The International Monetary Fund (IMF) has warned that the United Kingdom, under its new Labour government, faces tough decisions due to high public debt.

In its annual economic review, the IMF stressed the need to balance public spending while stabilising debt, which is nearing 100 per cent of GDP.

This challenge arises as the country requires significant investment in sectors like healthcare, which suffers from chronic underfunding and an ageing population.

Additionally, the IMF called for ambitious reforms to boost growth.

For consumers, this means potential changes in tax policies.

The IMF suggested that the government might need to increase tax revenues by raising carbon, inheritance, and property taxes, and broadening the VAT base.

While these measures aim to control debt, they could impact household budgets and consumer spending.

The IMF also noted a soft landing for the economy after a mild recession last year, predicting 0.7 per cent growth in 2024, with a rise to 1.5 per cent in 2025 and 1.7 per cent in 2026.

Inflation is expected to hit 2.5 per cent temporarily by year-end but is currently on target.

Despite challenges like weak productivity and an ageing population, increased immigration has helped mitigate negative effects, with Brexit impacts gradually fading.

The Labour Party, led by Keir Starmer, won a landslide victory, ending 14 years of conservative rule.

New finance minister Rachel Reeves aims to stimulate growth, focusing on infrastructure projects, including onshore wind power and housing.

Consumers can expect a period of adjustment with potential tax hikes and a focus on long-term economic stability and growth, which could improve public services and infrastructure in the future.

The International Monetary Fund (IMF) has warned that the United Kingdom, under its new Labour government, faces tough decisions due to high public debt. In its annual economic review, the IMF stressed the need to balance public spending while stabilising debt, which is nearing 100 per cent of GDP.

The International Monetary Fund (IMF) has warned that the United Kingdom, under its new Labour government, faces tough decisions due to high public debt. In its annual economic review, the IMF stressed the need to balance public spending while stabilising debt, which is nearing 100 per cent of GDP. This challenge arises as the country requires significant investment in sectors like healthcare, which suffers from chronic underfunding and an ageing population. Additionally, the IMF called for ambitious reforms to boost growth. For consumers, this means potential changes in tax policies. The IMF suggested that the government might need to increase tax revenues by raising carbon, inheritance, and property taxes, and broadening the VAT base. While these measures aim to control debt, they could impact household budgets and consumer spending. The IMF also noted a soft landing for the economy after a mild recession last year, predicting 0.7 per cent growth in 2024, with a rise to 1.5 per cent in 2025 and 1.7 per cent in 2026. Inflation is expected to hit 2.5 per cent temporarily by year-end but is currently on target. Despite challenges like weak productivity and an ageing population, increased immigration has helped mitigate negative effects, with Brexit impacts gradually fading. The Labour Party, led by Keir Starmer, won a landslide victory, ending 14 years of conservative rule. New finance minister Rachel Reeves aims to stimulate growth, focusing on infrastructure projects, including onshore wind power and housing. Consumers can expect a period of adjustment with potential tax hikes and a focus on long-term economic stability and growth, which could improve public services and infrastructure in the future.

UK faces fiscal tightrope: IMF urges reforms amid high debt

Rachel Reeves becomes Britain's first female finance minister after the Labour Party's landslide election victory on Friday.

Reeves, born on February 13, 1979, is a former chess champion and an ex-Bank of England economist who joined the party at the age of 16. She became the Labour's finance policy chief in 2021 and then served as the shadow Chancellor of the Exchequer. She has been a member of Parliament for Leeds West from 2010 to 2024. Now, the main question is: what will be her opening 'gambit' in this tricky fiscal situation?

The party has promised investments in health and education and also stressed the need to balance the books. Reeves has emphasised the need for fiscal stability amid public debt nearing 100 per cent of GDP, a level not seen since the 1960s. Reeves said in her opening remarks post-victory, 'And as Chancellor, I will put forward a new charter for budget responsibility, a new fiscal lock guaranteeing in law that any government making permanent and significant tax and spending changes will be subject to an independent forecast from the Office for Budget Responsibility.'

Reeves also criticised previous financial reforms. 'Never again. Never again will we allow a repeat of the devastation that Liz Truss and the Tory party have inflicted upon family finances. Never again will a prime minister or chancellor be allowed to rush through plans that are uncosted, unscrutinised and wholly detached from economic reality,' she said.

Labour Party leader Keir Starmer has been vocal about boosting economic growth and the need for private capital investments. The party has announced reforms in the pensions and savings industry, which could potentially help Britain's businesses. Speculations surround tax reforms. However, analysts at JP Morgan expect the party's policies to be 'neutral' for the sector.

British Pound and Stocks surged on Friday following Labour's victory. But can this growth be sustained as economic realities kick in? Reeves seems confident about the future when she says, 'What people will be asking themselves at the next election is this - are me and my family better off with a Conservative government? And the answer is no.'

Rachel Reeves becomes Britain's first female finance minister after the Labour Party's landslide election victory on Friday. Reeves, born on February 13, 1979, is a former chess champion and an ex-Bank of England economist who joined the party at the age of 16.

Rachel Reeves becomes Britain's first female finance minister after the Labour Party's landslide election victory on Friday. Reeves, born on February 13, 1979, is a former chess champion and an ex-Bank of England economist who joined the party at the age of 16. She became the Labour's finance policy chief in 2021 and then served as the shadow Chancellor of the Exchequer. She has been a member of Parliament for Leeds West from 2010 to 2024. Now, the main question is: what will be her opening 'gambit' in this tricky fiscal situation? The party has promised investments in health and education and also stressed the need to balance the books. Reeves has emphasised the need for fiscal stability amid public debt nearing 100 per cent of GDP, a level not seen since the 1960s. Reeves said in her opening remarks post-victory, 'And as Chancellor, I will put forward a new charter for budget responsibility, a new fiscal lock guaranteeing in law that any government making permanent and significant tax and spending changes will be subject to an independent forecast from the Office for Budget Responsibility.' Reeves also criticised previous financial reforms. 'Never again. Never again will we allow a repeat of the devastation that Liz Truss and the Tory party have inflicted upon family finances. Never again will a prime minister or chancellor be allowed to rush through plans that are uncosted, unscrutinised and wholly detached from economic reality,' she said. Labour Party leader Keir Starmer has been vocal about boosting economic growth and the need for private capital investments. The party has announced reforms in the pensions and savings industry, which could potentially help Britain's businesses. Speculations surround tax reforms. However, analysts at JP Morgan expect the party's policies to be 'neutral' for the sector. British Pound and Stocks surged on Friday following Labour's victory. But can this growth be sustained as economic realities kick in? Reeves seems confident about the future when she says, 'What people will be asking themselves at the next election is this - are me and my family better off with a Conservative government? And the answer is no.'

Rachel Reeves's first 'move': Britain gets its first female Finance Minister

Britain's economy bounced back from recession faster than initially reported in the first quarter of this year, according to revised data from the Office for National Statistics (ONS) released on Friday.

The country's gross domestic product (GDP) grew by 0.7 per cent from the previous quarter, surpassing the earlier estimate of 0.6 per cent growth. However, things are still a bit uncertain as the nation gears up for a crucial election next week.

In the second half of 2023, Britain's GDP experienced two consecutive quarters of decline. Despite the recent positive growth, the overall economic outlook remains weak, which presents challenges for Prime Minister Rishi Sunak and his Conservative Party leading up to the election.

Opinion polls predict that the Labour Party, led by Keir Starmer, will secure a comfortable victory.

The first-quarter GDP was only 0.3 per cent higher than the previous year, showing some improvement from the initial estimate of 0.2 per cent.

However, when it comes to real household disposable income per person, things weren't as positive. In the first quarter of 2024, it was 0.6 per cent lower compared to the final quarter of 2019, before the COVID-19 pandemic hit.

Adam Corlett, a principal economist at the Resolution Foundation, pointed out that income growth has significantly declined during this parliamentary term, making it the worst since the 1950s and the third worst since 1910.

He stressed that addressing this "great living standards slowdown" will be a critical challenge for the next government.

Since the last election, Britain's economy has faced a slew of obstacles, including the lasting impact of the pandemic on the labour force, rising inflation due to Russia's invasion of Ukraine, and post-Brexit trade issues.

In the first quarter of 2024, the economy grew by 1.8 per cent compared to the final quarter of 2019, making it the weakest performer among the G7 economies, except for Germany. However, France and Japan haven't fared much better.

Despite a solid start to 2024, the outlook remains challenging. The first quarter saw the fastest growth since the last quarter of 2021, and the Bank of England (BOE) estimates a 0.5 per cent GDP growth for the second quarter.

The ONS data offers some relief, showing a 2.4 per cent increase in real household disposable income per person over the past year, driven by rapid wage growth in a tight labour market. GDP per person rose quarterly for the first time in two years, although it's still 0.6 per cent lower than a year ago.

The BOE sees the strong growth in the first half of the year as a rebound from last year's weakness rather than a sustained period of expansion, estimating the underlying growth rate at around 0.25 per cent per quarter.

Government budget forecasters are more optimistic, predicting annual growth to rise from 0.8 per cent this year to nearly 2 per cent in the coming years.

Keir Starmer has criticised these forecasts as overly pessimistic, vowing to achieve the highest sustained growth among the G7 countries through reforms such as easing planning controls to speed up infrastructure development and constructing 1.5 million new homes.

However, Britain hasn't consistently grown faster than 2 per cent annually since before the 2008 financial crisis. Economists attribute this to a slowdown in productivity growth, which has been worsened by weak investment.

Furthermore, ONS data revealed a decline in foreign direct investment in Britain for the fifth time in six quarters during January-March, further highlighting the economic challenges ahead.

(With inputs from Reuters)

Britain's economy bounced back from recession faster than initially reported in the first quarter of this year, according to revised data from the Office for National Statistics (ONS) released on Friday.

Britain's economy bounced back from recession faster than initially reported in the first quarter of this year, according to revised data from the Office for National Statistics (ONS) released on Friday. The country's gross domestic product (GDP) grew by 0.7 per cent from the previous quarter, surpassing the earlier estimate of 0.6 per cent growth. However, things are still a bit uncertain as the nation gears up for a crucial election next week. In the second half of 2023, Britain's GDP experienced two consecutive quarters of decline. Despite the recent positive growth, the overall economic outlook remains weak, which presents challenges for Prime Minister Rishi Sunak and his Conservative Party leading up to the election. Opinion polls predict that the Labour Party, led by Keir Starmer, will secure a comfortable victory. The first-quarter GDP was only 0.3 per cent higher than the previous year, showing some improvement from the initial estimate of 0.2 per cent. However, when it comes to real household disposable income per person, things weren't as positive. In the first quarter of 2024, it was 0.6 per cent lower compared to the final quarter of 2019, before the COVID-19 pandemic hit. Adam Corlett, a principal economist at the Resolution Foundation, pointed out that income growth has significantly declined during this parliamentary term, making it the worst since the 1950s and the third worst since 1910. He stressed that addressing this "great living standards slowdown" will be a critical challenge for the next government. Since the last election, Britain's economy has faced a slew of obstacles, including the lasting impact of the pandemic on the labour force, rising inflation due to Russia's invasion of Ukraine, and post-Brexit trade issues. In the first quarter of 2024, the economy grew by 1.8 per cent compared to the final quarter of 2019, making it the weakest performer among the G7 economies, except for Germany. However, France and Japan haven't fared much better. Despite a solid start to 2024, the outlook remains challenging. The first quarter saw the fastest growth since the last quarter of 2021, and the Bank of England (BOE) estimates a 0.5 per cent GDP growth for the second quarter. The ONS data offers some relief, showing a 2.4 per cent increase in real household disposable income per person over the past year, driven by rapid wage growth in a tight labour market. GDP per person rose quarterly for the first time in two years, although it's still 0.6 per cent lower than a year ago. The BOE sees the strong growth in the first half of the year as a rebound from last year's weakness rather than a sustained period of expansion, estimating the underlying growth rate at around 0.25 per cent per quarter. Government budget forecasters are more optimistic, predicting annual growth to rise from 0.8 per cent this year to nearly 2 per cent in the coming years. Keir Starmer has criticised these forecasts as overly pessimistic, vowing to achieve the highest sustained growth among the G7 countries through reforms such as easing planning controls to speed up infrastructure development and constructing 1.5 million new homes. However, Britain hasn't consistently grown faster than 2 per cent annually since before the 2008 financial crisis. Economists attribute this to a slowdown in productivity growth, which has been worsened by weak investment. Furthermore, ONS data revealed a decline in foreign direct investment in Britain for the fifth time in six quarters during January-March, further highlighting the economic challenges ahead. (With inputs from Reuters)

UK economy exits recession faster than expected, faces election challenges

British Prime Minister Rishi Sunak faced rigorous questions from audience during a high-stakes televised debate on Thursday. During the debate, Sunak also addressed allegations that Tory insiders were betting on the election. Responding to questions, Sunak said that he was "incredibly angry" and promised to "boot out" anyone found to have broken gambling laws.

Gravitas: Rishi Sunak heckled, grilled by angry citizens during televised election debate

As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened.

Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023.

However, despite this rapprochement, some of Labour’s proposed policies could still impact the sector's profitability.

Starmer’s Labour has promised to improve the financial stability of households, many of which have been struggling due to more than two years of mortgage market instability and a cost-of-living crisis.

This includes a review of the advantages of longer-term fixed-rate mortgages, intending to protect homeowners from sudden interest rate changes and make homeownership more attainable.

Analysts, lenders, and brokers believe that this could result in broader changes in mortgage and financial products, potentially shifting the balance in favour of consumers.

In the UK, traditional mortgage products differ from those in the US, Germany, Denmark, and the Netherlands as they put all the interest rate risks on borrowers. Unlike in these countries, long-term fixed-rate mortgages are more common.

According to Reuters, Daniel Austin, CEO of ASK Partners, pointed out that a 10-year fixed-rate mortgage is always more expensive, which creates a potential cost barrier for such products in the UK.

British lenders manage risk differently, often through interest rate swaps, which have become more expensive due to recent political and economic turmoil.

While Labour has ambitious policies, it is not anticipated to implement a bank windfall tax or make significant changes to the Bank of England's interest payments to banks, both of which were previously under consideration.

This aligns with Starmer's overall pro-growth position, which is widely believed to be advantageous for UK banks.

However, some Labour policies may reduce bank profits in the long run. The party's commitment to establishing up to 350 'banking hubs' over the next five years contradicts the cost-cutting strategies of many banks. Shadow finance minister Rachel Reeves characterised this plan as a means to rejuvenate communities affected by widespread branch closures.

The 'Freedom to Buy' scheme by Labour is designed to help 80,000 first-time buyers over five years. However, it's unlikely to have a significant impact on banks' mortgage volumes, which total over one million annually.

To improve the situation, the industry needs to educate customers about how they can optimise their finances by switching their savings or mortgage products to achieve better returns.

Furthermore, the overall context of declining interest rates is expected to put pressure on bank profits. James Daley, the managing director of Fairer Finance, highlighted that banks' profits will face additional scrutiny in the credit card and current account markets as consumer value becomes a focus of regulatory attention.

(With inputs from Reuters)

As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened. Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023.

As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened. Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023. However, despite this rapprochement, some of Labour’s proposed policies could still impact the sector's profitability. Starmer’s Labour has promised to improve the financial stability of households, many of which have been struggling due to more than two years of mortgage market instability and a cost-of-living crisis. This includes a review of the advantages of longer-term fixed-rate mortgages, intending to protect homeowners from sudden interest rate changes and make homeownership more attainable. Analysts, lenders, and brokers believe that this could result in broader changes in mortgage and financial products, potentially shifting the balance in favour of consumers. In the UK, traditional mortgage products differ from those in the US, Germany, Denmark, and the Netherlands as they put all the interest rate risks on borrowers. Unlike in these countries, long-term fixed-rate mortgages are more common. According to Reuters, Daniel Austin, CEO of ASK Partners, pointed out that a 10-year fixed-rate mortgage is always more expensive, which creates a potential cost barrier for such products in the UK. British lenders manage risk differently, often through interest rate swaps, which have become more expensive due to recent political and economic turmoil. While Labour has ambitious policies, it is not anticipated to implement a bank windfall tax or make significant changes to the Bank of England's interest payments to banks, both of which were previously under consideration. This aligns with Starmer's overall pro-growth position, which is widely believed to be advantageous for UK banks. However, some Labour policies may reduce bank profits in the long run. The party's commitment to establishing up to 350 'banking hubs' over the next five years contradicts the cost-cutting strategies of many banks. Shadow finance minister Rachel Reeves characterised this plan as a means to rejuvenate communities affected by widespread branch closures. The 'Freedom to Buy' scheme by Labour is designed to help 80,000 first-time buyers over five years. However, it's unlikely to have a significant impact on banks' mortgage volumes, which total over one million annually. To improve the situation, the industry needs to educate customers about how they can optimise their finances by switching their savings or mortgage products to achieve better returns. Furthermore, the overall context of declining interest rates is expected to put pressure on bank profits. James Daley, the managing director of Fairer Finance, highlighted that banks' profits will face additional scrutiny in the credit card and current account markets as consumer value becomes a focus of regulatory attention. (With inputs from Reuters)

Britain's labour party woos banks but risks profit squeeze

The UK housing market is in no way welcoming to first-time buyers, as the price of houses increases by 1.1 per cent in the year to April 2024. At this rate, the average house price is now positioned at 281,000 British Pounds, sending worse prospects for people with an appetite to enter the property market.&nbsp;

The 1.1 per cent increase in average house prices followed a 0.9 per cent rise in March, the second consecutive month of annual price growth following eight months of decline, according to the Office for National Statistics. Average private rents rose by 8.7 per cent in May, a slight drop from 8.9 per cent in the previous month.&nbsp;

Across the 12 months to April 2024, average house prices in England increased to £298,000, reflecting a 0.6 per cent annual rise. In Wales, prices went up to £208,000, a rise of 0.4 per cent, while Scotland saw prices go up by 4.5 per cent to £190,000. In Northern Ireland, there was an annual rise of 4 per cent to £178,000.&nbsp;

The rent market also has the same tinge of stress on housing affordability. The average rents in England went up by 8.6 per cent to £1,301, while that for Wales and Scotland increased by 8.5 per cent to £736 and by 9.3 per cent to £957, respectively. The nation having the highest rent inflation was Northern Ireland with a year-on-year rise in average rents of 10.3 per cent in March. Within England itself, London saw the highest at 10.1 per cent, as against the North East that notched up the lowest at 6.1 per cent. Across Great Britain, Kensington and Chelsea had the highest average rent at £3,397, while Dumfries and Galloway had the lowest at £480.&nbsp;

Anna Clare Harper, head of sustainable investment adviser GreenResi, stated house prices have increased by 1.1 per cent to £281,000, but for most younger people this number in isolation meant very little. The important question for the under-40s is whether decent housing is affordable, and as Harper said, it depends more on regulation than it does on house prices.&nbsp;

First-time buyer initiatives have been put forward by both main UK political parties. Labour intends to make the Mortgage Guarantee Scheme permanent. Under the scheme, which was announced by the previous government, lenders pay a fee in return for the government underwriting the riskiest part of a mortgage. In contrast, the Conservatives take aim at delivering 1.6 million new homes by 2029, more than Labour's commitment of 1.5 million over the same period. These targets would require at least 300,000 new homes to be built in England alone every year, needing huge reforms in the planning system.&nbsp;

However, if not done properly, new schemes could just further postpone the event. New-build prices are going through the roof and are rising far more quickly than existing homes.&nbsp;

With the constantly changing UK housing market, opportunities for first-time buyers and renters do not cut the mustard. Against the backdrop of political initiative promises and market dynamics, the future of affordable housing would assume centre stage in the UK for many.&nbsp;

The UK housing market is in no way welcoming to first-time buyers, as the price of houses increases by 1.1 per cent in the year to April 2024. At this rate, the average house price is now positioned at 281,000 British Pounds, sending worse prospects for people with an appetite to enter the property market.

The UK housing market is in no way welcoming to first-time buyers, as the price of houses increases by 1.1 per cent in the year to April 2024. At this rate, the average house price is now positioned at 281,000 British Pounds, sending worse prospects for people with an appetite to enter the property market. The 1.1 per cent increase in average house prices followed a 0.9 per cent rise in March, the second consecutive month of annual price growth following eight months of decline, according to the Office for National Statistics. Average private rents rose by 8.7 per cent in May, a slight drop from 8.9 per cent in the previous month. Across the 12 months to April 2024, average house prices in England increased to £298,000, reflecting a 0.6 per cent annual rise. In Wales, prices went up to £208,000, a rise of 0.4 per cent, while Scotland saw prices go up by 4.5 per cent to £190,000. In Northern Ireland, there was an annual rise of 4 per cent to £178,000. The rent market also has the same tinge of stress on housing affordability. The average rents in England went up by 8.6 per cent to £1,301, while that for Wales and Scotland increased by 8.5 per cent to £736 and by 9.3 per cent to £957, respectively. The nation having the highest rent inflation was Northern Ireland with a year-on-year rise in average rents of 10.3 per cent in March. Within England itself, London saw the highest at 10.1 per cent, as against the North East that notched up the lowest at 6.1 per cent. Across Great Britain, Kensington and Chelsea had the highest average rent at £3,397, while Dumfries and Galloway had the lowest at £480. Anna Clare Harper, head of sustainable investment adviser GreenResi, stated house prices have increased by 1.1 per cent to £281,000, but for most younger people this number in isolation meant very little. The important question for the under-40s is whether decent housing is affordable, and as Harper said, it depends more on regulation than it does on house prices. First-time buyer initiatives have been put forward by both main UK political parties. Labour intends to make the Mortgage Guarantee Scheme permanent. Under the scheme, which was announced by the previous government, lenders pay a fee in return for the government underwriting the riskiest part of a mortgage. In contrast, the Conservatives take aim at delivering 1.6 million new homes by 2029, more than Labour's commitment of 1.5 million over the same period. These targets would require at least 300,000 new homes to be built in England alone every year, needing huge reforms in the planning system. However, if not done properly, new schemes could just further postpone the event. New-build prices are going through the roof and are rising far more quickly than existing homes. With the constantly changing UK housing market, opportunities for first-time buyers and renters do not cut the mustard. Against the backdrop of political initiative promises and market dynamics, the future of affordable housing would assume centre stage in the UK for many.

Affordable housing, a utopian dream in the UK

UK Prime Minister Rishi Sunak has achieved one of his five goals set at the start of 2023 by halving inflation.

He may further celebrate progress this week as consumer price growth is anticipated to approach the 2 per cent target, marking its lowest level since July 2021.

However, the challenge lies in persuading the electorate of his contribution to this improvement.

Nineteen months ago, the UK experienced its most severe price shock in decades, with inflation reaching a peak of 11.1 per cent, surpassing that of major advanced economies.

The subsequent rapid decline, the fastest since the 1970s, suggests a potential interest rate cut from 5.25 per cent as early as next month, which could potentially alleviate costs for mortgage borrowers and businesses.

Despite the optimistic inflation data, there are still ongoing economic challenges.

Real wages continue to be below the levels before the financial crisis, with prices currently 23 per cent higher than they were in 2019.

Food prices have surged by approximately 30 per cent since 2021, which is a significant change compared to the previous 13 years.

Although GDP growth has bounced back, output per capita remains 0.7 per cent weaker than it was a year earlier.

The Conservative party, currently behind Labour in the opinion polls and recovering from recent election defeats, plans to use the economic upturn to their advantage as they gear up for an upcoming general election.

Chancellor of the Exchequer Jeremy Hunt echoed Sunak's sentiments, emphasising the progress made in tackling inflation.

Hunt and Sunak are facing scepticism over their ability to reduce inflation, as the ultimate responsibility lies with the Bank of England.

However, economist Thomas Pugh suggests that if inflation falls to 2.1 per cent or lower, it could pave the way for the Monetary Policy Committee to implement interest rate cuts in June.

The overall economic situation is looking positive. Real wages are increasing at the fastest rate since September 2015, and the economy has rebounded strongly from a slight recession in 2023.

Additionally, energy bills and food inflation have decreased, which is relieving financial pressure on lower-income households.

(With inputs from Bloomberg)

UK Prime Minister Rishi Sunak has achieved one of his five goals set at the start of 2023 by halving inflation. He may further celebrate progress this week as consumer price growth is anticipated to approach the 2 per cent target, marking its lowest level since July 2021.

UK Prime Minister Rishi Sunak has achieved one of his five goals set at the start of 2023 by halving inflation. He may further celebrate progress this week as consumer price growth is anticipated to approach the 2 per cent target, marking its lowest level since July 2021. However, the challenge lies in persuading the electorate of his contribution to this improvement. Nineteen months ago, the UK experienced its most severe price shock in decades, with inflation reaching a peak of 11.1 per cent, surpassing that of major advanced economies. The subsequent rapid decline, the fastest since the 1970s, suggests a potential interest rate cut from 5.25 per cent as early as next month, which could potentially alleviate costs for mortgage borrowers and businesses. Despite the optimistic inflation data, there are still ongoing economic challenges. Real wages continue to be below the levels before the financial crisis, with prices currently 23 per cent higher than they were in 2019. Food prices have surged by approximately 30 per cent since 2021, which is a significant change compared to the previous 13 years. Although GDP growth has bounced back, output per capita remains 0.7 per cent weaker than it was a year earlier. The Conservative party, currently behind Labour in the opinion polls and recovering from recent election defeats, plans to use the economic upturn to their advantage as they gear up for an upcoming general election. Chancellor of the Exchequer Jeremy Hunt echoed Sunak's sentiments, emphasising the progress made in tackling inflation. Hunt and Sunak are facing scepticism over their ability to reduce inflation, as the ultimate responsibility lies with the Bank of England. However, economist Thomas Pugh suggests that if inflation falls to 2.1 per cent or lower, it could pave the way for the Monetary Policy Committee to implement interest rate cuts in June. The overall economic situation is looking positive. Real wages are increasing at the fastest rate since September 2015, and the economy has rebounded strongly from a slight recession in 2023. Additionally, energy bills and food inflation have decreased, which is relieving financial pressure on lower-income households. (With inputs from Bloomberg)

Sunak's inflation victory faces voter doubts

Rishi Sunak has insisted that the Conservatives are united despite rampant speculation about a plot to replace him as prime minister before the general election.

UK PM Rishi Sunak faces leadership speculation, says 'Tories absolutely united'

UK Prime Minister Rishi Sunak has insisted "the economy is turning a corner" as he urged mutinous Tory MPs to "stick to the plan" amid reports of a plot to oust him before the election.

UK PM Rishi Sunak urges terrified Tories to 'stick with' his economy plan as he faces flak from MPs

A leading think tank, the Institute for Fiscal Studies (IFS), has cautioned that tax cuts announced in Wednesday's Budget won't fully offset the impact of tax increases and rising prices, as per a BBC report.

Regardless of a $12.74 billion cut to National Insurance announced by Chancellor Jeremy Hunt, the IFS predicts that households will still be worse off at the upcoming election than they were at the start of the current parliament.

The chancellor's strategy of tax cuts is part of a long-term reform plan aimed at shifting the tax burden away from workers, encouraging employment.

While the National Insurance cut is expected to benefit millions of workers, the IFS highlights that it only partially reverses the effects of other tax changes, such as freezing tax thresholds, which have resulted in a higher proportion of salaries being taken in tax.

According to the IFS, the tax changes will lead to varying patterns of gains and losses depending on income.

While an average earner may enjoy a tax cut of about $433.14 in the upcoming financial year, the gains diminish over time, with the average earner expected to be only $178.35 better off by 2027.

The think tank also notes that for every $1.27 given back to workers through the National Insurance cuts, $1.66 to $2.42 will have been taken away due to threshold changes between 2021 and 2024, indicating a net loss for taxpayers.

Labour leader Keir Starmer has criticised the government's strategy, accusing it of giving with one hand and taking even more with the other.

With an eye on the upcoming general election, the state of the economy and individuals' personal finances is under scrutiny.

The Conservatives hope slight upgrades to growth forecasts provided by the Office for Budget Responsibility will help change the narrative, but the IFS warns that overall living standards remain "dismal".

While the government's measures are expected to slightly increase borrowing in the next financial year, the Office for Budget Responsibility predicts borrowing to remain broadly in line with previous forecasts.

However, the country's debt as a proportion of GDP is set to rise over the next four years before marginally decreasing, with debt still expected to be 92.9 per cent of GDP in 2028-29, higher than the 89 per cent expected this year.

A leading think tank, the Institute for Fiscal Studies (IFS), has cautioned that tax cuts announced in Wednesday's Budget won't fully offset the impact of tax increases and rising prices, as per a BBC report.

A leading think tank, the Institute for Fiscal Studies (IFS), has cautioned that tax cuts announced in Wednesday's Budget won't fully offset the impact of tax increases and rising prices, as per a BBC report. Regardless of a $12.74 billion cut to National Insurance announced by Chancellor Jeremy Hunt, the IFS predicts that households will still be worse off at the upcoming election than they were at the start of the current parliament. The chancellor's strategy of tax cuts is part of a long-term reform plan aimed at shifting the tax burden away from workers, encouraging employment. While the National Insurance cut is expected to benefit millions of workers, the IFS highlights that it only partially reverses the effects of other tax changes, such as freezing tax thresholds, which have resulted in a higher proportion of salaries being taken in tax. According to the IFS, the tax changes will lead to varying patterns of gains and losses depending on income. While an average earner may enjoy a tax cut of about $433.14 in the upcoming financial year, the gains diminish over time, with the average earner expected to be only $178.35 better off by 2027. The think tank also notes that for every $1.27 given back to workers through the National Insurance cuts, $1.66 to $2.42 will have been taken away due to threshold changes between 2021 and 2024, indicating a net loss for taxpayers. Labour leader Keir Starmer has criticised the government's strategy, accusing it of giving with one hand and taking even more with the other. With an eye on the upcoming general election, the state of the economy and individuals' personal finances is under scrutiny. The Conservatives hope slight upgrades to growth forecasts provided by the Office for Budget Responsibility will help change the narrative, but the IFS warns that overall living standards remain "dismal". While the government's measures are expected to slightly increase borrowing in the next financial year, the Office for Budget Responsibility predicts borrowing to remain broadly in line with previous forecasts. However, the country's debt as a proportion of GDP is set to rise over the next four years before marginally decreasing, with debt still expected to be 92.9 per cent of GDP in 2028-29, higher than the 89 per cent expected this year.

UK Budget tax cuts won't offset rising prices, warns think tank

Consumer confidence in the UK declined in February, indicating that people are not prepared to make large purchases despite increasing indications that the economy is emerging from its brief slump.

Is UK still the best spot to set up your shop?

The UK economy officially entered a technical recession marking the first time since 2012. This comes after two consecutive quarters of negative growth.

Recession hits UK as economy shrinks, negative growth triggers this

Britain slid into recession last year on elevated inflation and a cost-of-living crisis, official data showed Thursday, dealing a blow to Prime Minister Rishi Sunak before this year's general election.

Gross domestic product shrank 0.3 percent in the fourth quarter of 2023 after contracting 0.1 percent in the prior three months, the Office for National Statistics (ONS) said in a statement.

Also read:&nbsp;<a data-ctorig="https://www.wionews.com/business-economy/uk-and-india-nearing-a-free-trade-agreement-622994" data-cturl="https://www.google.com/url?client=internal-element-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/business-economy/uk-and-india-nearing-a-free-trade-agreement-622994&amp;sa=U&amp;ved=2ahUKEwjXwLOPh62EAxVDa2wGHYM-AkYQFnoECAIQAg&amp;usg=AOvVaw2NoJcyWybgFp-OWdclV9TK" dir="ltr" href="https://www.wionews.com/business-economy/uk-and-india-nearing-a-free-trade-agreement-622994" target="_blank">UK&nbsp;and India nearing a free trade agreement: Reports</a>

That places the economy in recession, which is defined as two successive quarters of falling GDP.

The ONS noted that all main sectors shrank in the fourth quarter -- with manufacturing, construction and wholesale being the biggest drags on growth -- but added the economy was broadly flat overall in 2023.

Sunak, whose governing Conservatives are trailing Keir Starmer's main opposition Labour Party ahead of the election due this year, has pledged to grow the economy as one of his top five priorities.

News of the recession comes as voters go to the polls in two by-elections on Thursday, with the Conservatives fearful of losing one-time strongholds in Wellingborough, central England, and Kingswood in the southwest.

<h2>- 'Mild recession' -</h2>

"The news that the UK slipped into technical recession in 2023, will be a blow for the prime minister on a day when he faces the prospect of losing two by-elections," said Capital Economics analyst Ruth Gregory.

"But this recession is as mild as they come and timely indicators suggest it is already nearing an end."

Finance minister Jeremy Hunt noted that stubborn inflation and high interest rates were behind the output fall -- but insisted the economy was "turning a corner".

"While interest rates are high -- so the Bank of England can bring inflation down -- low growth is not a surprise.

Watch:&nbsp;UK Economy shrinks in September quarter

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"But there are signs the British economy is turning a corner; forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low.

"Although times are still tough for many families, we must stick to the plan -- cutting taxes on work and business to build a stronger economy."

Confirmation of the recession comes one day after separate official data showed that UK inflation held at 4.0 percent in January from December, or double the Bank of England's target rate.

The January reading was better than market expectations of an increase to 4.2 percent, but inflation nevertheless remains elevated, extending a cost-of-living crisis for millions of people in Britain.

Hunt added that bringing down elevated inflation remained the government's "top" goal.

"High inflation is the single biggest barrier to growth which is why halving it has been our top priority," he said.

<h2>- Sunak pledge 'in tatters' -</h2>

But Labour slammed the government's stewardship of the economy, adding that Sunak's vow to deliver growth was in "tatters".

"The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off," said Labour finance spokeswoman Rachel Reeves.

"This is Rishi Sunak's recession and the news will be deeply worrying for families and business across Britain."

Also read:&nbsp;<a data-ctorig="https://www.wionews.com/videos/brexit-costs-uk-economy-178-bn-679249" data-cturl="https://www.google.com/url?client=internal-element-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/videos/brexit-costs-uk-economy-178-bn-679249&amp;sa=U&amp;ved=2ahUKEwjXwLOPh62EAxVDa2wGHYM-AkYQFnoECAEQAg&amp;usg=AOvVaw0I6DZZCf5fuAH6uFq-du6T" dir="ltr" href="https://www.wionews.com/videos/brexit-costs-uk-economy-178-bn-679249" target="_blank">Brexit costs&nbsp;UK economy&nbsp;$178 bn</a>

The BoE's main interest rate sits at a 16-year high of 5.25 percent, as it seeks to bring inflation back to its 2.0-percent target.

However, rising interest rates also ramp up loan costs for individuals and businesses, further worsening the nation's cost-of-living crunch.

Yet annual UK inflation has tumbled since striking a 41-year peak of 11.1 percent in October 2022.

Global inflation soared as the invasion of Ukraine by major oil and gas producer Russia two years ago sent energy prices rocketing.

In response, the world's major central banks helped to cool inflation by hiking borrowing costs.

Britain slid into recession last year on elevated inflation and a cost-of-living crisis, official data showed Thursday, dealing a blow to Prime Minister Rishi Sunak before this year's general election.

Britain slid into recession last year on elevated inflation and a cost-of-living crisis, official data showed Thursday, dealing a blow to Prime Minister Rishi Sunak before this year's general election. Gross domestic product shrank 0.3 percent in the fourth quarter of 2023 after contracting 0.1 percent in the prior three months, the Office for National Statistics (ONS) said in a statement. Also read: UK and India nearing a free trade agreement: Reports That places the economy in recession, which is defined as two successive quarters of falling GDP. The ONS noted that all main sectors shrank in the fourth quarter -- with manufacturing, construction and wholesale being the biggest drags on growth -- but added the economy was broadly flat overall in 2023. Sunak, whose governing Conservatives are trailing Keir Starmer's main opposition Labour Party ahead of the election due this year, has pledged to grow the economy as one of his top five priorities. News of the recession comes as voters go to the polls in two by-elections on Thursday, with the Conservatives fearful of losing one-time strongholds in Wellingborough, central England, and Kingswood in the southwest. - 'Mild recession' - "The news that the UK slipped into technical recession in 2023, will be a blow for the prime minister on a day when he faces the prospect of losing two by-elections," said Capital Economics analyst Ruth Gregory. "But this recession is as mild as they come and timely indicators suggest it is already nearing an end." Finance minister Jeremy Hunt noted that stubborn inflation and high interest rates were behind the output fall -- but insisted the economy was "turning a corner". "While interest rates are high -- so the Bank of England can bring inflation down -- low growth is not a surprise. Watch: UK Economy shrinks in September quarter × "But there are signs the British economy is turning a corner; forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low. "Although times are still tough for many families, we must stick to the plan -- cutting taxes on work and business to build a stronger economy." Confirmation of the recession comes one day after separate official data showed that UK inflation held at 4.0 percent in January from December, or double the Bank of England's target rate. The January reading was better than market expectations of an increase to 4.2 percent, but inflation nevertheless remains elevated, extending a cost-of-living crisis for millions of people in Britain. Hunt added that bringing down elevated inflation remained the government's "top" goal. "High inflation is the single biggest barrier to growth which is why halving it has been our top priority," he said. - Sunak pledge 'in tatters' - But Labour slammed the government's stewardship of the economy, adding that Sunak's vow to deliver growth was in "tatters". "The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off," said Labour finance spokeswoman Rachel Reeves. "This is Rishi Sunak's recession and the news will be deeply worrying for families and business across Britain." Also read: Brexit costs UK economy $178 bn The BoE's main interest rate sits at a 16-year high of 5.25 percent, as it seeks to bring inflation back to its 2.0-percent target. However, rising interest rates also ramp up loan costs for individuals and businesses, further worsening the nation's cost-of-living crunch. Yet annual UK inflation has tumbled since striking a 41-year peak of 11.1 percent in October 2022. Global inflation soared as the invasion of Ukraine by major oil and gas producer Russia two years ago sent energy prices rocketing. In response, the world's major central banks helped to cool inflation by hiking borrowing costs.

UK economy entered recession ahead of election

The UK is grappling with a unique crisis termed 'Dogflation,' where soaring inflation rates are forcing pet owners to surrender their dogs. With a staggering 45,000 requests to surrender dogs last year, Dogs Trust, a leading dog rehoming charity, is facing an overwhelming situation. Pet care costs have skyrocketed to 9%, significantly outpacing the general inflation rate of 4%.

Gravitas: The 'Dogflation' crisis in the UK: Economic strain forces tough choices for pet owners

In a bold move to reignite the UK's sluggish economy, Finance Minister Jeremy Hunt has announced sweeping changes. Social security contributions are set to plummet, with major cuts to national insurance rates for both employees and the self-employed.

British Finance Minister unveils bold economic stimulus plan | World Business Watch

Retail sales have experienced an unexpected dip, marking the lowest level since the 2021 Covid-19 lockdowns. This downturn echoes a broader narrative, suggesting a shared challenge faced by economies worldwide.

UK retail sales plunge 0.3% amid economic challenges | World Business Watch

New research reveals that the UK millennials are still grappling with the enduring economic from the 2008 financial crisis born in the late 1980s.

UK millennials lag behind in home ownership amid soaring costs | World Business Watch

Britain's second-largest city Birmingham has declared itself bankrupt. This is due to an annual budgetary shortfall of millions of pounds. The city has shut down all non-essential spending.

Why did Britain's second-largest city Birmingham declare itself bankrupt?

Birmingham, the second-largest city in the United Kingdom with the country’s largest local authority, declared itself bankrupt, on Tuesday (September 5) after issuing a section 114 notice which indicates that it does not have enough resources to balance its books. However, the leader of the city’s council has insisted that vital services are safe.

<h2>‘Long-standing issues’</h2>

The opposition Labour-run council in central England has also blamed Conservative governments for years of underfunding as it scrambles to settle a 760 million pound (US$980 million) bill for equal pay claims.

In the meantime, Birmingham City Council has issued a Section 114 Notice under the Local Government Finance Act 1988, which essentially blocks all spending other than essential services that it is obligated to provide by law, including&nbsp;social care, waste collection and protecting the vulnerable.

The city council has also attributed their current predicament to “long-standing issues”, like installing a new IT system and one billion pounds (US$ 1.3 billion) worth of budget cuts over the past decade under successive Conservative governments.&nbsp;

“Like local authorities across the country, it is clear that Birmingham city council faces unprecedented financial challenges,” said the leader and the deputy leader of the Labour-run council John Cotton and Sharon Thompson, in a statement, as quoted by the Guardian.&nbsp;

It went on to list huge increases in adult social care demand, “dramatic reductions” in business rates income and “rampant inflation,” which created “a perfect storm” that the local government faces. &nbsp;

Cotton also said “tough and robust decisions” would be made amid fears that the budget cuts could affect the city’s roads, parks, and libraries. However, the Tory members on the council have blamed Labour’s mismanagement of public finances of the city which is home to over one million people.

During a council meeting, on Tuesday, Robert Alden, the leader of the Conservative opposition, accused the council of “lying to the people of Birmingham” and called their supposed claim of the city “facing a golden decade” under the Labour leadership “fools’ gold.”&nbsp;

<h2>A ‘concerning situation’: Downing Street 
&nbsp;</h2>

Meanwhile, Downing Street has called the situation “concerning” for residents. The government is doing its part and will provide an additional 5.1 billion pounds (US$ 6.4 billion) to councils in 2023-24, said British Prime Minister Rishi Sunak’s official spokesperson, adding that it would also be a more than nine per cent increase for Birmingham city council.&nbsp;

He added that “clearly it’s for locally elected councils to manage their own budgets”, and that the government had expressed concern about “their governance arrangements”. Furthermore, the British government has also “requested assurances from the leader of the council about the best use of taxpayers’ money”.

But he did go on to acknowledge that Birmingham had a “particular issue” with equal pay settlements and that the ministers had “commissioned an independent governance review which will report in the coming weeks”.&nbsp;

Croydon Council in south London issued a Section 114 notice in November last year after more than 100 million pounds black hole in its budget. In December, Thurrock Council in Essex, east of London had also declared itself in financial distress.&nbsp;

(With inputs from agencies) 
 
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Birmingham, the second-largest city in the United Kingdom with the country’s largest local authority, declared itself bankrupt, on Tuesday (September 5) after issuing a section 114 notice which indicates that it does not have enough resources to balance its books.

Birmingham, the second-largest city in the United Kingdom with the country’s largest local authority, declared itself bankrupt, on Tuesday (September 5) after issuing a section 114 notice which indicates that it does not have enough resources to balance its books. However, the leader of the city’s council has insisted that vital services are safe. ‘Long-standing issues’ The opposition Labour-run council in central England has also blamed Conservative governments for years of underfunding as it scrambles to settle a 760 million pound (US$980 million) bill for equal pay claims. In the meantime, Birmingham City Council has issued a Section 114 Notice under the Local Government Finance Act 1988, which essentially blocks all spending other than essential services that it is obligated to provide by law, including social care, waste collection and protecting the vulnerable. The city council has also attributed their current predicament to “long-standing issues”, like installing a new IT system and one billion pounds (US$ 1.3 billion) worth of budget cuts over the past decade under successive Conservative governments. “Like local authorities across the country, it is clear that Birmingham city council faces unprecedented financial challenges,” said the leader and the deputy leader of the Labour-run council John Cotton and Sharon Thompson, in a statement, as quoted by the Guardian. It went on to list huge increases in adult social care demand, “dramatic reductions” in business rates income and “rampant inflation,” which created “a perfect storm” that the local government faces. Cotton also said “tough and robust decisions” would be made amid fears that the budget cuts could affect the city’s roads, parks, and libraries. However, the Tory members on the council have blamed Labour’s mismanagement of public finances of the city which is home to over one million people. During a council meeting, on Tuesday, Robert Alden, the leader of the Conservative opposition, accused the council of “lying to the people of Birmingham” and called their supposed claim of the city “facing a golden decade” under the Labour leadership “fools’ gold.” A ‘concerning situation’: Downing Street Meanwhile, Downing Street has called the situation “concerning” for residents. The government is doing its part and will provide an additional 5.1 billion pounds (US$ 6.4 billion) to councils in 2023-24, said British Prime Minister Rishi Sunak’s official spokesperson, adding that it would also be a more than nine per cent increase for Birmingham city council. He added that “clearly it’s for locally elected councils to manage their own budgets”, and that the government had expressed concern about “their governance arrangements”. Furthermore, the British government has also “requested assurances from the leader of the council about the best use of taxpayers’ money”. But he did go on to acknowledge that Birmingham had a “particular issue” with equal pay settlements and that the ministers had “commissioned an independent governance review which will report in the coming weeks”. Croydon Council in south London issued a Section 114 notice in November last year after more than 100 million pounds black hole in its budget. In December, Thurrock Council in Essex, east of London had also declared itself in financial distress. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

UK: Second-largest city Birmingham’s council declares itself bankrupt

British Foreign Secretary James Cleverly is in the midst of a four-country trip to the Caribbean and South America and has recently come under fire for his choice of aircraft. At a time when the economy in the United Kingdom is not faring well and the country is facing a cost of living crisis, the minister chose to travel in luxury with the Embraer Lineage 1000E, reported The Guardian.&nbsp;

<h2>‘Best luxury jet money can buy’: Embraer Lineage 1000E</h2>

According to the media report, the jet costs more than 10,000 pounds (over $12,000) an hour to hire and includes several amenities like a lounge area with big-screen TV, a master suite complete with a queen-size bed, a private bathroom and a shower. The Embraer Lineage 1000E has been described as “one of the best luxury private jets money can buy” by Business Insider.&nbsp;

The aircraft from the German aviation company has also featured in the fleet of corporate jets and is a go-to private jet used by the billionaire Roy family in the hit TV show Succession. As per media reports, the ten-day trip that the British foreign secretary is on would cost the UK taxpayers about 348,000 pounds (approximately $431,078).&nbsp;

As of Monday, with a flying time of nearly 19 hours since Cleverly visited Jamaica, Colombia, and Chile, the private jet has already cost the taxpayers&nbsp;around 228,000 pounds (approx $282,520), reported The Mirror.&nbsp;

<h2>‘Ludicrous extravagance’: Opposition Labour Party on use of private jet</h2>

The opposition Labour Party has called the hire of Embraer Lineage 1000E&nbsp;a “ludicrous extravagance” and accused the UK Prime Minister Rishi Sunak’s government of being out of touch with the public, as per The Guardian.&nbsp;

The shadow Attorney General, Emily Thornberry acknowledged that while travelling overseas is an essential part of the foreign secretary’s role, it does not justify his use of a luxury jet when British families are running out of ways to make ends meet.&nbsp;

“At a time when British families are running out of ways to make ends meet – James Cleverly thought it was appropriate to conduct this tour in the kind of luxury jet used by billionaires and pop stars, with British taxpayers footing the bill,” said Thornberry, as quoted by The Guardian.&nbsp;

She added, “This sort of ludicrous extravagance at the public expense just shows how out of touch Rishi Sunak’s government are. No wonder their response to the cost of living crisis has been so utterly hopeless when they have such little concept of what ordinary life is like for people in our country.”

According to the media report, between the beginning of 2021 and the end of last year, foreign secretaries -&nbsp;Dominic Raab,&nbsp;Liz Truss and Cleverly -&nbsp;have hired private jets or used one of the government’s fleets of ministerial planes to travel overseas on 31 separate occasions. The cost of which, as per The Guardian, would amount to 4.6 million pounds (approx $5.7 million).&nbsp;

Not to mention the cost of the members of the media or delegations of businesspeople who accompanied the ministers on these trips, which is&nbsp;also paid for by the UK taxpayers. The number of people travelling with Cleverly was not known.&nbsp;

<h2>Cleverly’s office responds</h2>

“The foreign secretary’s job requires him to travel abroad to pursue UK interests. This was the most time-effective way to do this in this instance,” said a spokesperson from the foreign, commonwealth and development office, as per The Guardian. The statement added, “Value for money is taken into account in all travel decisions and costs are regularly published for transparency.”

The spokesperson&nbsp;also said that the ministers use commercial flights where practical and security considerations allow.&nbsp; 
 
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British Foreign Secretary James Cleverly is in the midst of a four-country trip to the Caribbean and South America and has recently come under fire for his choice of aircraft.

British Foreign Secretary James Cleverly is in the midst of a four-country trip to the Caribbean and South America and has recently come under fire for his choice of aircraft. At a time when the economy in the United Kingdom is not faring well and the country is facing a cost of living crisis, the minister chose to travel in luxury with the Embraer Lineage 1000E, reported The Guardian. ‘Best luxury jet money can buy’: Embraer Lineage 1000E According to the media report, the jet costs more than 10,000 pounds (over $12,000) an hour to hire and includes several amenities like a lounge area with big-screen TV, a master suite complete with a queen-size bed, a private bathroom and a shower. The Embraer Lineage 1000E has been described as “one of the best luxury private jets money can buy” by Business Insider. The aircraft from the German aviation company has also featured in the fleet of corporate jets and is a go-to private jet used by the billionaire Roy family in the hit TV show Succession. As per media reports, the ten-day trip that the British foreign secretary is on would cost the UK taxpayers about 348,000 pounds (approximately $431,078). As of Monday, with a flying time of nearly 19 hours since Cleverly visited Jamaica, Colombia, and Chile, the private jet has already cost the taxpayers around 228,000 pounds (approx $282,520), reported The Mirror. ‘Ludicrous extravagance’: Opposition Labour Party on use of private jet The opposition Labour Party has called the hire of Embraer Lineage 1000E a “ludicrous extravagance” and accused the UK Prime Minister Rishi Sunak’s government of being out of touch with the public, as per The Guardian. The shadow Attorney General, Emily Thornberry acknowledged that while travelling overseas is an essential part of the foreign secretary’s role, it does not justify his use of a luxury jet when British families are running out of ways to make ends meet. “At a time when British families are running out of ways to make ends meet – James Cleverly thought it was appropriate to conduct this tour in the kind of luxury jet used by billionaires and pop stars, with British taxpayers footing the bill,” said Thornberry, as quoted by The Guardian. She added, “This sort of ludicrous extravagance at the public expense just shows how out of touch Rishi Sunak’s government are. No wonder their response to the cost of living crisis has been so utterly hopeless when they have such little concept of what ordinary life is like for people in our country.” According to the media report, between the beginning of 2021 and the end of last year, foreign secretaries - Dominic Raab, Liz Truss and Cleverly - have hired private jets or used one of the government’s fleets of ministerial planes to travel overseas on 31 separate occasions. The cost of which, as per The Guardian, would amount to 4.6 million pounds (approx $5.7 million). Not to mention the cost of the members of the media or delegations of businesspeople who accompanied the ministers on these trips, which is also paid for by the UK taxpayers. The number of people travelling with Cleverly was not known. Cleverly’s office responds “The foreign secretary’s job requires him to travel abroad to pursue UK interests. This was the most time-effective way to do this in this instance,” said a spokesperson from the foreign, commonwealth and development office, as per The Guardian. The statement added, “Value for money is taken into account in all travel decisions and costs are regularly published for transparency.” The spokesperson also said that the ministers use commercial flights where practical and security considerations allow. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

British Foreign Secretary James Cleverly criticised for use of $12,000-an-hour private jet

UK's Prime Minister Rishi Sunak being out of touch with middle class realities in the UK - this comes after Sunak said that the British economy was looking up and people's household incomes were hugely outperforming expectations.

UK inflation at 10-year-high, says report; PM Rishi Sunak claims economy is looking up | WION

British Prime Minister Rishi Sunak on Monday went live on LinkedIn to connect with over 200 CEOs and business leaders as part of a new programme "Business Connect", which aims to promote businesses&nbsp;in the United Kingdom.&nbsp;

“Business Connect provides the next fantastic opportunity to demonstrate how we are growing the economy. We are bringing together some of the UK's biggest companies and investors for meaningful dialogue,” he said.

The British-Indian leader argued that the UK should be proud of its business credentials and pointed to the creation of 162 tech unicorns, smarter regulation and world-leading universities as the “right ingredients” to boost economic growth.&nbsp;

A New Taskforce And A New Vision

Sunak announced the creation of a new task force called the Foundation Model Taskforce with initial funding of 100 million pounds, aimed at accelerating the country's capability in emerging technologies like artificial intelligence (AI).&nbsp;

Drawing inspiration from the success of the COVID-19 Vaccines Taskforce, the Foundation Model Taskforce will focus on developing safe and reliable use of AI across the economy to ensure global competitiveness in this strategic technology.

“Harnessing the potential of AI provides enormous opportunities to grow our economy, create better-paid jobs, and build a better future through advances in healthcare and security. By investing in emerging technologies through our new expert taskforce, we can continue to lead the way in developing safe and trustworthy AI as part of shaping a more innovative UK economy,” Sunak said.

To foster innovations in the UK economy, Sunak also launched a new "innovation" category at the Great British Entrepreneur Awards, to be hosted by UK Chancellor Jeremy Hunt at Downing Street. This new award will recognize bright and innovative ideas that deliver new products and services, driving the economy forward.

Sunak's economic growth strategy includes ambitions for new trade agreements, including a free trade agreement (FTA) with India. UK Business Secretary Kemi Badenoch reiterated the government's commitment to securing high-quality trade accords, slashing red tape, and eliminating market access restrictions to keep the UK competitive.&nbsp;

British Prime Minister Rishi Sunak on Monday went live on LinkedIn to connect with over 200 CEOs and business leaders as part of a new programme "Business Connect", which aims to promote businesses in the United Kingdom.

British Prime Minister Rishi Sunak on Monday went live on LinkedIn to connect with over 200 CEOs and business leaders as part of a new programme "Business Connect", which aims to promote businesses in the United Kingdom. “Business Connect provides the next fantastic opportunity to demonstrate how we are growing the economy. We are bringing together some of the UK's biggest companies and investors for meaningful dialogue,” he said. The British-Indian leader argued that the UK should be proud of its business credentials and pointed to the creation of 162 tech unicorns, smarter regulation and world-leading universities as the “right ingredients” to boost economic growth. A New Taskforce And A New Vision Sunak announced the creation of a new task force called the Foundation Model Taskforce with initial funding of 100 million pounds, aimed at accelerating the country's capability in emerging technologies like artificial intelligence (AI). Drawing inspiration from the success of the COVID-19 Vaccines Taskforce, the Foundation Model Taskforce will focus on developing safe and reliable use of AI across the economy to ensure global competitiveness in this strategic technology. “Harnessing the potential of AI provides enormous opportunities to grow our economy, create better-paid jobs, and build a better future through advances in healthcare and security. By investing in emerging technologies through our new expert taskforce, we can continue to lead the way in developing safe and trustworthy AI as part of shaping a more innovative UK economy,” Sunak said. To foster innovations in the UK economy, Sunak also launched a new "innovation" category at the Great British Entrepreneur Awards, to be hosted by UK Chancellor Jeremy Hunt at Downing Street. This new award will recognize bright and innovative ideas that deliver new products and services, driving the economy forward. Sunak's economic growth strategy includes ambitions for new trade agreements, including a free trade agreement (FTA) with India. UK Business Secretary Kemi Badenoch reiterated the government's commitment to securing high-quality trade accords, slashing red tape, and eliminating market access restrictions to keep the UK competitive.

Rishi Sunak taps LinkedIn to boost UK businesses

A damning study conducted by a senior Bank of England policymaker has revealed that Brexit hurt the UK economy astronomically as it suffered business investment loss to the tune of $35 billion (£29 bn) since 2016, roughly amounting to $1,200 (£1,000) per household.&nbsp;

Jonathan Haskel, a member of the Bank of England's monetary policy committee, inferring from his report said private sector investment had basically flatlined post the 2016 referendum to leave the European Union.&nbsp;

"Current productivity penalty is about 1.3 per cent of GDP. That 1.3 per cent of GDP is about £29 billion, or roughly £1000 per household," Haskel was quoted as saying by The Overshoot.&nbsp;

"At the end of the forecast period, the penalty goes up to something like 2.8 per cent of GDP, which is very close to the 3.2 per cent number we found using the totally different reduced form methodology based on goods trade volumes."&nbsp;

In the last six years, the UK has suffered far more when compared to other major economies of the region.

The bad news is that the productivity gap has left long-lasting gashes which are not expected to heal unless there is a drastic turnaround in policy.&nbsp;

Haskel added that the economic boom between 2012-2016 plateaued afterwards and the UK quietly dropped to the bottom of G7 countries, investment-wise.&nbsp;

<a href="https://www.wionews.com/world/from-brexit-to-bregret-more-young-britons-say-brexit-has-failed-560919">Read more:&nbsp;From Brexit to 'Bregret': More young Britons vent discontent, say 'Brexit has failed'</a>

The Brexit saga

UK decided to leave the EU in 2016 after a lengthy campaign that divided the country into two halves, the remainers and the leavers.

Tories were the biggest proponent of leaving the EU citing it would help the UK grow economically having cut the flab of paying the 27-nation bloc.&nbsp;

<a href="https://www.wionews.com/videos/uk-pm-rishi-sunak-hails-brexit-as-huge-opportunity-557589">WATCH |&nbsp;</a><a href="https://www.wionews.com/videos/uk-pm-rishi-sunak-hails-brexit-as-huge-opportunity-557589">UK PM Rishi Sunak hails Brexit as 'Huge opportunity'</a>

<iframe allowfullscreen="" autoplay="1" frameborder="0" height="350" src="https://www.wionews.com/videos/uk-pm-rishi-sunak-hails-brexit-as-huge-opportunity-557589/embed" width="560"></iframe>

However, Brexit, a worldwide pandemic and now a war in Europe has broken the back of the country. It hasn't helped the cause that Britain hasn't had a stable political government at 10, Downing Street.&nbsp;

Current Prime Minister Rishi Sunak's predecessor Liz Truss brought one of the most fatal economic packages on the table, which, if implemented, could have spelt the death knell of the UK.&nbsp;

'Brexit has failed' was among the top trends in Britain last weekend. According to a YouGov poll, about 70 per cent of Britons born between 1985 and 1994 said that the Brexit decision was the wrong one.&nbsp;

(With inputs from agencies)

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A damning study conducted by a senior Bank of England policymaker has revealed that Brexit hurt the UK economy astronomically as it suffered business investment loss to the tune of $35 billion (£29 bn) since 2016, roughly amounting to $1,200 (£1,000) per household.

A damning study conducted by a senior Bank of England policymaker has revealed that Brexit hurt the UK economy astronomically as it suffered business investment loss to the tune of $35 billion (£29 bn) since 2016, roughly amounting to $1,200 (£1,000) per household. Jonathan Haskel, a member of the Bank of England's monetary policy committee, inferring from his report said private sector investment had basically flatlined post the 2016 referendum to leave the European Union. "Current productivity penalty is about 1.3 per cent of GDP. That 1.3 per cent of GDP is about £29 billion, or roughly £1000 per household," Haskel was quoted as saying by The Overshoot. "At the end of the forecast period, the penalty goes up to something like 2.8 per cent of GDP, which is very close to the 3.2 per cent number we found using the totally different reduced form methodology based on goods trade volumes." In the last six years, the UK has suffered far more when compared to other major economies of the region. The bad news is that the productivity gap has left long-lasting gashes which are not expected to heal unless there is a drastic turnaround in policy. Haskel added that the economic boom between 2012-2016 plateaued afterwards and the UK quietly dropped to the bottom of G7 countries, investment-wise. Read more: From Brexit to 'Bregret': More young Britons vent discontent, say 'Brexit has failed' The Brexit saga UK decided to leave the EU in 2016 after a lengthy campaign that divided the country into two halves, the remainers and the leavers. Tories were the biggest proponent of leaving the EU citing it would help the UK grow economically having cut the flab of paying the 27-nation bloc. WATCH | UK PM Rishi Sunak hails Brexit as 'Huge opportunity' However, Brexit, a worldwide pandemic and now a war in Europe has broken the back of the country. It hasn't helped the cause that Britain hasn't had a stable political government at 10, Downing Street. Current Prime Minister Rishi Sunak's predecessor Liz Truss brought one of the most fatal economic packages on the table, which, if implemented, could have spelt the death knell of the UK. 'Brexit has failed' was among the top trends in Britain last weekend. According to a YouGov poll, about 70 per cent of Britons born between 1985 and 1994 said that the Brexit decision was the wrong one. (With inputs from agencies) WATCH WION LIVE HERE:

Brexit cost the UK economy $35 billion, says top Bank of England policymaker

The cost of living crisis and also the ongoing industrial action looms large over the United Kingdom and the Bank of England has predicted a recession for the United Kingdom this year.

UK-based think tank NIESR says UK economy will grow marginally by 0.2%

The IMF said the UK economy will contract by 0.6% in 2023, rather than grow slightly as previously predicted. However, the IMF also said that it thinks the UK is now on the right track.

WION Dispatch: IMF forecast UK economy to shrink by 0.6% in 2023

An unexpected growth was registered in the economy of the UK in November as people splurged during the World Cup, stated official data on Friday as analysts warned the country may still face recession because of a crisis due to the high cost of living.&nbsp;

The Office for National Statistics (ONS), issued a statement, saying that even after several strikes, the country’s gross domestic product increased by 0.1 per cent in November. The ONS said that restaurants and pubs majorly boosted the economy as people visited places to watch football matches.

From October, the growth had slowed sharply, partly because of the workers’ strike. ONS’ director of economic statistics Darren Morgan, while speaking to BBC, said, “We definitely saw the impact of industrial action in today's figures.”

ALSO READ|&nbsp;<a href="https://www.wionews.com/business-economy/uks-economy-shrinks-more-than-previously-thought-in-third-quarter-data-545630">UK's economy shrinks more than previously thought in third quarter: Data</a>

“We saw reasonably large falls in rail transport, postal work and warehousing and this sector had the biggest drag on the economy in November,” he added.

“The economy grew a little in November, with increases in telecommunications and computer programming helping to push the economy forward. Pubs and bars also did well as people went out to watch World Cup games,” Morgan said.

ONS further said that the UK economy declined by 0.3 per cent in the last three months, in comparison to the three-month period starting from August.

"Over the last three months ... the economy still shrank -- mainly due to the impact of the extra bank holiday for the funeral of Her Majesty Queen Elizabeth in September," Morgan stated.

The UK government as well as the Bank of England believe that the economy is already facing recession due to rocketing inflation.&nbsp;

WATCH | World Business Watch | UK economy bounces back after two months of recession

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/world-business-watch-uk-economy-bounces-back-after-two-months-of-recession-542529/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

Analyst Sophie Lund-Yates warned, "On a three-monthly basis, the UK still shrank, and a 0.1-per cent gain on a monthly basis smells heavily of stagnation, rather than real growth. The idea that the UK will formally enter a recession soon is still very much a likelihood.”

"The boost in November could stem from extra spending in the economy in the run up to Christmas, and there's real risk now that consumers are going to tighten their belts,” the analyst added.

Commenting on the UK economy’s crisis, CBI economist Alpesh Paleja said, "High inflation is severely impacting household budgets and businesses are facing intense cost pressures. As a result, consumer spending and investment plans are weakening. The question for the government now is not whether we will fall into recession, but how long and deep the recession will be."&nbsp;

(With inputs from agencies) 
&nbsp;

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An unexpected growth was registered in the economy of the UK in November as people splurged during the World Cup, stated official data on Friday as analysts warned the country may still face recession because of a crisis due to the high cost of living.

An unexpected growth was registered in the economy of the UK in November as people splurged during the World Cup, stated official data on Friday as analysts warned the country may still face recession because of a crisis due to the high cost of living. The Office for National Statistics (ONS), issued a statement, saying that even after several strikes, the country’s gross domestic product increased by 0.1 per cent in November. The ONS said that restaurants and pubs majorly boosted the economy as people visited places to watch football matches. From October, the growth had slowed sharply, partly because of the workers’ strike. ONS’ director of economic statistics Darren Morgan, while speaking to BBC, said, “We definitely saw the impact of industrial action in today's figures.” ALSO READ| UK's economy shrinks more than previously thought in third quarter: Data “We saw reasonably large falls in rail transport, postal work and warehousing and this sector had the biggest drag on the economy in November,” he added. “The economy grew a little in November, with increases in telecommunications and computer programming helping to push the economy forward. Pubs and bars also did well as people went out to watch World Cup games,” Morgan said. ONS further said that the UK economy declined by 0.3 per cent in the last three months, in comparison to the three-month period starting from August. "Over the last three months ... the economy still shrank -- mainly due to the impact of the extra bank holiday for the funeral of Her Majesty Queen Elizabeth in September," Morgan stated. The UK government as well as the Bank of England believe that the economy is already facing recession due to rocketing inflation. WATCH | World Business Watch | UK economy bounces back after two months of recession Analyst Sophie Lund-Yates warned, "On a three-monthly basis, the UK still shrank, and a 0.1-per cent gain on a monthly basis smells heavily of stagnation, rather than real growth. The idea that the UK will formally enter a recession soon is still very much a likelihood.” "The boost in November could stem from extra spending in the economy in the run up to Christmas, and there's real risk now that consumers are going to tighten their belts,” the analyst added. Commenting on the UK economy’s crisis, CBI economist Alpesh Paleja said, "High inflation is severely impacting household budgets and businesses are facing intense cost pressures. As a result, consumer spending and investment plans are weakening. The question for the government now is not whether we will fall into recession, but how long and deep the recession will be." (With inputs from agencies)

UK economy registers 0.1 per cent increase in November; still, recession looms

Britons hoping for a new year's, holiday season salary bump amid high inflation and cost of living crisis will likely be met with disappointment. As per a new estimate the average worker's pay next year will fall back to a level last seen more than a decade ago.&nbsp;PwC estimates show that once inflation is taken into account, the average pay in 2023 will fall down to 2006 levels. As per a CNN report, PwC further predicts that real wages which factor in inflation are expected to fall by almost three per cent in 2022. It will see another two per cent fall in 2023.

Watch |&nbsp;TUC: 2022 the worst year for real wage growth in almost 50 years | UK

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Recent weeks saw widespread protests and walkouts across many verticals of the UK economy like railways, schools, hospitals, nurses, and postal services. However, the report confirms that even as inflation hits double digits and the nation witnesses its worst cost-of-living crisis in decades the future of wages isn't that bright.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/uks-economy-shrinks-more-than-previously-thought-in-third-quarter-data-545630">UK's economy shrinks more than previously thought in third quarter: Data</a>

Barret Kupelian, a senior economist at PwC said, "2022 has obviously been a highly challenging year for the UK economy, and it is not surprising that these chilly headwinds will continue throughout 2023."

Also read |&nbsp;<a href="https://www.wionews.com/world/uk-high-inflation-casts-shadow-on-fastest-rise-in-wages-in-20-years-534384">UK: High inflation casts shadow on fastest rise in wages in 20 years</a>

However, the report did offer some hope. It forecasts that in 2023, in spite of the low wages, more than 30,000 workers could join the UK workforce. This as per the PwC will help alleviate staff shortages and reduce economic instability. An increase in immigration too could potentially boost the economy by one per cent, contributing &nbsp;£19 billion ($23 billion)&nbsp;"even as the whole economy contracts," said PwC. 
 
Kupelian further added that inflation in UK is most likely to have peaked in October 2022 and will gradually begin to return to target over the next two years.

(With inputs from agencies)

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You can now write for wionews.com and be a part of the community. Share your stories and opinions with us <a href="https://www.wionews.com/content-contribution-registration-form">here</a>.

Britons hoping for a new year's, holiday season salary bump amid high inflation and cost of living crisis will likely be met with disappointment. As per a new estimate the average worker's pay next year will fall back to a level last seen more than a decade ago.

Britons hoping for a new year's, holiday season salary bump amid high inflation and cost of living crisis will likely be met with disappointment. As per a new estimate the average worker's pay next year will fall back to a level last seen more than a decade ago. PwC estimates show that once inflation is taken into account, the average pay in 2023 will fall down to 2006 levels. As per a CNN report, PwC further predicts that real wages which factor in inflation are expected to fall by almost three per cent in 2022. It will see another two per cent fall in 2023. Watch | TUC: 2022 the worst year for real wage growth in almost 50 years | UK Recent weeks saw widespread protests and walkouts across many verticals of the UK economy like railways, schools, hospitals, nurses, and postal services. However, the report confirms that even as inflation hits double digits and the nation witnesses its worst cost-of-living crisis in decades the future of wages isn't that bright. Also read | UK's economy shrinks more than previously thought in third quarter: Data Barret Kupelian, a senior economist at PwC said, "2022 has obviously been a highly challenging year for the UK economy, and it is not surprising that these chilly headwinds will continue throughout 2023." Also read | UK: High inflation casts shadow on fastest rise in wages in 20 years However, the report did offer some hope. It forecasts that in 2023, in spite of the low wages, more than 30,000 workers could join the UK workforce. This as per the PwC will help alleviate staff shortages and reduce economic instability. An increase in immigration too could potentially boost the economy by one per cent, contributing £19 billion ($23 billion) "even as the whole economy contracts," said PwC. Kupelian further added that inflation in UK is most likely to have peaked in October 2022 and will gradually begin to return to target over the next two years. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

UK average ‘real’ wages in 2023 likely to fall to their lowest level in more than a decade: PwC

The United Kingdom’s Chancellor of the Exchequer, Jeremy Hunt unveiled a number of post-Brexit reforms to City policy, on Friday, referred to as the “Edinburgh reforms”. The announcement was made at an industry roundtable with a group of chief executives from banks and insurers. The over-30-point package partially proposes to reform rules which were introduced after the 2008 financial crisis to protect savers and taxpayers.&nbsp;

The reforms were dubbed the post-Brexit “Big Bang 2.0” by Hunt’s predecessor Kwasi Kwarteng and are reportedly some of the biggest changes since former UK PM Margaret Thatcher's wave of deregulation in the 1980s. More than 30 regulatory reforms will “unlock investment and turbocharge growth in towns and cities across the UK”, said the Treasury, in a statement. &nbsp;&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/world/uk-set-to-announce-post-brexit-reforms-in-financial-services-541428">UK set to announce post-Brexit reforms in financial services</a>

The proposal encompasses a number of plans including consulting on a new central bank digital currency to change tax rules for investment trusts in real estate. Hunt also outlines plans to “repeal, and replace, hundreds of pages of burdensome EU retained laws governing financial services”, in a bid to make the UK one of the “most open, dynamic and competitive financial services hubs in the world.”&nbsp;

“The Edinburgh Reforms seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses,” said Hunt, in a statement. These rules, once created to safeguard people from the financial crisis are now seen as a hindrance to London’s banks and insurers compared to their peers across the world.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/world/rishi-sunak-reportedly-considering-building-swiss-style-economic-relationship-with-eu-535696">Rishi Sunak considering building Swiss-style economic relationship with EU</a>

One of the provisions created in the wake of the 2008 crisis was the ring-fencing rule&nbsp;which separated customer deposits from riskier investment banking operations with the aim to protect them. The Treasury claims that these rules are particularly burdensome on lenders who wish to change them, “while maintaining protections for depositors,” the statement added. &nbsp;

Furthermore, the government will also launch a consultation about regulating rating agencies which review the performance of various companies along environmental, social and governance issues (ESG) to ensure these products are transparent and use consistent standards.&nbsp;

The Edinburgh Reforms also include a number of consultations and discussions around the Consumer Credit Act which regulates credit card purchases and personal loans, a provision which dates back to the 1970s in a bid to “modernise” it.&nbsp;

ALSO WATCH |&nbsp;<a href="https://www.wionews.com/videos/rishi-sunak-government-lowers-income-tax-threshold-amid-economic-downfall-535076">Rishi Sunak government lowers income tax threshold amid economic downfall</a>

Another reform which will be under review as a part of the 30-point plan is the “senior managers' regime” which holds managers and bosses personally and financially responsible for infractions, which Hunts believes in its current form, is too burdensome.&nbsp;

However, the incumbent chancellor has also said that he was mindful of the lessons from the 2008 crisis which brought some UK banks to the brink of potential collapse and that he has taken these steps “very carefully”. &nbsp;

“We have to make sure that we do not unlearn the lessons of 2008, but at the same time recognise that banks today have much stronger balance sheets, and we have a much stronger resolution system if things do go wrong,” said Hunt, during the Financial Times’ Global Boardroom webinar, when asked about the potential risks of these reforms.&nbsp;

UK Prime Minister Rishi Sunak about the “Edinburgh Reforms”

The incumbent UK PM and former finance minister, Rishi Sunak said that the services of the financial sector remain “robust” despite relaxation in banking safeguards.&nbsp;

ALSO WATCH |&nbsp;<a href="https://www.wionews.com/videos/gravitas-has-liz-truss-exit-vindicated-rishi-sunak-527221">Gravitas: Has Liz Truss' exit vindicated Rishi Sunak?</a>

“No, the UK has always had and always will have an incredibly respected and robust system of regulation for the financial services sector,” he told the press in response to the potential risks and when asked if he was being reckless by announcing the relaxation of rules on investment banks.&nbsp;

He added, “But it's also important to make sure the industry is competitive. There are a million people employed in financial services and they're not just in London, in the city. They're spread across the country, in Edinburgh, in Belfast, in Leeds, in Bournemouth.”&nbsp;

The UK PM who was on a visit to RAF Coningsby in Lincolnshire, also insisted that these reforms will ensure the industry remains competitive, create more jobs, and will always be a safe place where consumers will be protected.

ALSO READ |<a href="https://www.wionews.com/world/joe-biden-and-rishi-sunak-reach-agreement-to-increase-gas-exports-from-us-to-uk-540883">&nbsp;Joe Biden, Rishi Sunak agree to double gas exports from US to UK, work on fuel alternatives</a>

Criticism and opposition to the reforms

There has been criticism regarding these reforms, many of which are seemingly in reference to Sunak’s predecessor, <a href="https://www.wionews.com/world/a-44-day-stint-as-pm-putting-uk-economy-into-turmoil-entitles-liz-truss-to-129000-a-year-527584">Liz Truss’ economic plans</a> which have left a lasting impact on the British economy. “We’ve been promised a Big Bang 2.0 on three occasions now, by three different Conservative chancellors,” said the opposition Labour party MP and shadow City minister, Tulip Siddiq.&nbsp;

She added, “The Conservatives have done untold damage to the UK’s global competitiveness and market confidence not just over the last 12 weeks, but also the last 12 years. Reforms such as ring-fencing and the senior managers’ regime were introduced for good reason”.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/world/from-nurses-to-teachers-why-workers-across-industries-in-uk-are-going-on-a-strike-540940">Explained: From nurses to teachers, why workers across UK are going on strike</a>

“The City doesn’t want weak consolation prizes for being sold down the river in the Tories’ Brexit deal, nor more empty promises on deregulation. Its competitiveness depends on high standards, not a race to the bottom,” said the Labour MP.&nbsp;

Meanwhile, Liberal Democrat Treasury spokeswoman, Sarah Olney, called this move, “completely tone-deaf” that the government is increasing taxes for “hard-working families, while slashing taxes and boosting bonuses for the banks.” She added, “Our financial services need good and smart regulation, not more promises of slashing red tape, or a race to the bottom.”&nbsp;

(With inputs from agencies)&nbsp;

The United Kingdom’s Chancellor of the Exchequer, Jeremy Hunt unveiled a number of post-Brexit reforms to City policy, on Friday, referred to as the “Edinburgh reforms”.

The United Kingdom’s Chancellor of the Exchequer, Jeremy Hunt unveiled a number of post-Brexit reforms to City policy, on Friday, referred to as the “Edinburgh reforms”. The announcement was made at an industry roundtable with a group of chief executives from banks and insurers. The over-30-point package partially proposes to reform rules which were introduced after the 2008 financial crisis to protect savers and taxpayers. The reforms were dubbed the post-Brexit “Big Bang 2.0” by Hunt’s predecessor Kwasi Kwarteng and are reportedly some of the biggest changes since former UK PM Margaret Thatcher's wave of deregulation in the 1980s. More than 30 regulatory reforms will “unlock investment and turbocharge growth in towns and cities across the UK”, said the Treasury, in a statement. ALSO READ | UK set to announce post-Brexit reforms in financial services The proposal encompasses a number of plans including consulting on a new central bank digital currency to change tax rules for investment trusts in real estate. Hunt also outlines plans to “repeal, and replace, hundreds of pages of burdensome EU retained laws governing financial services”, in a bid to make the UK one of the “most open, dynamic and competitive financial services hubs in the world.” “The Edinburgh Reforms seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses,” said Hunt, in a statement. These rules, once created to safeguard people from the financial crisis are now seen as a hindrance to London’s banks and insurers compared to their peers across the world. ALSO READ | Rishi Sunak considering building Swiss-style economic relationship with EU One of the provisions created in the wake of the 2008 crisis was the ring-fencing rule which separated customer deposits from riskier investment banking operations with the aim to protect them. The Treasury claims that these rules are particularly burdensome on lenders who wish to change them, “while maintaining protections for depositors,” the statement added. Furthermore, the government will also launch a consultation about regulating rating agencies which review the performance of various companies along environmental, social and governance issues (ESG) to ensure these products are transparent and use consistent standards. The Edinburgh Reforms also include a number of consultations and discussions around the Consumer Credit Act which regulates credit card purchases and personal loans, a provision which dates back to the 1970s in a bid to “modernise” it. ALSO WATCH | Rishi Sunak government lowers income tax threshold amid economic downfall Another reform which will be under review as a part of the 30-point plan is the “senior managers' regime” which holds managers and bosses personally and financially responsible for infractions, which Hunts believes in its current form, is too burdensome. However, the incumbent chancellor has also said that he was mindful of the lessons from the 2008 crisis which brought some UK banks to the brink of potential collapse and that he has taken these steps “very carefully”. “We have to make sure that we do not unlearn the lessons of 2008, but at the same time recognise that banks today have much stronger balance sheets, and we have a much stronger resolution system if things do go wrong,” said Hunt, during the Financial Times’ Global Boardroom webinar, when asked about the potential risks of these reforms. UK Prime Minister Rishi Sunak about the “Edinburgh Reforms” The incumbent UK PM and former finance minister, Rishi Sunak said that the services of the financial sector remain “robust” despite relaxation in banking safeguards. ALSO WATCH | Gravitas: Has Liz Truss' exit vindicated Rishi Sunak? “No, the UK has always had and always will have an incredibly respected and robust system of regulation for the financial services sector,” he told the press in response to the potential risks and when asked if he was being reckless by announcing the relaxation of rules on investment banks. He added, “But it's also important to make sure the industry is competitive. There are a million people employed in financial services and they're not just in London, in the city. They're spread across the country, in Edinburgh, in Belfast, in Leeds, in Bournemouth.” The UK PM who was on a visit to RAF Coningsby in Lincolnshire, also insisted that these reforms will ensure the industry remains competitive, create more jobs, and will always be a safe place where consumers will be protected. ALSO READ | Joe Biden, Rishi Sunak agree to double gas exports from US to UK, work on fuel alternatives Criticism and opposition to the reforms There has been criticism regarding these reforms, many of which are seemingly in reference to Sunak’s predecessor, Liz Truss’ economic plans which have left a lasting impact on the British economy. “We’ve been promised a Big Bang 2.0 on three occasions now, by three different Conservative chancellors,” said the opposition Labour party MP and shadow City minister, Tulip Siddiq. She added, “The Conservatives have done untold damage to the UK’s global competitiveness and market confidence not just over the last 12 weeks, but also the last 12 years. Reforms such as ring-fencing and the senior managers’ regime were introduced for good reason”. ALSO READ | Explained: From nurses to teachers, why workers across UK are going on strike “The City doesn’t want weak consolation prizes for being sold down the river in the Tories’ Brexit deal, nor more empty promises on deregulation. Its competitiveness depends on high standards, not a race to the bottom,” said the Labour MP. Meanwhile, Liberal Democrat Treasury spokeswoman, Sarah Olney, called this move, “completely tone-deaf” that the government is increasing taxes for “hard-working families, while slashing taxes and boosting bonuses for the banks.” She added, “Our financial services need good and smart regulation, not more promises of slashing red tape, or a race to the bottom.” (With inputs from agencies)

Explained: In ‘Edinburgh reforms’, chancellor Hunt outlines sweeping overhaul of UK’s finance sector

UK where ushering in new austerity, the new government is taking first steps to pull back economy from the brink. Announcing the statement, new Finance Minister Jeremy Hunt unveiled an austerity budget on Thursday with $65 of tax hikes and massive spending cuts.

UK's economy slides into recession, Hunt hunts for elusive balance

A month after "Trussonomics", the economic experiment by former UK Prime Minister Liz Truss failed miserably, Chancellor Jeremy Hunt&nbsp;delivered the autumn statement at the House of Commons on Thursday. Hunt announced a total of £55 billion plan in&nbsp;tax rises and spending cuts in his budget statement that was aimed to raise cash to support the economy.

"We are honest about the challenges and fair in our solutions. Yes, we take difficult decisions to tackle inflation and keep mortgage rises down. But our plan also leads to a shallower downturn; lower energy bills; higher long-term growth; and a stronger NHS and education system," Hunt said, acknowledging&nbsp;that in the face of “unprecedented global headwinds”, the British people are worried about their future.

The Chancellor said that he will deliver a plan “to tackle the cost of living crisis and rebuild our [British] economy”.

ALSO READ |&nbsp;&nbsp;<a href="https://www.wionews.com/world/uk-inflation-spurs-to-41-year-high-before-jeremy-hunts-autumn-statement-534697">UK inflation soars to 41-year high before Jeremy Hunt's autumn statement</a>

The UK Chancellor announced that he is not going to change the remit of the Bank of England.&nbsp;

Hunt told MPs: "So the Bank of England, which has done an outstanding job since its independence, now has my wholehearted support in its mission to defeat inflation and I today confirm we will not change its remit."

Chancellor extends windfall tax

Turning to the windfall tax on energy giants, Jeremy Hunt said that he has "no objection to windfall taxes if they are genuinely about windfall profits caused by unexpected increases in energy prices".&nbsp;

He continued: "But any such tax should be temporary, not deter investment and recognise the cyclical nature of many energy businesses."&nbsp;

"Taking account of this, I have decided that from January 1st until March 2028 we will increase the Energy Profits Levy from 25 per cent to 35 per cent."&nbsp;

He also said that "from January 1st, we have also decided to introduce a new, temporary 45 per cent&nbsp;levy on electricity generators".&nbsp;

The combined effect of these measures will bring in £14 billion, the Chancellor said.

Chancellor freezes tax allowances

Jeremy Hunt said he has decided to freeze a range of tax allowances to raise more cash for the Treasury.&nbsp;

He said: "We are also taking difficult decisions on tax-free allowances. I am maintaining at current levels the income tax personal allowance, higher rate threshold, main national insurance thresholds, and inheritance tax thresholds for a further two years taking us to April 2028. Even after that, we will still have the most generous set of tax-free allowances of any G7 country."

The Chancellor also announced that he is "reforming allowances on unearned income".&nbsp;

He said: "The dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024. The Annual Exempt Amount for capital gains tax will be cut from £12,300 to £6,000 next year and then to £3,000 from April 2024. These changes still leave us with more generous allowances overall than countries like Germany, Ireland, France, and Canada."

Electric cars lose exemption from Vehicle Excise Duty

Jeremy Hunt said he has decided "that from April 2025 electric vehicles will no longer be exempt from Vehicle Excise Duty".&nbsp;

On housing, he said: "The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-budget will remain in place but only until 31st March 2025."

The inflation rate in the United Kingdom hit a fresh 41-year high in October, increasing to 11.1 per cent amid the cost of living crisis stoked by rising energy and food prices, in part due to the ongoing war in Ukraine.&nbsp;On an annual basis, food price inflation rose sharply to 16.5 per cent on an annual basis, the highest in 45 years, the UK Office of National Statistics said.

WATCH |&nbsp;<a href="https://www.wionews.com/videos/jeremy-hunt-to-present-uks-autumn-budget-today-vows-to-restore-stability-get-inflation-down-534971">Jeremy Hunt vows to 'restore stability, get inflation down'</a>

For a household with average usage of both gas and electricity, the government in October had capped the bills at £2,500 per month. According to the UK's Office of National Statistics, gas prices have climbed by nearly 130 per cent while electricity prices have risen by close to 66 per cent over the past year.&nbsp; 
&nbsp;

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A month after "Trussonomics", the economic experiment by former UK Prime Minister Liz Truss failed miserably, Chancellor Jeremy Hunt delivered the autumn statement at the House of Commons on Thursday.

A month after "Trussonomics", the economic experiment by former UK Prime Minister Liz Truss failed miserably, Chancellor Jeremy Hunt delivered the autumn statement at the House of Commons on Thursday. Hunt announced a total of £55 billion plan in tax rises and spending cuts in his budget statement that was aimed to raise cash to support the economy. "We are honest about the challenges and fair in our solutions. Yes, we take difficult decisions to tackle inflation and keep mortgage rises down. But our plan also leads to a shallower downturn; lower energy bills; higher long-term growth; and a stronger NHS and education system," Hunt said, acknowledging that in the face of “unprecedented global headwinds”, the British people are worried about their future. The Chancellor said that he will deliver a plan “to tackle the cost of living crisis and rebuild our [British] economy”. ALSO READ | UK inflation soars to 41-year high before Jeremy Hunt's autumn statement The UK Chancellor announced that he is not going to change the remit of the Bank of England. Hunt told MPs: "So the Bank of England, which has done an outstanding job since its independence, now has my wholehearted support in its mission to defeat inflation and I today confirm we will not change its remit." Chancellor extends windfall tax Turning to the windfall tax on energy giants, Jeremy Hunt said that he has "no objection to windfall taxes if they are genuinely about windfall profits caused by unexpected increases in energy prices". He continued: "But any such tax should be temporary, not deter investment and recognise the cyclical nature of many energy businesses." "Taking account of this, I have decided that from January 1st until March 2028 we will increase the Energy Profits Levy from 25 per cent to 35 per cent." He also said that "from January 1st, we have also decided to introduce a new, temporary 45 per cent levy on electricity generators". The combined effect of these measures will bring in £14 billion, the Chancellor said. Chancellor freezes tax allowances Jeremy Hunt said he has decided to freeze a range of tax allowances to raise more cash for the Treasury. He said: "We are also taking difficult decisions on tax-free allowances. I am maintaining at current levels the income tax personal allowance, higher rate threshold, main national insurance thresholds, and inheritance tax thresholds for a further two years taking us to April 2028. Even after that, we will still have the most generous set of tax-free allowances of any G7 country." The Chancellor also announced that he is "reforming allowances on unearned income". He said: "The dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024. The Annual Exempt Amount for capital gains tax will be cut from £12,300 to £6,000 next year and then to £3,000 from April 2024. These changes still leave us with more generous allowances overall than countries like Germany, Ireland, France, and Canada." Electric cars lose exemption from Vehicle Excise Duty Jeremy Hunt said he has decided "that from April 2025 electric vehicles will no longer be exempt from Vehicle Excise Duty". On housing, he said: "The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-budget will remain in place but only until 31st March 2025." The inflation rate in the United Kingdom hit a fresh 41-year high in October, increasing to 11.1 per cent amid the cost of living crisis stoked by rising energy and food prices, in part due to the ongoing war in Ukraine. On an annual basis, food price inflation rose sharply to 16.5 per cent on an annual basis, the highest in 45 years, the UK Office of National Statistics said. WATCH | Jeremy Hunt vows to 'restore stability, get inflation down' For a household with average usage of both gas and electricity, the government in October had capped the bills at £2,500 per month. According to the UK's Office of National Statistics, gas prices have climbed by nearly 130 per cent while electricity prices have risen by close to 66 per cent over the past year. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Chancellor Jeremy Hunt announces tax hikes, spending squeeze in £55 billion autumn budget

The International Monetary Fund said on Sunday that the global economic outlook is even gloomier than projected last month. It cited a steady worsening in purchasing manager surveys in recent months

WION Business News | Global economic outlook getting `gloomier`, says IMF

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