Kevin Warsh has demonstrated his credibility to the financial markets. 

Despite Donald Trump’s desire for America to have low interest rates, the US Federal Reserve chairman went ahead last night and presided over a quarter of a percentage point rise in the key federal funds rate to a range between 3.75 per cent and 4 per cent.

The first hike in three years comes against a background of surging energy prices and an economy buoyed by tech, AI innovation and private credit.

The stitch in time increase, by a unanimous 12 to zero vote, is paradoxical.

Warsh’s predecessor, Jay Powell, refused to lower rates despite pressure from Trump but avoided an even more divisive clash by raising them.

Warsh and the Fed expressed a determination to bring US inflation back to the 2 per cent target.

That is a commitment which the Bank of England makes at each of its interest rate-setting meetings. So far it has eschewed aggressive action.

Virtually no analysts are predicting the Bank will lift bank rate from 3.75 per cent today. Rate-setters will take comfort from a weakening jobs market, flattening earnings and modest core inflation.

Over the horizon, the dangers are there for everyone to see. A Bloomberg analysis points to energy prices rising by a terrifying 25 per cent in January 2027.

British food prices are on the march following the summer drought, extreme weather, fertiliser and other costs, and projected to hit 6.6 per cent next year.

Headline inflation climbed to 3.1 per cent in August. So far, higher prices have yet to feed into the economy but the longer it takes for the Bank of England to play catch-up, the more danger of the cost of living getting out of hand.

The Bank would be advised to get ahead of the curve rather than wait until later in the year to act. It could do worse than take a lead from the Fed.

Andy Burnham should watch and listen to erstwhile Bank of England grandees.

Former Bank chief economist Andy Haldane will command the headlines for his assault on Labour mark two for ‘tax-and-spend’ socialism with TikTok videos.

As fascinating is ex-governor – now Canadian prime minister – Mark Carney.

His trade war with the US has awakened his inner capitalism learned in his long apprenticeship at Goldman Sachs.

Reaching out to the EU is one manifestation. However, he ought to know from his stretch at the Bank that sclerotic rule-making undermines much of what Brussels does.

More fascinating is Carney’s embrace of Thatcherism in the shape of a low tax and privatisation agenda. He is slashing corporation taxes by allowing firms to write off new capital investment.

The effective marginal rate of tax for new business investment falls from 13 per cent to 6.4 per cent, the lowest in the G7.

The ‘Productivity Mega Deduction’ is intended to incentivise all new investment, including oil and gas producers. 

This as the UK is still pussyfooting over North Sea licences and punishing carbon fuel extraction with brutal taxation.

While Labour in Britain takes more state control over steel, water and other projects, Canada is moving in the opposite direction. 

It is putting the vast country’s airports in Toronto, Montreal, Calgary and Vancouver up for sale in the face of trades union opposition.

Pity that Carney, who acquired British citizenship and has an English spouse, didn’t seek a post-Bank career in UK politics rather than his native Canada.

Does Britain want a gambling industry or not?

On the day Entain, owner of Ladbrokes and Coral, axes 400 jobs to save costs and warns of much worse to come, the Lords liaison committee demands a comprehensive ban on gambling advertising, arguing there would be public health benefits.

But it also risks demolishing a world-leading online industry which has gone global and is under siege from former Chancellor Rachel Reeves’ tax increases.

In a digital world, the idea that Britain can move the dial on gambling addiction is fantasy. Bolstering self-regulation should be the focus.