The Bank of England will hold Monetary Policy Committee meetings in Leeds from next year, marking the first time rate-setters will gather outside London since the bank gained independence over monetary policy. The inaugural northern meeting may occur in December but is more likely on 18 March, according to a person familiar with the discussions. The MPC will convene in Leeds only for decisions not accompanied by full economic forecasts, meaning four of its eight annual meetings. The move aligns with Prime Minister Andy Burnham's focus on northern England, including establishing the Number 10 North office in Manchester. The BOE has operated a Leeds branch since 1827 and announced plans for a northern hub in 2021. The bank aims to base one in 10 staff in Leeds by 2027, moving to new offices at Capitol House in 2028.

The UK finds itself caught between ambition and caution in the global AI race. The Bank of England plans to ease capital rules to encourage lending and investment, but simultaneously warns of risks from excessive AI stock purchases. Governor Andrew Bailey cited concerns about a potential "triple whammy": oversized investment in AI stocks, slower adoption than predicted, and rapid development leaving some companies behind. The relaxed requirements, originally implemented after the 2008 financial crisis, are expected to trigger fresh lending as investors seek AI opportunities. Despite these warnings, Bailey recommended no new policies to guard against high valuations threatening financial stability. The situation reflects Britain's struggle to catch up with the US and China whilst remaining wary of potential bubbles. UK banking regulators face mounting pressure to stimulate economic growth, even as the central bank acknowledges that "the risk of a sharp correction in equity markets remains high".

British businesses expect to increase prices by 4.0% over the next 12 months, down from a two-year high of 4.4% in April, according to the Bank of England's Decision Maker Panel survey. The moderation follows the initial shock from energy price rises caused by the US-Israeli war on Iran in late February. The survey of over 2,000 companies showed 57% expect to raise prices in response to energy costs, down 7 percentage points from April, whilst 68% anticipate lower profit margins. Companies also plan to reduce employment by 0.4% over the next year, the largest planned cut in six months, whilst wage growth expectations held steady at 3.4%. Financial markets expect the BoE to maintain rates at 3.75% this month.