• The Bank of England cut interest rates on Thursday, but four of its nine policymakers - worried about high inflation - sought to keep borrowing costs on hold.
• Difficulty reaching an agreement meant the Monetary Policy Committee had to hold two rate votes for the first time in its history. With the MPC split over how to respond to an inflation rate that the BoE forecasts will soon be double its 2% target and a recent worsening of job losses, Governor Andrew Bailey and four colleagues backed lowering the Bank Rate to 4% from 4.25%
• But that was only after a first round of voting ended in a 4-4-1 split with external MPC member Alan Taylor initially backing a half-point cut. The four members of the MPC who backed keeping rates on hold included Clare Lombardelli, the deputy governor for monetary policy, who broke from the majority for the first time. Chief Economist Huw Pill also voted to keep the Bank Rate at 4.25%.
• The BoE repeated its guidance about "a gradual and careful approach" to further cuts in borrowing costs but added a new line to its message on the outlook, hinting that its run of rate cuts might be nearing an end.
• A halt to the process of cutting rates would be a blow for finance minister Rachel Reeves and Prime Minister Keir Starmer, who have struggled to meet their promise to voters to speed up Britain's slow economic growth. Bailey said the decision to cut rates for the fifth time since August last year was "finely balanced," although he thought they were still on a downward path.

(Source: Reuters)

• The House of Representatives has approved the first supplementary estimates of expenditure for the 2025/26 fiscal year. The Estimates have now moved from $1.26Tn to $1.27Tn.
• In her remarks, Minister of Finance and the Public Service (MFPS), Hon. Fayval Williams, said the estimates will facilitate the allocation of $58.1Bn to ministries, departments, and agencies (MDAs).
• She informed that of this sum, $55.6Bn is earmarked to cover additional salaries and allowances arising from agreements between the Government and public-sector unions and staff associations during fiscal year 2024/25. “This supplementary also takes into consideration the $1.1Bn for the three per cent subsidy on residential electricity usage as expenditure in the central government expenditure budget, and $1.4Bn for the acquisition of 110 buses for the rural school bus service,” the Minister stated.
• Additionally, she said it “facilitates the transfer of $35.3Bn from the contingencies allocation under the Head 20000¹, MFPS, to assist in financing the additional expenditure of the MDAs. It will also assist with the reprioritisation of expenditure totalling $12.3Bn within the 2025/26 approved Budget to assist in financing the additional spending of the MDAs”.
• Mrs. Williams stated that approximately $48.1Bn of the committed funds fall under the ‘compensation of employees’ category. This category includes $23.6Bn allocated for advancement along substantive salary bands for eligible central government employees, effective April 1, 2025, in accordance with the agreement reached with the Jamaica Confederation of Trade Unions (JCTU).
• She further highlighted that while those are some major numbers, there will be a redirection of funds to continue to have a balanced budget for this supplementary.

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^[1]A Budget Category Under the Ministry of Finance and the Public Service.

• Caribbean Cement Company (CCC), on Thursday (June 26), officially commissioned its $6.7Bn (US$42Mn) Debottleneck Project. The project is designed to enhance the production capacity and operational efficiency at the company’s Rockfort facility, which is pivotal in meeting the growing local demand for cement, and to support the island’s infrastructural development goals.
• Speaking at the commissioning ceremony held at the facility’s Rockfort location, Prime Minister Dr. the Most Hon. Andrew Holness emphasised that this significant investment will advance Jamaica’s goals of industrialisation, self-sufficiency, and long-term economic growth.
• He noted that as local demand for cement continues to exceed supply, the country has increasingly been forced to rely on imports, leading to higher costs, delays, and greater dependence on external supply chains, according to the Prime Minister. He added that these vulnerabilities have been exacerbated by the global disruption caused by the pandemic-related logistics breakdown, as well as inflationary pressures and geopolitical tensions.
• This project is expected to stabilise Carib Cement’s kiln operations, maximise clinker production, and help meet Jamaica’s cement needs through domestic output. This is expected to bolster production capacity while contributing to the long-term growth of Jamaica’s construction and manufacturing sectors.
• Additionally, it positions the company to become a net exporter of cement to the wider Caribbean region. Currently, CCC exports primarily to CARICOM member states and has recently begun shipments to the Turks and Caicos. However, exports contribute less than 1% of total revenues, indicating significant untapped potential. This expansion presents an opportunity for CCC to grow its revenue base in regional markets, ultimately driving higher group revenues and improved profitability.

• CCC’s stock price has decreased by 0.8% year-to-date, closing at $83.33 as of Wednesday. At this price, the stock is trading at a price-to-earnings (P/E) ratio of 11.9x, which is lower than the Main Market Energy, Industrials and Materials Sector average of 18.6x.

(Sources: JIS & NCBCM Research)