Category Archives: Economic policy

How a spring UK budget could fire the starting gun for an early election

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UK economic prospects are bleak but an agenda-setting fiscal event such as sweeping tax cuts in March offers another roll of the dice

To grasp the nettle, or wait in the hope that things somehow miraculously improve. This is the choice Rishi Sunak will be weighing for the next general election, as the Conservatives limp towards the finishing line of another challenging year.

After Jeremy Hunt announced the government would hold an earlier than anticipated budget, with a date set for 6 March, the possibility of a poll in May, in the afterglow of some electioneering tax cuts, is clearly being given considerable thought.

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‘Prison or bullet’: new Argentina government promises harsh response to protest

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President Javier Milei and his allies are preparing new security guidelines in anticipation of protests against currency devaluation

Human rights activists in Argentina have expressed consternation over new security guidelines to crack down on an anticipated wave of protests after the incoming government of libertarian president Javier Milei devalued the country’s currency by more than 50%.

Protesting individuals and organizations will be identified with “video, digital or manual means” – and then billed for the cost of sending security forces to police their demonstrations, said Milei’s security minister, Patricia Bullrich, as she announced the new protocol on Thursday.

“The state is not going to pay for the use of the security forces; organizations that have legal status will have to pay or individuals will have to bear the cost,” Bullrich said.

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Jeremy Hunt’s post-Brexit City shake-up is ‘damp squib’, say MPs

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Treasury select committee says Edinburgh reforms launched a year ago have had little impact on UK economy

Jeremy Hunt’s post-Brexit City shake-up has been dismissed as a “damp squib” that has had little impact on the UK economy a year after its launch.

The chancellor announced the “bold collection” of policy changes known as the Edinburgh reforms in December 2022 with the claim they would “create jobs, support businesses and power growth across all four nations of the UK”.

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The broken state of UK economy is clear; Hunt and Starmer’s solutions are less so

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Resolution Foundation report underlines lack of progress by Tories but Labour proposals seem woolly

Britain’s economy is broken. That was the simple message given by the Resolution Foundation thinktank in the final report of its long-running look into the state of the nation.

Monday’s conference to launch the report was a high-powered affair, containing past and present members of the Bank of England’s monetary policy committee, the head of the Office for Budget Responsibility, Richard Hughes, and other members of the great and good.

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James Cleverly tells MPs crackdown will cut annual immigration numbers by about 300,000 – as it happened

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Home secretary to announce big hike in salary requirement for migrants to the UK as Rishi Sunak tries to cut net migration figures

Hunt says the government wants to speed up the time it takes to get a connection to the national grid by 90%.

Zanny Minton Beddoes, the editor of the Economist, is interviewing Hunt. She says he has mentioned the 110 policies, but she wants to know what the growth strategy is.

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Digital pound should not be considered until risks addressed, MPs warn

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Treasury select committee highlights concerns over data privacy and increased possibility of bank runs

The idea of creating a digital pound should not even be considered until the UK government and Bank of England address concerns over data privacy and the increased risk of bank runs, a parliamentary committee has warned.

MPs on the Treasury select committee said that while it was true that the rollout of a central bank digital currency could trigger fresh innovation and competition in the payments sector, serious questions remained about whether the positive effects outweighed the risks and costs.

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Andy Burnham claims government note shows Covid tier 3 restrictions imposed on Manchester as ‘punishment beating’ – as it happened

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Covid tier system introduced in October 2020 and imposed different restrictions on English regions in effort to contain spread of virus. This live blog is closed

At the Covid inquiry Sadiq Khan, the mayor of London, said that he was not getting information from the government in February about Covid. He said he was “disappointed” by that.

In late February and early March he was getting information from other cities around the world instead, he said. He said this happened even though his foreign affairs team consisted of just three people.

The government generally does give us information about a variety of things happening. I’m disappointed the government weren’t giving us information in February about what they knew then.

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UK will not return to Cameron era’s close ties with China, Sunak says

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At summit to drum up foreign investment PM says he does not intend to change policy towards Beijing

Rishi Sunak has said the UK will not return to the close relationship with China pursued under David Cameron, as the prime minister met business leaders in an effort to drum up foreign investment.

The government on Monday said £29.5bn of new investment had been earmarked for the UK, including projects by the ScottishPower owner, Iberdrola, and BioNTech, the German company that partnered with Pfizer on its Covid vaccine.

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UK spends more financing inequality in favour of rich than rest of Europe, report finds

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Inequalities of income, wealth and power cost UK £106.2bn a year compared with average developed OECD country

The UK spends more than anywhere else in Europe subsidising the cost of structural inequality in favour of the rich, according to an analysis of 23 OECD countries.

Inequalities of income, wealth and power cost the UK £106.2bn a year compared with the average developed country in the Organisation for Economic Co-operation and Development (OECD), according to the Equality Trust’s cost of inequality report.

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No bounce for the Tories after tax-cutting budget, poll shows

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Opinium poll for the Observer reveals the public is unimpressed with Jeremy Hunt’s attempt to woo them by trimming national insurance

Rishi Sunak has received no poll bounce after cutting taxes in last week’s autumn statement, according to the latest Opinium poll for the Observer.

Following a week in which the chancellor, Jeremy Hunt, described a reduction in national insurance as “the biggest tax cut on work since the 1980s” Labour’s lead has increased to 16 percentage points over the Tories.

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Rishi Sunak says immigration must fall but declines to say which new measures he backs – as it happened

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Net migration to the UK in 2023 is estimated at 672,000, and the PM says a more ‘sustainable’ level is needed. This live blog is closed

When Nigel Farage was leading the Brexit party, it was considerably influential for a party with no MPs, winning the European elections in 2019 and helping to push the Conservative party into a harder position on Brexit. After the 2019 election it was renamed Reform UK, Richard Tice took over as leader and it became much more marginal. But in an interview on the Today programme this morning Tice claimed that the government’s failure to bring down immigration was presenting it with an opportunity. He told the programme:

The British people voted to control immigration, and the government have betrayed the people’s promises. And that’s why so many thousands of people, former Tory members, are joining us. Our polling numbers – we got record polling last week, four different polls where we’re in double figures. This week, we’ve had Tory donors joining us. Frankly, I fully expect Tory MPs who are furious and angry with the government to be calling me next week.

[Cleverly] has made the point that he says that it was not aimed at a particular place. Knowing James well, he’s not the sort of person, in my opinion, who would have made that kind of remark in that kind of context.

But he has accepted that this was certainly unparliamentary language and he has rightly apologised.

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Autumn statement live: Jeremy Hunt cuts national insurance as OBR downgrades UK growth forecast

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Chancellor cuts employee national insurance to 10% while abolishing class 2 national insurance

Keir Starmer has said that a pause in hostilities between Israel and Hamas must be used to tackle the “urgent and unacceptable humanitarian catastrophe” in Gaza.

Welcoming the deal, which is expected to involve the release of 50 hostages being held by Hamas and a number of women and teenagers from Israeli jails, the Labour leader said his party had been calling for “a substantial humanitarian pause”. He said:

There must be immediate access to aid, food, water, fuel and medicine to ensure hospitals function and lives are saved. Aid and fuel need to not just get in but be distributed widely and safely.

We must also use the space this pause creates to take more steps on a path towards a full cessation of hostilities rather than an escalation of violence.

The real function of the projected spending squeeze is as a trap for Labour. If the opposition rejects the Tory trajectory, it will be accused of planning a profligate spree with public money. And if it pledges adherence to impossible targets, it will enter government with its hands bound too tight to deliver prompt satisfaction to the people who voted for it.

Keir Starmer and Rachel Reeves have so far operated a sensible policy of not walking into traps of this kind. That approach restored swing voters’ trust in Labour as stewards of the economy. But it tests the patience of an activist base that sees reversal of austerity as a moral imperative and can smell the incipient disappointment in promises of fiscal discipline.

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OBR halves UK growth forecast and warns inflation will exceed 2% target until 2025

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Despite £27bn windfall for the autumn statement, government forecaster warns of generally more difficult outlook until 2028

The government’s official forecaster has slashed its predictions for economic growth over the next two years, and warned that inflation could take until 2025 to come back to the official 2% target.

In an updated financial health check to accompany the autumn statement, the Office for Budget Responsibility (OBR) said a more resilient economy this year had handed the chancellor a £27bn budget windfall, but it warned of a more difficult outlook up to 2028 than previously forecast at the time of the budget in March.

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Autumn statement: Jeremy Hunt looks to cut UK taxes and ‘turbo-charge growth’

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Amid less gloomy OBR forecasts the chancellor is expected to take first steps towards cutting personal taxes

Jeremy Hunt will announce 110 measures to boost Britain’s stagnant economy and bow to demands from anxious Tory MPs for tax cuts when he delivers his second autumn statement on Wednesday.

In one of the last set-piece economic events before the general election, the chancellor will pledge to “turbo charge” growth while taking the first steps to cut personal taxes after recent sharp increases.

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UK borrows less than expected this year as Hunt lines up giveaways

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Chancellor says bringing down inflation remains one of his main aims as he prepares autumn statement

The UK government borrowed less than expected in the first seven months of the financial year as Jeremy Hunt puts the last-minute touches to a series of pre-election giveaways in his autumn statement on Wednesday.

Public sector borrowing between April and October was just above £98bn, according to the Office for National Statistics (ONS), and while this was £22bn higher than in the same period last year, it was almost £17bn less than the Office for Budget Responsibility (OBR) forecast in March.

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Boris Johnson ‘bamboozled’ by science and Matt Hancock had habit of saying things that were untrue, UK Covid inquiry hears – live

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Former chief scientific adviser Patrick Vallance revealed there was ‘complete lack of leadership’ at times in crisis

Vallance says that some of what he was doing during Covid would have been done by anyone else in the post of government chief scientific adviser (GCSA).

But he says because of his medical training, and his knowledge of vaccines (he had worked for GlaxoSmithKline before taking the GCSA job), he was probably more involved than another GCSA might have been.

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Sunak says he will cut taxes ‘over time’ as he reveals new economic priorities

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PM signals that business tax cuts more likely than personal ones as he sets out ‘next phase’ of government’s economic plan

Rishi Sunak has hinted at business tax cuts to boost economic growth as he promised to reduce the tax burden “carefully and sustainably” and “over time”.

In a speech on Monday the prime minister declined to give any specifics before the autumn statement, but stressed the focus was “very much the supply side” of the economy in a signal that business tax cuts are more likely than personal ones.

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Tax corporate polluters and rich to help tackle climate crisis, Jeremy Hunt told

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In letter to Guardian, campaigners say billions could be raised to help finance decarbonisation

Jeremy Hunt has been warned that combating the climate emergency will require higher taxes on wealth and big corporate polluters at the autumn statement rather than a package of giveaways for the rich.

In the run-up to the chancellor’s speech to the Commons on Wednesday, a group of 19 leading charities and campaigners – including Greenpeace, Christian Aid and Patriotic Millionaires UK – said billions of pounds could be raised to help finance decarbonisation.

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Labour motion to ban Truss-style budget meltdowns puts pressure on Tory MPs

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Party loyalty would force Conservatives to vote against plan for fiscal responsibility

Read more: ‘I challenge Rishi Sunak: vote with Labour to stop a Truss-style disaster happening again,’ writes Rachel Reeves

Labour will force a Commons vote this week aimed at creating new legal safeguards against fiscal disasters such as Liz Truss’s catastrophic mini-budget, which sent the financial markets into meltdown and drove up mortgage rates.

The party’s plan for a “fiscal lock” to protect personal, family and the national finances from reckless politicians will be contained in an amendment to the king’s speech that will be voted on by MPs on Tuesday. The manoeuvre will present Conservative backbenchers with a dilemma over whether to back a Labour amendment, or vote against what is a plan designed to embed fiscal responsibility into the budgetary process, and protect it from wild or accidental political misjudgments.

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Hunt urged to invest £30bn a year in infrastructure or risk ‘decade in doldrums’

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Thinktank says stronger than expected tax revenues have given chancellor scope for bold package in autumn statement

Jeremy Hunt risks condemning Britain to a decade in the doldrums unless he uses this month’s autumn statement to announce a £30bn-a-year investment plan to upgrade public infrastructure, a leading thinktank has warned.

The National Institute for Economic and Social Research (NIESR) said the chancellor should ignore calls by Tory MPs for pre-election tax cuts and instead focus on measures to boost growth through improvements to transport, digital networks, skills and housing.

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