Money blog: Aldi tactic 'scuppers Tesco sale'; interest rate decision coming | Money (2024)

By Daniel Binns, business reporter

There's not much major movement on the London stock market this morning ahead of the Bank of England's announcement on interest rates at midday.

The Bank is widely expected to hold rates at 5.25% for the seventh time in a row.

The FTSE 100 is slightly up by nearly 0.2%, while the FTSE 250 has risen almost 0.3%.

Rolls-Royce is among the top climbers, with its stock rising by 2% in early trading.

Sainsbury's has also gained almost 1% after the supermarket giant announced it plans to sell most of its banking business to NatWest.

On the flip side, top fallers include water firm United Utilities, which has slipped 2% on Thursday morning.

On the currency markets, £1 buys $1.27 US or €1.18.

The cost of a barrel of Brent Crude has topped $85 (£67) this morning, as the price of oil continues to creep slowly up.

Aldi has undercut Tesco on some of its rival's claimed price matches, according to The Grocer.

As a result of Aldi dropping its prices, Tesco has pulled certain products from its campaign, according to the digital magazine, and in some cases it is rendering the supermarket's price match claims incorrect.

According to The Grocer, two variants of Aldi's Lunex Ultra sanitary towels (Night and Long) were "price matched" at 45p by Tesco this week, while Aldi had reduced them to 42p in its weekly permanent price drops.

In a similar vein, the magazine said Aldi's Bon Appetit Pains Au Chocolat eight-pack was price matched by Tesco at £1.35 on 6 June - before being cut to £1.29 at Aldi.

Tesco's equivalent had disappeared from Tesco's campaign by 13 June.

"Our customers know that only one supermarket offers Aldi prices on every product and that's Aldi," an Aldi spokesman told The Grocer.

"Other supermarkets just can't match us on that."

Tesco said prices were checked twice-weekly and the most recent check on the Lunex sanitary towels found them to be 45p in more than half of Aldi stores surveyed.

A spokesman told The Grocer products included may vary by week, with some removed and others added.

Basically, the Bank of England is the UK's central bank.

It is different from a bank you would come across along the high street and does not hold accounts or make loans to the public.

Instead, the Bank issues banknotes that you spend and it also sets the official interest rates of the UK (otherwise known as the Bank/base rate), which directly influences savings and mortgages.

The Bank is set to make one such decision today, with markets expecting rates to be held once again at 5.25% - despite yesterday's positive inflation announcement...

When did the Bank become independent?

The Bank was founded in 1694 and was owned by various shareholders until it was nationalised in 1946.

It remains owned by the UK government today - but its decision-making was made independent in 1997 by Gordon Brown, the chancellor at the time, to increase confidence in the UK economy and stop politicians from influencing monetary policy for political or electoral reasons.

What is the Bank's Monetary Policy Committee and who sits on it?

The Monetary Policy Committee (MPC) decides the Bank rate.

This generally happens every six weeks, so eight times a year, and the next meeting is today - hence which we're resurfacing thisBasically.

The committee is made up of nine independent members who all have expertise in economics and monetary policy.

There are also external members that ensure the MPC benefits from thinking and expertise from outside the Bank of England.

A representative from HM Treasury also sits with the MPC at its meetings. The Treasury member makes sure the MPC is briefed on government policies, but they are not allowed to vote.

Does the Bank have any other responsibilities?

• The Bank produces £5, £10, £20 and £50 banknotes;
• It guards the value of money by keeping prices stable;
• It keeps the financial system stable by maintaining a close watch on any risks and taking action;
• The Bank also regulates and supervises all the major banks, building societies, credit unions, insurers and investment firms.

Why is it called the Bank of England when it covers the whole UK?

Quite simply, it has never changed its name since it was founded.

It was created in 1694 after a Scotsman named William Paterson realised the nation's finances had no real system of money or credit.

Under his direction, a successful scheme was launched in which £1.2m was loaned to the government from funds raised by subscribers who were then incorporated into the governor and company of the Bank of England.

The money was used to support the English government in its war against France.

It wasn't until the 19th century that the Bank took on the role of central bank.

What is in its vaults?

About 400,000 bars of gold.

These are worth more than £200bn, making the Bank of England the second-largest keeper of gold in the world - behind the New York Federal Reserve.

The gold is kept in nine carefully guarded underground vaults.

Each bar costs hundreds of thousands of pounds, although the value can go up and down.

The Bank of England's customers - who include the UK government, banks and other governments around the world - can trade their gold bars with other customers.

When a customer trades gold it doesn't usually move - instead the name of the owner will change on the Bank's system.

Not many people are allowed to visit the vaults, but the King and the late Queen have seen them.

Has anyone ever stolen any gold from the Bank?

The Bank says no gold has been stolen from its vaults, but there was a lucky escape in 1836 after a sewer worker doing repair work accidentally discovered an old drain that ran directly below the gold vault.

He sent anonymous letters to the directors of the Bank, saying he had access to their gold and offering to meet them in the vault at an hour of their choosing.

When the directors gathered one night in the vault, a noise was heard from beneath the floor and the man popped up through some of the floorboards.

A stocktake was taken afterwards, and it became clear he had not taken any gold.

The Bank then decided to reward the sewer worker for his honesty by giving him £800 - the equivalent of about £76,000 today.

Barclays has announced a major revamp of its Blue Rewards scheme - which will remove its £5 a month cash bonus.

All other product cash rewards for members are being axed as part of the shake-up as well.

As a result, customers will no longer earn rewards worth up to £15.50, including:

• £3 for residential mortgages
• £1.50 for life insurance
• £5 for life plus critical illness
• £1 for Barclayloan

The changes will take effect from 4 September.

Despite the changes, Barclays customers will still need to pay the £5 monthly fee to be a member.

Not all the rewards are being cut though - the membership will get you Apple TV+ (worth £8.99 a month), a Major League Soccer Season pass subscription that usually costs £14.99 and access to a Rainy Day Saver account that comes with a 5.12% interest rate on balances up to £5,000.

The bank is also introducing a promotion increasing the value of cashback on Blue Rewards, with customers able to earn 1% on all eligible debit card spend up to a value of £5 each month.

The promotion runs from September to November and rewards are in addition to existing retailer cashback offers.

Barclays said the revamp would give customers fixed benefits worth up to £44 a month - an increase from £35.50 previously - in addition to cashback and higher interest on savings.

Manuel Baldasano, head of customer and digital at Barclays UK, said: "We've been evolving Blue Rewards based on what we know our customers value and, with entertainment high on their wish list, we're delighted to introduce top quality shows from Apple TV, in addition to our best savings rates and cashback programme, all for the same £5 monthly fee.

"Our refreshed Blue Rewards proposition, which sits alongside our fee free account and Premier banking, means that customers can choose what works best for them."

Every ThursdaySavings Champion founder Anna Bowesgives an insight into the savings market and how to make the most of your money...

The savings market is a little bit unpredictable at the moment. Some rates are rising and others are falling - and some of the banks and building societies seem to be holding their breath, waiting to see what the Bank of England does today when it announces its latest interest rate decision. Add a general election to the mix and it's anyone's guess.

What we have seen recently is that the expectation for the base rate cut has been pushed back repeatedly, as inflation remained a little stickier than hoped.

Although in general the top rates on offer are still a little lower than they were at the beginning of the year, because the base rate cut has been delayed, there has been a resurgence of positive activity recently.

All of the top five easy access accounts are paying more than 5% once again, not much less than the top one-year fixed rate bonds and in fact more than the top paying longer-term bonds.

This is a really telling indication that interest rates are still expected to fall in the next few months and years and of course, easy access account rates are variable, which means that when the base rate does start to fall, you can expect the interest rates on these accounts to come down too.

The most amount of activity recently has come from one-year fixed rate cash ISAs - these rates have been increasing, narrowing the gap between the top fixed rate bonds and equivalent ISAs. In January, the top one-year bond was paying 5.5% compared to 5% on the top ISA. Today the top bond is paying a little less, 5.21%, while the top ISA is paying 5.05%, which is actually higher than in January - but that is the Virgin Money 1 Year Fixed Cash ISA Exclusive Issue 13, which needs you to hold or open a current account with Virgin to be eligible.

But the next best is with Shawbrook paying 4.89%, so the gap is still narrower.

The latest inflation figures support the idea that the base rate cut is coming, though whether that is today or at one of the next Monetary Policy Committee meeting in August or September is still to be seen.

Here are our top three tips for saving in these uncertain times...

Don't leave your cash to languish

After the latest inflation figures, it's probably harder to find an account that is paying less than inflation - as most are now offering interest rates that are keeping up with the rising cost of living.

But there are accounts out there that are not!

The Barclays Everyday Saver is paying just 1.66% AER (before the deduction of tax) on the first £10,000 in its Everyday Saver. If you have more, the interest rate you earn is diluted as the balance above £10,000 will earn just 1.16% AER.

And HSBC's Flexible Saver is paying just 2% on all balances from £1 - matching, not beating inflation. But you could be earning more than 5% if you were to switch to a better paying easy access account.

Use your ISA allowance

As more and more people are breaching their Personal Savings Allowance, they are turning to cash ISAs once again to shelter more of their cash savings from the taxman.

Don't wait until the end of the year to use up this valuable allowance.

The sooner your cash is in the ISA, the sooner it is earning tax free interest.

If you can - fix!

With the Bank of England base rate on the cusp of falling, if you can lock up some of your cash you could protect yourself from immediate interest rate cuts that we expect to see on variable rate accounts.

And, while a longer-term savings account might offer less interest immediately, it could be a wise idea to lock up some of your cash into these accounts, as it would be good to think that at least some of your savings is hedged against falling interest rates and enjoying a return that is higher than inflation for longer - something that is rarely the case.

Couriers for delivery giant Uber Eats will now pick, pack and pay for customer orders inside supermarkets.

Co-op, Sainsbury’s and Waitrose are among the supermarkets to sign up to the scheme in the UK.

Uber global head of grocery Susan Anderson said: "It's very clear that grocery shopping trends have fundamentally changed.

"Our busy lifestyles mean we physically go to the supermarket for a big shop less frequently and prefer to rely more on apps like Uber Eats to order fresh grocery ingredients when we want them."

The couriers can engage with customers in real time as they shop - so they can ask shoppers what substitutions they want if items are out of stock.

The driver will then checkout using a pre-authorised payment method before delivering in the normal fashion.

It's not yet clear how much more this will cost customers.

Wall Street's biggest bank is lifting Brussels' bonus cap for its London-based staff, weeks after rival Goldman Sachs fired the starting gun on a post-Brexit era in industry pay.

Sky News can reveal that JP Morgan Chase was in the process of notifying staff on Wednesday that it would preserve some elements of the remuneration packages introduced after the European Union's cap on variable pay came into force in 2014.

The system prevents material risk-takers (MRTs) working in lenders' operations in the EU from earning more than twice their fixed pay in variable compensation.

Sources said that JP Morgan, which employs 22,000 people in the UK, including roughly 14,000 in London, had decided to preserve a significant proportion of the fixed pay allowances used to calculate eligible employees' maximum bonuses.

You can read more of our City editor Mark Kleinman's storyhere...

McDonald's is ending its AI drive-thru trialafter customers reported errors in their orders - including bacon being added to ice cream.

The fast food chain's AI ordering system, developed by IBM, uses voice recognition to process orders and has been rolled out at more than 100 McDonald's locations in the US since 2021.

However, the technology's reliability has been called into question in recent months, with members of the public sharing videos of order mix-ups on social media.

As well as topping a dessert with bacon, the AIdrive-thru assistant added $211 (£166) worth of chicken nuggets to another customer's order.

Mastercard has announced it will be changing the way customers make paymentsto bring them a contactless experience at online checkouts.

The card company has said it wants all online transactions to be "tokenised" by 2030.

The way it will work means you will input your card details to pay for a product once and then you'll receive a "token" - a randomly generated number.

That number can then be used to make future payments, instead of you having to type in your card details each time.

"Contactless payments have made in-person payments seamless and ubiquitous – there’s an opportunity to bring that same experience to online checkout," it said in a statement.

Mastercard said the move will reduce fraud, improve approval rates, and make it online checkouts "faster and safer".

"As physical and digital experiences continue to converge, we're pushing the boundaries of what's possible," said Jorn Lambert, chief product officer at Mastercard.

"We're focused on bringing best-in-class digital services together to deliver more value, access and safety to our customers and the end-consumer."

It's been a really difficult few years for millions of families paying for their energy.

Many have expressed their anger and distrust in energy suppliers as a result of spiralling prices and shifting goalposts.

But there are signs that's beginning to change.

Overall customer satisfaction is up 10% since last year, a survey of 15,030 energy customers by Uswitch.com has revealed.

The survey found that Utility Warehouse and Octopus Energy were the best and second-best at providing customer service and for value for money.

However, satisfaction with value for money from providers overall is still 17% lower than before the energy crisis, according to the poll.

Uswitch also announced its top five cheapest energy tariffs - see below...

Every Wednesday we ask Michelin chefs to pick their favourite Cheap Eats where they live and when they cook at home.This week we speak toSofian Msetfi, executive chef at Mayfair's one-starred Ormer restaurant.

HiSofian - what are your picks for a meal for two for less than £40 in London?

Berenjakin Soho and London Bridge offers a traditional Persian dining experience - I'd recommend ordering a charcoal grilled kebab for that tables plus a selection of the mezeh-style sharing plates to accommodate a budget of £40 for two. A brilliant dining experience with high-quality and fresh ingredients.

BAO(with locations around London) is known for its creative take on Taiwanese street food. They offer some of the best bao buns in the city which start from just £6, plus there's affordably priced small plates, allowing for a diverse tasting experience without overspending. The restaurants also have a weekday set menu with three courses for £15, which is a steal.

Secret Sandwich Shopin Notting Hillelevates the humble sandwich to new heights - the sheer size of theJapanese Wanpakusandwiches are incredible and so filling. It's a great find, hidden behind a secret door in Notting Hill, with the signature "Secret Sandwich" priced at £9, meaning you can each get a sandwich plus a generous selection of classic snacks and even some Japanese drinks for £40.

What's your go-to cheap meal at home?

A braised lemon chicken with green olives. You can use chicken thighs or legs in this recipe (which are often much cheaper). It's easy and quick, everything goes in the dish together and cooks at the same time. One of my favourite tips is to use some of the olive brine from the jar when cooking as it really enhances the flavour of the dish.

We've spoken to lots of top chefs and bloggers - check out their cheap eats from around the country here...

Taylor Swift has reportedly ordered 45 large kebabs for her team ahead of her Wembley Stadium show.

The singer is set to perform in front of up to 90,000 fans on Friday in the first of eight Eras Tour shows at the London venue.

But before that, her staff will be tucking into £450-worth of chicken donor kebabs made by Kentish Delight, according to The Sun.

The takeaway restaurant is thought to be a favourite of Taylor's, having featured in the music video for End Game in 2017.

"Taylor adds garlic sauce to hers, as well as heaps of salad," a source told The Sun.

The newspaper previously reported the star bought hundreds of Greggs sausage rolls, steak bakes and bakery goods for her team when performing in Edinburgh.