Category Archives: Economic growth (GDP)

Budget 2024: Jeremy Hunt announces 2p cut in national insurance

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Chancellor also scraps ‘non-dom’ tax breaks and slashes capital gains on property in pre-election gambit

Jeremy Hunt has announced a 2p national insurance cut in his budget as a pre-election gambit to revive flatlining opinion poll ratings and reboot Britain’s economy from recession.

In what could be the last major economic intervention before voters go to the polls, the chancellor said the government was making progress on its economic priorities and could now help hard-pressed families by permanently lowering certain taxes.

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Put aside differences to focus on growth across UK, Ed Balls tells politicians

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Former shadow chancellor is one of the authors of a new academic paper on how to bridge the regional divide

Britain needs a 20-year cross-party consensus to level up the economy and unleash the untapped potential of regions outside London and the south-east, the former Labour shadow chancellor Ed Balls has said.

Balls, one of five co-authors of an academic paper on bridging the UK’s regional divide, said it was vital that Labour and Conservative politicians put aside their differences in order to embed necessary funding and governance reforms.

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Rishi Sunak’s promise to grow the economy ‘in tatters’ as UK enters technical recession – business live

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UK economy shrank by 0.3% in October-December, worse than expected, putting UK in a technical recession in a blow to the PM

Net trade, household spending and government consumption all contracted in the final quarter of last year, helping to push the UK economy into a technical recession.

Household expenditure fell by 0.1% in real terms (adjusted for inflation) in Q4 2023, following a downwardly revised fall of 0.9% in Q3, as consumers cut back in the cost of living squeeze.

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More than 47,000 UK businesses on ‘brink of collapse’, warn insolvency experts

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25% jump in firms facing ‘critical’ financial distress, with property and construction sectors featuring heavily, says Begbies Traynor

More than 47,000 UK companies are on the brink of collapse after a 25% jump in the number of businesses facing “critical” financial distress in the final three months of 2023, according to a report.

It marks the second consecutive quarter-on-quarter period when critical financial distress has risen by a 25%, the latest “Red Flag” report by insolvency specialists Begbies Traynor found.

Construction (7,849)

Support services (7,096)

Real estate & property services (6,228)

Professional services (4,347)

General retailers (3,133)

Telecoms & IT (2,830)

Health & education (2,719)

Media (1,828)

Financial services (1,373)

Food & drug retailers (1,343)

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Retail slump raises spectre of recession as Hunt looks more Truss-like by the day

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Surprise fall in December sales damages chancellor’s claims that UK economy is on right track

The UK economy was probably in recession during the second half of 2023 if the latest retail sales figures are anything to go by.

A surprise 3.2% slump in the level of sales in Great Britain during December appears to show the cost of living crisis was continuing to hurt household finances despite a rise in wages that gave many consumers a bit more spending power.

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UK economy returns to growth amid Black Friday spending lift

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GDP rises by 0.3% in November after October decline, with car leasing and video games fuelling bounceback

The UK economy returned to growth in November after a recovery in consumer spending driven by Black Friday sales, with shoppers hunting for bargains as the key Christmas shopping season got under way.

Gross domestic product rose by 0.3% on the month, after a decline of 0.3% in October, according to the Office for National Statistics (ONS). City economists had forecast more modest growth of 0.2%.

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Manufacturers say UK becoming more competitive as global hub, survey finds

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Findings show British bosses growing in confidence over sector’s prospects despite ‘headwinds of sustained economic challenges’

Britain’s largest manufacturers believe the UK is increasing its competitiveness as a global hub for manufacturing, despite high energy costs, worker shortages and political instability holding back progress.

In a crunch period for the economy before the general election, the manufacturing trade body Make UK and the accountancy firm PricewaterhouseCoopers said industry bosses were growing more confident about the sector’s prospects, but “headwinds of sustained economic challenges” still remained.

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Labour should make UK leader in wellbeing-informed policy, says peer

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Call by economics of happiness expert Richard Layard comes as research agency set up under David Cameron is to be axed in Whitehall cuts

A Labour government should make the UK the world’s first country to make policy based on its impact on wellbeing as well as the economy, one of the world’s leading experts on the economics of happiness has said.

With Keir Starmer in No 10, Downing Street should require Whitehall departments to appraise the potential impact on citizens’ wellbeing when they make funding bids, Richard Layard said. The next chancellor should announce measures of happiness and misery alongside GDP in their annual budget statements, he added.

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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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Bank of England keeps interest rates on hold as concern about economy grows

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Interest rates will need to stay high for sufficiently long to return inflation to 2% target

The Bank of England has said Britain is facing a tougher job to crush persistently high inflation than other advanced nations, as it kept interest rates on hold at the highest level since the 2008 financial crisis.

Pushing back against expectations in financial markets for a deep round of interest rate cuts next year, the central bank said there was still a long way to go before it could declare victory on inflation, despite a worsening outlook for the UK’s stagnant economy.

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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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Central banks ‘risk tipping UK and other developed countries into recession’

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Stance on inflation poses threat to ‘soft landing’ forecast for global economy, says OECD

Continued tough action by central banks to tackle stubborn inflation risks tipping Britain and other developed countries into recession next year, the west’s leading economic thinktank has warned.

The Organisation for Economic Co-operation and Development (OECD) said the chances of policymakers getting it wrong were “pretty high” and posed a threat to its central “soft landing” forecast for the global economy.

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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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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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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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Labour’s Wes Streeting interviewed at Labour party conference – UK politics live

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Shadow health secretary questioned by Guardian editor-in-chief, Katharine Viner

Q: You oppose the Rwanda policy because you don’t think it will work. If the supreme court rules it is legal, and deportations start and it is seen to be working, would you still reverse it.

Yes, says Starmer. He says it is the wrong policy. It is very expensive, and it only affect only a small number of people. And the policy does not deal with the problem at source.

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Bond market sell-off sends UK long-term borrowing cost to 25-year high

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Rate tops level last seen after Liz Truss mini-budget as fears of global inflation and US political instability spook markets

Britain’s long-term cost of borrowing has hit its highest level since 1998, as political instability in the US and fears of sustained high levels of inflation triggered a sell-off in global bond markets.

The yield, or interest rate, on 30-year UK government bonds hit 5.115% early on Wednesday, according to the financial data provider Refinitiv.

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Tory swing voters switch to Labour after Sunak’s green retreat, poll finds

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Survey shows nearly 90% of 2019 Conservative voters say green industry is vital to UK’s economic growth

Almost nine in 10 voters who intend to switch their support from Conservative to Labour candidates in the next general election believe that “green growth” is important for the future of Britain’s economy, according to a poll.

Carried out by pollsters Opinium, the survey found that 82% of all respondents backed the growth of Britain’s green industry to boost the economy, in the same week that the prime minister announced a series of U-turns on the government’s green commitments in an attempt to create a dividing line with Labour before the election.

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