Category Archives: Economic policy

Rishi Sunak’s upbeat view on economy stokes claims he is out of touch

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On flight to Japan for G7, PM says ‘economic optimism is increasing’ and insists Brexit is working

Rishi Sunak has been accused of being out of touch with ordinary families after claiming the economy was looking up and people’s household incomes were “hugely outperforming” expectations despite the cost of living crisis.

On a flight to Japan for the G7 summit of world leaders, the prime minister said that despite consumers struggling with high inflation and the cost of food and energy, there were “lots of signs that things are moving in the right direction” with the economy.

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State to take control of TransPennine Express after ongoing poor service

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Northern rail network to be run by state-owned operator of last resort when contract expires on 28 May

TransPennine Express (TPE) is to be run by the state after ministers announced that the failing rail company would not have its contract renewed.

The transport secretary, Mark Harper, said the northern rail network would be run by the state-owned operator of last resort after passengers experienced disruption, cancellations and a significant decline in the extent and reliability of the service.

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UK ministers under scrutiny for failure to publish Treasury spending details

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Department is worst for publishing spending data, records show, with ministers apparently in breach of guidelines

Treasury ministers appear to have broken government guidelines by failing to publish details of their department’s spending for several months, and in some cases more than two years.

Public records show the Treasury is the worst department in Whitehall for publishing key data on what its officials are spending public funds on, despite its role overseeing spending across government.

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Bank of England predicted to raise interest rates one more time in May

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Increase to 4.5% will be last rise in current cycle, former rate-setter Michael Saunders predicts

The Bank of England is likely to increase interest rates one more time in May, to 4.5%, before inflation falls “sharply” over the rest of the year, a former rate-setter has predicted.

Michael Saunders, who was a member of the monetary policy committee until August, said the UK was nearly at a “turning point” for interest rates, which have risen sharply over the past year as policymakers tried to curb a surge in prices caused by an increase in energy costs.

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Senior UK civil servants could strike after ‘unconscionable’ pay offer

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Government’s limiting of average pay rise to between 4.5% and 5% prompts fresh strike dates and possible FDA ballot

The UK’s most senior civil servants could take their first strike action in more than a decade after ministers imposed an average pay rise of between 4.5% and 5%, in a move described as “unconscionable” by union leaders.

The Cabinet Office published pay remit guidance limiting awards to an average of 4.5%, plus an additional 0.5% for the lowest pay bands.

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Deadline to sell off UK government’s NatWest shares extended to 2025

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Recent banking turmoil fuels decision to delay offloading portions of its remaining 41% stake

A plan to whittle down the government’s stake in NatWest has been extended by another two years, after weeks of banking turmoil that hit the lender’s shares and temporarily fuelled fears over a fresh financial crisis.

UK Government Investments (UKGI), which manages the shares on behalf of the Treasury, said the scheme to strategically sell portions of the British taxpayer’s shareholding – after NatWest’s near-£46bn state bailout in 2008 – would now run until August 2025.

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Pacific trade deal is more useful to Joe Biden than it is to the UK’s economy

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Hailed by Tory MPs as a Brexit benefit, CPTPP membership actually turns the UK into a willing pawn in Washington’s geopolitical game

Tory MPs hailed the UK’s entry last week into the Indo-Pacific trading bloc as a major step on the road to re-establishing Britain as a pioneer of free trade.

It was a coup for Rishi Sunak, said David Jones, the deputy chairman of the European Research Group of Tory Eurosceptics, who was excited to be aligned with “some of the most dynamic economies in the world”.

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Kemi Badenoch casts doubt on growth projections for Asia-Pacific trade deal

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Comments threaten to worsen already tense relationship between senior ministers and civil servants

Kemi Badenoch has cast doubt on her department’s projections for how much the Asia-Pacific trade deal the UK government has signed will help economic growth.

The government announced overnight it had joined the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP), which includes Australia and Japan, after two years of negotiations.

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Jeremy Hunt backed Labour plan last year for tax break on NHS pensions

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Labour says chancellor had time to draw up more targeted changes rather than including wealthiest savers

Jeremy Hunt previously backed Labour’s idea of giving a pensions tax break only to NHS staff, despite ruling out such a move in this week’s budget because it would not come into force quickly enough.

The chancellor was chair of the health select committee last year when members wrote a report calling for the NHS pension scheme to be overhauled to encourage senior doctors to stay in their jobs.

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NHS workers expected to be offered one-off payments worth up to 6% as part of revised pay offer – UK politics live

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Health secretary expected to announce a formal pay offer to key unions later today

Sinn Féin’s US fundraising arm has caused a row by calling for a referendum on Irish unity in adverts in the New York Times, Washington Post and other US publications.

The half-page ads were paid for by Friends of Sinn Féin and ran on Wednesday urging support for unity referendums in Northern Ireland and the Republic of Ireland. “It is time to agree on a date,” it said. “Let the people have their say.”

They’re ads from Irish American organisations whose view on reunification is well known and held for a very long time and they take out ads every year. So, the focus now needs to be on getting back to work [at Stormont].

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Budget: UK on track for ‘disastrous decade’ of income stagnation

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Thinktank says taxes as share of GDP are on course to reach 70-year high but public services are being cut

The UK remains on track for a “disastrous decade” of stagnant incomes and high taxes, despite cuts to public services, the Resolution Foundation has said in its analysis of the budget on Wednesday.

The thinktank, whose stated aim is to improve the standard of living for low- and middle-income families, said typical household disposable incomes were on course to be lower by the end of the forecast period in 2027-28 than they were before pandemic, when inflation was taken into account.

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Jeremy Hunt is helping rich instead of helping people into work, says thinktank

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IFS says budget pensions giveaway could open up loophole for avoidance of inheritance tax

Jeremy Hunt’s huge pensions giveaway for the wealthiest 1% may have no impact on increasing the number of people in work, while opening a loophole for avoidance of inheritance tax, a leading economic thinktank has warned.

The Institute for Fiscal Studies said the surprise measure in the chancellor’s budget “probably won’t play a big part, if any” in increasing the number of people in work.

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Hunt likely to save spending spree for polling day, not budget speech

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The chancellor has room for giveaways in this week’s budget, but business and consumer groups fear he will hold them back for the election

Jeremy Hunt is under pressure to be generous when he delivers his first budget speech since he became chancellor last October.

The public finances have improved dramatically from the chaotic days that followed Liz Truss’s mini-budget in September, which rocked international money markets and sent interest rates on government debt soaring. The cost of financing Britain’s debt has fallen in recent months and the cost of gas on wholesale markets has tumbled.

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China sets modest economic targets as it seeks to bounce back from Covid woes

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At the opening of the Communist party’s National People’s Congress, outgoing premier Li Keqiang confirmed a further rise in defence spending as well

China has set a target of 5% GDP growth in 2023, its outgoing premier has said in a speech to the ruling party’s rubber-stamp parliament – a goal that is at the lower end of analysts’ expectations and follows a 2022 figure that came in far below target.

The “work report” speech on Sunday also touched on foreign affairs and re-emphasised the Chinese Communist party’s (CCP’s) aim to annex Taiwan. Budget papers confirmed another consecutive rise in defence spending of 7.2%, slightly up on last year’s rise of 7.1%.

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Sunak sets out Northern Ireland trade deal to MPs as Labour vow to back agreement – as it happened

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Rishi Sunak and Ursula von der Leyen say ‘Windsor framework’ has been reached after four months of negotiations. This blog is now closed

Q: Why do you say you will back the PM’s deal when you have not seen the detail? And would you like to see Northern Ireland within the scope of the European court of justice, or outside it?

Starmer says he knows Northern Ireland well and knows the detail. Any deal will be an improvement on the status quo. That is why he is saying he would back it. He says the deal will not come as a surprise.

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Liz Truss expected to launch political comeback on Sunday

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Former PM whose No 10 stint ended after 49 days understood to have written piece for Sunday Telegraph

Liz Truss is expected to launch her political comeback on Sunday, months after her calamitous tenure in Downing Street ended after 49 days.

Her return is expected to begin with an opinion piece in this weekend’s Sunday Telegraph, as well as a number of planned media appearances.

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Jeremy Hunt to promote low-tax and private sector ‘re-tooling’ of industry

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Chancellor also expected to tell markets that government spending will remain within strict limits

Jeremy Hunt will defend the government’s vision for Britain’s economic future in a speech to City executives in London on Friday when he will lay out plans for investment and growth.

The chancellor will say he wants to promote policies that allow the private sector to re-tool the UK’s industrial base and re-skill the workforce to generate strong growth over the next decade.

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Rishi Sunak says people ‘not idiots’ and know why he cannot cut taxes

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PM suggests public understands what is affordable, but his stance could trigger fresh backlash from Tory MPs

Rishi Sunak has suggested the government cannot afford any immediate tax cuts, saying people are “not idiots” and understand what is unaffordable.

But the comments risked opening a fresh conflict with Conservative MPs who have been making the case for tax cuts in the spring budget, in light of improving economic forecasts and as a way to increase growth.

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Tax collectors lack ambition, say MPs, as £42bn remains unpaid

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Fraud and error have left ‘eye-watering’ amount owed to HMRC, says public accounts committee

The government has been criticised for failing to collect £42bn in unpaid tax from businesses and individuals amid concern over the strain on the public finances as the UK’s economy stands on the brink of recession.

The cross-party Commons public accounts committee (PAC) said that an “eye-watering” amount of tax was owed to HMRC, while also criticising tax collectors for lacking ambition to tackle fraud and error.

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Sunak strives to be reassuring but is five-point plan all sleight of hand?

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PM plans a ‘no tricks’ reset but with an inflation fall already expected this is more about hanging on at an election

In his first big speech since taking over at No 10, Rishi Sunak promised “no tricks, no ambiguity” as he announced his five promises to reset the government after a difficult year.

The prime minister said he would be focusing on halving inflation, growing the economy, reducing debt, cutting NHS waiting lists, and stopping small-boat crossings to the UK.

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