debt-for-equity deal.

Inmarsat’s private equity owners are considering an exit from their investment in the U.K. satellite communications group, Bloomberg News reported. Apax Partners and Warburg Pincus have held early discussions about a possible sale of the business after receiving approaches from potential suitors, the people said, asking not to be identified discussing confidential information. An exit from Inmarsat would mark a quick turnaround for its owners, which took the company private in 2019.

U.K. Chancellor of the Exchequer Rishi Sunak has given a personal guarantee that, short of a crisis, debt will shrink as a share of the economy from 2024 onwards, Bloomberg News reported. In his budget last week, the finance minister set a rolling three-year target to bring down the pandemic-bloated debt burden. But he has faced criticism that the rule would never bite because it moved forward every year.