The remit for the Monetary Policy Committee (MPC) requires an exchange of open letters between the Governor of the Bank of England and the Chancellor of the Exchequer if inflation moves away from the target by more than 1 percentage point in either direction.

As set out in the remit, the open letters are published alongside the minutes of the first MPC meeting that follows the release of the CPI data, or within seven days of the publication of the data if the MPC meeting has already commenced.

• Parts of the North East escalated to an area of intervention
• New restrictions introduced across the region to curb rising infection rates, agreed in collaboration with local leaders
• Regulations and guidance to come into force on Friday

Following further discussions with local leaders, the Health and Social Care Secretary, NHS Test and Trace, the Joint Biosecurity Centre (JBC), and the Chief Medical Officer for England have agreed to escalate parts of the North East – namely, Northumberland, North Tyneside, Newcastle-upon-Tyne, Gateshead, South Tyneside, Sunderland and County Durham – to areas of national intervention.

From Friday 18 September, regulations will ban the following:

• residents must not socialise with other people outside of their own households or support bubble in private homes and gardens
• hospitality for food and drink will be restricted to table service only
• late night restriction of operating hours will be introduced, with leisure and entertainment venues required to close between 10pm to 5am

Residents are also advised to adhere to the following guidance to further reduce rates of infection:

• not to socialise with other people outside of their own households in all public venues.
• only to use public transport for essential purposes, such as travelling to school or work
• take holidays only within your own household or support bubble
• avoid attending amateur and semi-professional sporting events as spectators

Changes come as cases in the North East have risen to the second highest in the country, after the North West. This decision has been made in close collaboration with local leaders.

Health and Social Care Secretary, Matt Hancock said:

After seeing cases in the North East rise to a concerning level, local authorities requested support for tighter restrictions and we have taken swift action to accept their recommendations.

We do not take these decisions lightly but I know the people of the North East will work together and break the chains of transmission.

I urge those from affected areas: please, get a test if you are symptomatic, stay at home if you are required to self-isolate, and think: hands, face, space. This is the only way for us to return to a more normal way of life and avoid further restrictions.

These changes are in addition to the nationwide 6-person limit on social gatherings that came into force on Monday. This rule is in place across the country and will sit alongside additional restrictions in some local areas.

Public Health England, the JBC and NHS Test and Trace are constantly monitoring the levels of infection and other data on prevalence of the virus across the country. As has always been the case, measures are kept under constant review to reduce the spread of the virus and save lives.

The next year will see the expiry of remedies in place under a set of binding commitments that the European Commission accepted in 2010 after a competition investigation into the Atlantic Joint Business Agreement (AJBA). Five airlines are currently signed up to the AJBA: 3 members of the International Airlines Group (British Airways (BA), Iberia and Aer Lingus), and American Airlines (AA) and Finnair. BA and AA are the key UK and US parties to the AJBA.

Under the terms of the AJBA, these airlines have agreed not to compete on routes between the UK and the US. The 2010 commitments were designed to protect competition by requiring the AJBA airlines to release slots to competitors and provide other measures supportive of competition on certain routes.

The Competition and Market Authority’s (CMA) investigation to date has examined the competition impact on UK-US routes from the AJBA. It assessed the competition from other airlines on each route and the benefits that the AJBA may deliver including improved schedules, connections and new routes. The CMA identified possible competition concerns on routes between London and each of Boston, Chicago, Dallas, Miami and Philadelphia.

In May 2020, the CMA consulted on a new set of binding commitments offered by BA and AA to try to resolve the CMA’s competition concerns. The airlines offered to make slots available at London Heathrow or Gatwick airports for up to 10 years as part of a wider package of measures.

Consultation respondents referred to the exceptional circumstances brought about by the coronavirus (COVID-19) pandemic and some requested that the CMA should ‘roll-over’ the 2010 commitments and/or pause its investigation until the sector is in recovery. Moreover, there remains considerable uncertainty about the extent and duration of the impact of the pandemic on the transatlantic aviation sector and this has increased materially since May.

The CMA cannot be confident that its assessment of competition concerns, and any remedies that might address them, would adequately reflect the post-pandemic state of competition in the longer term. It has therefore decided not to accept the proposed 10 year binding commitments. Instead, the CMA will keep its investigation open and has imposed ‘interim measures’, effectively extending the terms of the 2010 commitments for an additional 3 years until March 2024, by which time it is expected that the airline sector should be in a more stable position. Airlines currently operating slots on London to Boston, Dallas and Miami routes pursuant to the 2010 commitments will continue to operate these slots for an additional year, until March 2022 at which point a tender process will take place for these slots for the remaining 2 years. A tender process will be undertaken this autumn in relation to a second slot on the London to Boston route.

The CMA plans to complete its investigation prior to March 2024 and, if appropriate, put in place a longer-term remedy, before the interim measures expire. It will have responsibility for ensuring the ongoing implementation and enforcement of the measures during this period.

Ann Pope, Senior Director, Antitrust at the CMA, said:

The CMA launched this investigation because we were concerned that, with the expiry of the current commitments, consumers might lose out. Without the CMA’s measures the competition concerns on the key routes between the UK and the US remain. On some of these routes there are either few or no other airlines offering direct flights to passengers.

It is clear from market developments and responses to our consultation in May that we cannot be confident that the commitments we had been considering will resolve our competition concerns at this time. We are therefore imposing interim measures to extend the effect of the current commitments until the CMA can complete its review of the agreement once the sector is in recovery.

More information on this investigation can be found on the Atlantic Joint Business Agreement case page.

Notes to editors:

1. The CMA is today publishing a decision to impose interim measures directions on the AJBA under section 35 of the Competition Act 1998 and a decision not to accept the commitments offered by the AJBA in May 2020. This is the first time that the CMA, since its formation in 2014, has imposed interim measures.
2. The imposition of interim measures directions is not a finding of infringement under the Competition Act 1998 or the TFEU. The AJBA has made representations to the effect that their position on the issuing of these interim measures should not be construed as implying that the AJBA agrees with any preliminary concerns identified by the CMA in its ongoing investigation.
3. The agreements relating to the slots serving Boston, Dallas and Miami from London Heathrow that are currently being used by Delta and Virgin Atlantic will be extended for a year (i.e. to March 2022). These slots will then be tendered for a further 2 years if there is an application from an airline that is independent of and unconnected with the AJBA parties – otherwise Delta and Virgin may continue to use the slots for the remaining 2 years. In addition, a tender will also be held for an additional slot to serve Boston from London Heathrow or Gatwick for a period of 3 years. This second Boston slot had previously been operated by Norwegian, which surrendered the slot and it is now available for use from March 2021.
4. The interim measures directions do not include the route between London and Philadelphia. The European Commission in its decision in the AA/US Airways merger put in place remedies to resolve its merger-related competition concerns in relation to that route. The operation of these remedies remain the subject of ongoing court proceedings before the General Court of the European Union and no competition has operated on this route since 2018.
5. The CMA has engaged with the European Commission and the US Department of Transportation throughout the investigation to date.