Time to cut

Hi ZipLawyer! Today’s Memo:

✂️ BoE rate cut?
☢️ UK goes nuclear
🏳️ Honda-Nissan merger fail
📱 Baker McKenzie, BCLP lead on 5G claim
🛜 Simmons heads BT deal

Rate Cut Incoming?

All eyes are on the Bank of England (BoE) today as it announces its interest rate decision. No shocks expected—markets are betting on a 0.25% cut to 4.5%. But it’s not all good news.The BoE will downgrade its 2025 GDP growth forecast from 1.5% to around 1%, raising concerns over Rachel Reeves’s budget plans. More cuts could be on the way but the BoE will likely hold off until political uncertainty calms down.

What's a rate cut?

A rate cut is when the BoE lowers interest rates, making borrowing cheaper and saving less rewarding.

Think of interest rates like the cost of renting money. When the BoE cuts rates, it's like your landlord reducing your rent—it becomes cheaper to borrow money (loans, mortgages) but less attractive to save money (lower returns on savings). The goal? To encourage spending and investment, helping the economy grow.

Ok, so what happens after the BoE's decision?

• Pressure on Government Finances – A weaker growth outlook will challenge Rachel Reeves’s fiscal targets, potentially leading to spending cuts in March if updated forecasts show the budget at risk.
• Lower Borrowing Costs, But Limited Immediate Impact – Interest rate cuts will reduce borrowing costs for businesses and homeowners, but a single quarter-point cut won’t provide an instant confidence boost or significantly stimulate the economy.
• Long-Term Growth Uncertain – While Reeves has announced economic growth initiatives such as Heathrow expansion and planning reforms, their benefits will take years to materialise, leaving the government dependent on BoE policy to manage short-term risks.

UK Goes Nuclear

The UK is tearing up planning rules to speed up nuclear plant approvals, as Keir Starmer pushes for economic growth, lower energy bills, and net-zero targets. Developers are no longer limited to just eight designated sites, opening the floodgates for small modular reactors and larger gigawatt-scale projects. Starmer blames years of inaction for Britain’s energy insecurity, vowing to ditch reliance on Russia. The plan also fast-tracks approvals for reactor designs already used abroad—because why reinvent the wheel when you can just build it faster?

Failing merger

The $58 billion Honda-Nissan merger is on the brink after Nissan’s board balked at Honda’s surprise bid for full control. Talks originally focused on a joint holding company to preserve Nissan’s brand, but Honda’s "take it or leave it" offer demands full ownership—a hard no from Nissan. Renault, which owns 36% of Nissan, is also nudging Nissan to hold out for a higher premium if Honda wants control. Some suspect Honda wants an exit, while Nissan’s shaky finances leave it vulnerable. A final decision is due mid-February—if the deal survives that long.

Baker McKenzie, BCLP lead on 5G claim