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

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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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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

New UK Prime Minister Rishi Sunak might freeze the country's foreign aid budget for an additional two years, the Telegraph reported citing sources. The current spending on foreign aid for the country is set at 0.5% of national income. Two years ago, the country was forced to cut its foreign aid spending due to a big hit to the finances following the Covid-19 pandemic.&nbsp;

Sunak had last year said that foreign spending should return to 0.7 per cent of economic output by 2024-2025. However, Telegraph has reported that officials are considering extending the foreign aid spending cut by another two years till 2026-2027.

Also Read |&nbsp;<a href="https://www.wionews.com/world/try-harder-uk-pm-rishi-sunak-confronted-by-patient-over-nurses-pay-529348">'You need to try harder': Patient confronts Sunak over nurses' pay</a>

Deeper cuts are also on the cards, along with an option to peg foreign aid spending to inflation for three years in the future. The government is currently drawing up spending cuts and cancelling tax cuts. Inflation is at a high with cost of mortgages rising and food, fuel and heating getting costlier.&nbsp;

Earlier on Friday, Sunak had said that difficult decisions will have to be taken to get British government borrowing and debt on a sustainable path. He further said that he was confident of fixing the economy.

"We face lots of challenges as a country, but I am confident that we can fix the economy," Sunak told journalists during a visit to a hospital in south London.

"The Chancellor has already said of course difficult decisions are going to have to be made and I'm going to sit down and work through those with him ... we need to do these things so that we can get our borrowing and debt back on a sustainable path."

(With inputs from agencies)

&nbsp;

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New UK Prime Minister Rishi Sunak might freeze the country's foreign aid budget for an additional two years, the Telegraph reported citing sources. The current spending on foreign aid for the country is set at 0.

New UK Prime Minister Rishi Sunak might freeze the country's foreign aid budget for an additional two years, the Telegraph reported citing sources. The current spending on foreign aid for the country is set at 0.5% of national income. Two years ago, the country was forced to cut its foreign aid spending due to a big hit to the finances following the Covid-19 pandemic. Sunak had last year said that foreign spending should return to 0.7 per cent of economic output by 2024-2025. However, Telegraph has reported that officials are considering extending the foreign aid spending cut by another two years till 2026-2027. Also Read | 'You need to try harder': Patient confronts Sunak over nurses' pay Deeper cuts are also on the cards, along with an option to peg foreign aid spending to inflation for three years in the future. The government is currently drawing up spending cuts and cancelling tax cuts. Inflation is at a high with cost of mortgages rising and food, fuel and heating getting costlier. Earlier on Friday, Sunak had said that difficult decisions will have to be taken to get British government borrowing and debt on a sustainable path. He further said that he was confident of fixing the economy. "We face lots of challenges as a country, but I am confident that we can fix the economy," Sunak told journalists during a visit to a hospital in south London. "The Chancellor has already said of course difficult decisions are going to have to be made and I'm going to sit down and work through those with him ... we need to do these things so that we can get our borrowing and debt back on a sustainable path." (With inputs from agencies)

Sunak planning to extend freeze on foreign spending by two years: Report

Despite achieving record global profits of about $30 billion (£26 billion) so far this year, Shell has paid zero windfall tax in the UK, sparking demands for the government to revisit a scheme that was meant to raise billions to address the cost of living problem.

The oil business with headquarters in the UK said that it had not paid the tax and did not anticipate doing so during 2022 since its British corporate entity did not turn a profit during the quarter, in part due to significant investment on further oil drilling in the North Sea.

When Rishi Sunak was chancellor, he proposed the energy earnings levy in May to assist pay for support to&nbsp;British households affected by the cost of living problem. Sunak assumed the office&nbsp;of the prime minister of&nbsp;UK on Tuesday.

Also read |&nbsp;<a href="https://www.wionews.com/world/royal-mint-begins-production-of-first-50p-coins-featuring-king-charles-529018">UK: Royal Mint begins production of first 50p coins featuring King Charles</a>

The government had anticipated receiving £5 billion from the energy earnings levy, but some economists have cautioned that the actual amount may be substantially lower due to extensive use of tax breaks.

While the Trades Union Congress called for a reconsideration and stated that the UK required a "real windfall tax," Labour referred to Shell's earnings as "obscene".

After facing significant political pressure, Sunak unveiled the plan, acknowledging that the industry was "making extraordinary profits, not as a result of recent changes to risk-taking, innovation, or efficiency, but as a result of surging global commodity prices driven in part by Russia's war" in Ukraine.

However, Sunak's plan also provided increased tax incentives for spending money on oilfield exploration in the North Sea. Businesses may save 91p on taxes for every £1 invested in the North Sea. Additionally, it excludes earnings from the company's forecourts, refineries, and trading of oil and gas cargoes.

Sinead Gorman, the financial director of Shell, said that the business did not anticipate paying anything this year in accordance with the energy profits levy.

Also read |&nbsp;<a href="https://www.wionews.com/world/this-years-political-crisis-in-uk-could-cost-the-taxpayer-up-to-ps709000-report-528996">This year's political crisis in UK could cost the taxpayer up to £709,000: Report</a>

“Heavy capex [capital expenditure] has meant that we haven’t had extra tax coming through in this quarter yet,” she said. “I do expect to see that extra tax … to happen quite early in the first quarter of 2023, but we’ll see what plays out with prices as well.”

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Despite achieving record global profits of about $30 billion (£26 billion) so far this year, Shell has paid zero windfall tax in the UK, sparking demands for the government to revisit a scheme that was meant to raise billions to address the cost of living problem.

Despite achieving record global profits of about $30 billion (£26 billion) so far this year, Shell has paid zero windfall tax in the UK, sparking demands for the government to revisit a scheme that was meant to raise billions to address the cost of living problem. The oil business with headquarters in the UK said that it had not paid the tax and did not anticipate doing so during 2022 since its British corporate entity did not turn a profit during the quarter, in part due to significant investment on further oil drilling in the North Sea. When Rishi Sunak was chancellor, he proposed the energy earnings levy in May to assist pay for support to British households affected by the cost of living problem. Sunak assumed the office of the prime minister of UK on Tuesday. Also read | UK: Royal Mint begins production of first 50p coins featuring King Charles The government had anticipated receiving £5 billion from the energy earnings levy, but some economists have cautioned that the actual amount may be substantially lower due to extensive use of tax breaks. While the Trades Union Congress called for a reconsideration and stated that the UK required a "real windfall tax," Labour referred to Shell's earnings as "obscene". After facing significant political pressure, Sunak unveiled the plan, acknowledging that the industry was "making extraordinary profits, not as a result of recent changes to risk-taking, innovation, or efficiency, but as a result of surging global commodity prices driven in part by Russia's war" in Ukraine. However, Sunak's plan also provided increased tax incentives for spending money on oilfield exploration in the North Sea. Businesses may save 91p on taxes for every £1 invested in the North Sea. Additionally, it excludes earnings from the company's forecourts, refineries, and trading of oil and gas cargoes. Sinead Gorman, the financial director of Shell, said that the business did not anticipate paying anything this year in accordance with the energy profits levy. Also read | This year's political crisis in UK could cost the taxpayer up to £709,000: Report “Heavy capex [capital expenditure] has meant that we haven’t had extra tax coming through in this quarter yet,” she said. “I do expect to see that extra tax … to happen quite early in the first quarter of 2023, but we’ll see what plays out with prices as well.” WATCH WION LIVE HERE:

Energy giant Shell paid no windfall taxes in the UK despite record-breaking worldwide earnings

Newly elected British Prime Minister Rishi Sunak will not be announcing his plan to repair the public finances of the country as scheduled on October 31. According to Finance Minister Jeremy Hunt, the public will have to wait till November 17 for the much-anticipated official announcement.

"The prime minister&nbsp;and I have decided that it is&nbsp;prudent to make that statement on the 17th of November," Hunt&nbsp;said in a televised statement on Wednesday, reported Reuters.

Also read |&nbsp;<a href="https://www.wionews.com/world/uk-politics-live-pm-rishi-sunak-set-to-face-opposition-for-first-time-528477" hreflang="en">UK politics LIVE: UK PM Rishi Sunak faces Opposition in his first PMQ</a>

The United Kingdom is currently in the middle of an economic crisis which was made worse by former PM Liz Truss’ unfunded tax cuts. While the measures announced in the mini-budget resulted in both Truss and former finance minister Kwasi Kwarteng losing their jobs, they also propelled the&nbsp;fall of the British pound to its lowest against the United States dollar while drawing criticism from many financial institutions.

According to BBC, the plan will outline the government's plan to counter a budget shortfall that exceeds $45 billion. The measures are expected to include an interception by the Bank of England.&nbsp;

Also read |&nbsp;<a href="https://www.wionews.com/world/rishi-sunak-becomes-uks-richest-pm-with-more-wealth-than-king-charles-iii-528520" hreflang="en">Rishi Sunak becomes UK's richest PM with more wealth than King Charles III</a>

"Our number one priority is economic stability and&nbsp;restoring confidence that the&nbsp;UK&nbsp;is a country that&nbsp;pays its way and for that reason, the medium-term fiscal plan is&nbsp;extremely important," Hunt said. "I want to confirm that it will demonstrate debt falling&nbsp;over the medium term."

While the delay allows the government to make more amendments to the plan, it poses a challenge for the BoE which will be publishing its forecasts without any idea about the government plans.

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Newly elected British Prime Minister Rishi Sunak will not be announcing his plan to repair the public finances of the country as scheduled on October 31. According to Finance Minister Jeremy Hunt, the public will have to wait till November 17 for the much-anticipated official announcement.

Newly elected British Prime Minister Rishi Sunak will not be announcing his plan to repair the public finances of the country as scheduled on October 31. According to Finance Minister Jeremy Hunt, the public will have to wait till November 17 for the much-anticipated official announcement. "The prime minister and I have decided that it is prudent to make that statement on the 17th of November," Hunt said in a televised statement on Wednesday, reported Reuters. Also read | UK politics LIVE: UK PM Rishi Sunak faces Opposition in his first PMQ The United Kingdom is currently in the middle of an economic crisis which was made worse by former PM Liz Truss’ unfunded tax cuts. While the measures announced in the mini-budget resulted in both Truss and former finance minister Kwasi Kwarteng losing their jobs, they also propelled the fall of the British pound to its lowest against the United States dollar while drawing criticism from many financial institutions. According to BBC, the plan will outline the government's plan to counter a budget shortfall that exceeds $45 billion. The measures are expected to include an interception by the Bank of England. Also read | Rishi Sunak becomes UK's richest PM with more wealth than King Charles III "Our number one priority is economic stability and restoring confidence that the UK is a country that pays its way and for that reason, the medium-term fiscal plan is extremely important," Hunt said. "I want to confirm that it will demonstrate debt falling over the medium term." While the delay allows the government to make more amendments to the plan, it poses a challenge for the BoE which will be publishing its forecasts without any idea about the government plans.

Rishi Sunak postpones announcement of plan to uplift UK economy to November 17

The United Kingdom is also facing some serious economic problems. The ratings agency Moody's has downgraded UK's economic outlook to 'negative' from stable. The agency's analysts have started policy uncertainty amidst high inflation and weaker growth prospects.

Uphill task for UK's new chancellor as economic outlook downgraded to 'negative'

British inflation rose to a 40-year high in September, rising above 10 per cent on soaring food prices, official data showed Wednesday. A cost-of-living crisis is currently gripping the country and people are being forced to cut down on basic consumptions.

The Consumer Prices Index accelerated to 10.1 per cent on an annual basis, up from 9.9 per cent in August, the Office for National Statistics said in a statement.

The September rate matched the level in July and is the highest in 40 years, also as a result of sky-high energy bills.

Also Read |&nbsp;<a href="https://www.wionews.com/world/liz-truss-declares-she-will-increase-corporation-tax-just-hours-after-sacking-her-finance-minister-525494">After sacking her finance minister, UK PM Liz Truss declares she will hike corporation tax</a>

"I understand that families across the country are struggling with rising prices and higher energy bills," Britain's new finance minister Jeremy Hunt said in a separate statement.

"This government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone."

UK markets witnessed chaos after uncosted tax cuts were made by the government. Most of the measures of the "mini budget" have now been reversed, leaving Prime Minister Liz Truss red-faced. Questions began swirling over her future, but she apologised and said that she will lead UK into the next elections.

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Following widespread criticism, Truss sacked Kwasi Kwarteng as chancellor after less than six weeks in the role.&nbsp;

Analysts said Wednesday's data would put pressure on the Bank of England to keep raising its main interest rate by sizeable amounts.

Capital Economics noted that the BoE could hike its rate by as much as one percentage point to 3.25 per cent at its next meeting in November.

(With inputs from agencies)

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British inflation rose to a 40-year high in September, rising above 10 per cent on soaring food prices, official data showed Wednesday. A cost-of-living crisis is currently gripping the country and people are being forced to cut down on basic consumptions.

British inflation rose to a 40-year high in September, rising above 10 per cent on soaring food prices, official data showed Wednesday. A cost-of-living crisis is currently gripping the country and people are being forced to cut down on basic consumptions. The Consumer Prices Index accelerated to 10.1 per cent on an annual basis, up from 9.9 per cent in August, the Office for National Statistics said in a statement. The September rate matched the level in July and is the highest in 40 years, also as a result of sky-high energy bills. Also Read | After sacking her finance minister, UK PM Liz Truss declares she will hike corporation tax "I understand that families across the country are struggling with rising prices and higher energy bills," Britain's new finance minister Jeremy Hunt said in a separate statement. "This government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone." UK markets witnessed chaos after uncosted tax cuts were made by the government. Most of the measures of the "mini budget" have now been reversed, leaving Prime Minister Liz Truss red-faced. Questions began swirling over her future, but she apologised and said that she will lead UK into the next elections. × Following widespread criticism, Truss sacked Kwasi Kwarteng as chancellor after less than six weeks in the role. Analysts said Wednesday's data would put pressure on the Bank of England to keep raising its main interest rate by sizeable amounts. Capital Economics noted that the BoE could hike its rate by as much as one percentage point to 3.25 per cent at its next meeting in November. (With inputs from agencies)

UK inflation accelerates to 40-year high as food prices soar further

The Bank of England (BoE) will buy more government bonds to try and stabilise market conditions, it said after issuing a fresh warning of a "material risk" to financial stability. Notably, markets went into a frenzy, driving up borrowing costs after the emergency scheme started following September's mini-budget.&nbsp;

The week had already seen action taken by the BoE and UK government, aimed at bringing calm to bond markets in particular as state borrowing soars.

Also Read |&nbsp;<a href="https://www.wionews.com/world/liz-truss-preparing-for-another-u-turn-this-time-on-welfare-payments-524207">Liz Truss preparing for another U-turn; this time on welfare payments</a>

Prime Minister Liz Truss's government had unveiled debt-fuelled tax cuts in a mini-budget last month. The budget led to the pound falling to a record low.

In a statement, the BoE said the latest action would "act as a further backstop to restore orderly market conditions".

Government borrowing costs rose again sharply after the Bank said the scheme would end as planned on Friday. The dramatic market movements also put some pension funds at risk of collapse, leading to the Bank of England &nbsp;stepping in to take emergency action.&nbsp;

The Bank warned of a fresh downturn in markets after government bonds saw a "significant repricing" at the start of the week. It will buy a wider range of bonds as well as continue to buy bonds as part of the September 28 emergency measures.&nbsp;

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Finance minister Kwasi Kwarteng is set to unveil debt-reduction plans and independent economic predictions on October 31. The move comes after Chancellor of the Exchequer Kwarteng was forced to axe a tax cut for the rich due to an outrage in the country over it. Millions of Britons are facing a cost-of-living crisis with UK inflation around 10 per cent.

(With inputs from agencies)

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The Bank of England (BoE) will buy more government bonds to try and stabilise market conditions, it said after issuing a fresh warning of a "material risk" to financial stability.

The Bank of England (BoE) will buy more government bonds to try and stabilise market conditions, it said after issuing a fresh warning of a "material risk" to financial stability. Notably, markets went into a frenzy, driving up borrowing costs after the emergency scheme started following September's mini-budget. The week had already seen action taken by the BoE and UK government, aimed at bringing calm to bond markets in particular as state borrowing soars. Also Read | Liz Truss preparing for another U-turn; this time on welfare payments Prime Minister Liz Truss's government had unveiled debt-fuelled tax cuts in a mini-budget last month. The budget led to the pound falling to a record low. In a statement, the BoE said the latest action would "act as a further backstop to restore orderly market conditions". Government borrowing costs rose again sharply after the Bank said the scheme would end as planned on Friday. The dramatic market movements also put some pension funds at risk of collapse, leading to the Bank of England stepping in to take emergency action. The Bank warned of a fresh downturn in markets after government bonds saw a "significant repricing" at the start of the week. It will buy a wider range of bonds as well as continue to buy bonds as part of the September 28 emergency measures. × Finance minister Kwasi Kwarteng is set to unveil debt-reduction plans and independent economic predictions on October 31. The move comes after Chancellor of the Exchequer Kwarteng was forced to axe a tax cut for the rich due to an outrage in the country over it. Millions of Britons are facing a cost-of-living crisis with UK inflation around 10 per cent. (With inputs from agencies)

Bank of England intervenes again amid warning of 'material risk' to financial stability

According to the Bank of England, the pension funds which are managing vast sums on behalf of retired people in the UK came close to a collapse after an “unprecedented” meltdown in UK government bond markets following the Chancellor of the Exchequer, Kwasi Kwarteng’s mini-budget.&nbsp;

The central bank explained how the drastic increase in interest rates on long-dated UK government bonds in the days following the mini-budget announcement had triggered a “self-reinforcing” spiral in debt markets, said the Guardian. This threatened the stability of the British financial system.&nbsp;

The Bank of England stepped in last week after the British pound collapsed and became the lowest ever in history against the dollar. On the other hand, the interest rates on rates on UK government bonds rose to the highest ever since the 2008 global financial crisis.&nbsp;

In a letter to the Commons Treasury committee, the Bank’s deputy governor for financial stability, Jon Cunliffe while explaining the bank’s intervention suggested that the biggest market movements came after the chancellor’s announcement of the mini-budget.&nbsp; 
 
ALSO WATCH:&nbsp;<a href="https://www.wionews.com/videos/uk-unveils-mini-budget-historic-tax-cuts-and-borrowing-in-uks-new-economic-agenda-519054">UK unveils mini budget; historic tax cuts and borrowing in UK's new economic agenda</a>

Explaining its emergency intervention to subdue the financial market turmoil they said how more than one trillion pounds invested in pension funds came under severe strain and a large number of which might have gone bust.&nbsp;

Reportedly, if they did not intervene and promised to buy 65 billion pounds of government debt, the funds managing money on behalf of pensioners “would have been left with negative net asset value” across the country. Subsequently, they would also have not been able to meet cash demands.&nbsp;

“As a result, it was likely that these funds would have to begin the process of winding up the following morning,” said the bank. They also went on to elucidate how the meltdown would have sent ripples through Britain’s financial system. This would have caused, “excessive and sudden tightening of financing conditions for the real economy”.

The currency had been “broadly stable” when on September 22 the bank increased interest rates. The long-term interest rates on government bonds rose by about 20 basis points during that time. However, after Kwarteng’s speech about 45 billion pounds of unfunded tax cuts, the Bank’s market intelligence was able to identify concerns by the pension fund managers.&nbsp;

Ministers had tried to argue that the turmoil in the market was reflective of global factors, the bank undermined the suggestion and published a chart which highlights a sharp rise in 30-year borrowing costs after the mini-budget. To show that this rise was not replicated in the US or the EU.&nbsp;

Amid this market turmoil, the value of UK government bonds fell sharply as investors began to lose faith in the UK Prime Minister Liz Truss’ administration to run a sustainable tax and spending policy. According to the report, this resulted in pension funds invested in liability-driven investment (LDI) schemes facing rolling “margin calls” as the value of the bonds pledged as collateral collapsed.&nbsp;

ALSO READ:&nbsp;<a href="https://www.wionews.com/world/proposed-uk-tax-cuts-caused-a-little-turbulence-says-finance-minister-kwasi-kwarteng-522165">Proposed UK tax cuts caused ‘a little turbulence’, says finance minister Kwasi Kwarteng</a>

During the ongoing “self-reinforcing downward spiral” the funds moved to sell other long-dated bonds to meet cash demands which increased pressure in the bond market. The bank indicated that they heard intelligence that funds were preparing to sell at least 50 billion pounds of long-dated government bonds in a short time, which was at least four times the usual 12 billion pound average market trading volumes in recent weeks, said the report.&nbsp;

Prior to the bank intervention, the yields on 30-year UK government bonds reportedly rose by 35 basis points on two separate days. The biggest daily rise seen since the data that has been dating back to the beginning of this century was 29 basis points.&nbsp;

However, on Thursday, a Treasury spokesperson did not budge from their previous stance and blamed the market turmoil on global issues, “While the UK has seen disruption, global financial markets have also seen significant volatility in recent weeks.”&nbsp;

They added, the economy is in a “competitive position” and attributed it to the lowest level of unemployment in the country for almost 50 years and the second lowest net debt to GDP ratio among the G7 countries.&nbsp;

“Our growth plan will unleash growth and make the UK more competitive. The government is committed to strong fiscal discipline and to debt falling as a percentage of GDP over the medium term,” said the spokesperson. Indicating that further details will be shared during the upcoming medium-term fiscal plan shortly.&nbsp; 
&nbsp;

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According to the Bank of England, the pension funds which are managing vast sums on behalf of retired people in the UK came close to a collapse after an “unprecedented” meltdown in UK government bond markets following the Chancellor of the Exchequer, Kwasi Kwarteng’s mini-budget.

According to the Bank of England, the pension funds which are managing vast sums on behalf of retired people in the UK came close to a collapse after an “unprecedented” meltdown in UK government bond markets following the Chancellor of the Exchequer, Kwasi Kwarteng’s mini-budget. The central bank explained how the drastic increase in interest rates on long-dated UK government bonds in the days following the mini-budget announcement had triggered a “self-reinforcing” spiral in debt markets, said the Guardian. This threatened the stability of the British financial system. The Bank of England stepped in last week after the British pound collapsed and became the lowest ever in history against the dollar. On the other hand, the interest rates on rates on UK government bonds rose to the highest ever since the 2008 global financial crisis. In a letter to the Commons Treasury committee, the Bank’s deputy governor for financial stability, Jon Cunliffe while explaining the bank’s intervention suggested that the biggest market movements came after the chancellor’s announcement of the mini-budget. ALSO WATCH: UK unveils mini budget; historic tax cuts and borrowing in UK's new economic agenda Explaining its emergency intervention to subdue the financial market turmoil they said how more than one trillion pounds invested in pension funds came under severe strain and a large number of which might have gone bust. Reportedly, if they did not intervene and promised to buy 65 billion pounds of government debt, the funds managing money on behalf of pensioners “would have been left with negative net asset value” across the country. Subsequently, they would also have not been able to meet cash demands. “As a result, it was likely that these funds would have to begin the process of winding up the following morning,” said the bank. They also went on to elucidate how the meltdown would have sent ripples through Britain’s financial system. This would have caused, “excessive and sudden tightening of financing conditions for the real economy”. The currency had been “broadly stable” when on September 22 the bank increased interest rates. The long-term interest rates on government bonds rose by about 20 basis points during that time. However, after Kwarteng’s speech about 45 billion pounds of unfunded tax cuts, the Bank’s market intelligence was able to identify concerns by the pension fund managers. Ministers had tried to argue that the turmoil in the market was reflective of global factors, the bank undermined the suggestion and published a chart which highlights a sharp rise in 30-year borrowing costs after the mini-budget. To show that this rise was not replicated in the US or the EU. Amid this market turmoil, the value of UK government bonds fell sharply as investors began to lose faith in the UK Prime Minister Liz Truss’ administration to run a sustainable tax and spending policy. According to the report, this resulted in pension funds invested in liability-driven investment (LDI) schemes facing rolling “margin calls” as the value of the bonds pledged as collateral collapsed. ALSO READ: Proposed UK tax cuts caused ‘a little turbulence’, says finance minister Kwasi Kwarteng During the ongoing “self-reinforcing downward spiral” the funds moved to sell other long-dated bonds to meet cash demands which increased pressure in the bond market. The bank indicated that they heard intelligence that funds were preparing to sell at least 50 billion pounds of long-dated government bonds in a short time, which was at least four times the usual 12 billion pound average market trading volumes in recent weeks, said the report. Prior to the bank intervention, the yields on 30-year UK government bonds reportedly rose by 35 basis points on two separate days. The biggest daily rise seen since the data that has been dating back to the beginning of this century was 29 basis points. However, on Thursday, a Treasury spokesperson did not budge from their previous stance and blamed the market turmoil on global issues, “While the UK has seen disruption, global financial markets have also seen significant volatility in recent weeks.” They added, the economy is in a “competitive position” and attributed it to the lowest level of unemployment in the country for almost 50 years and the second lowest net debt to GDP ratio among the G7 countries. “Our growth plan will unleash growth and make the UK more competitive. The government is committed to strong fiscal discipline and to debt falling as a percentage of GDP over the medium term,” said the spokesperson. Indicating that further details will be shared during the upcoming medium-term fiscal plan shortly. 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.

Report: UK central bank says pension funds nearly collapsed amid market meltdown

The United Kingdom's credit outlook was lowered to negative from stable by Fitch Ratings, which cited risk the government's new growth plan could increase the nation's fiscal deficit.

World Business Watch: Fitch revises the United Kingdom's outlook to negative

In a humiliating U-turn, the UK government has been forced to abandon its plan to abolish the 45% top rate of income tax, it comes after a growing Conservative party revolt over the policy and turbulent reaction from the markets.

UK economy | Liz Truss' U-Turn on 45% tax cut for the rich

In an economic agenda that floored financial markets, Britain's new finance minister Kwasi Kwarteng unleashed historic tax cuts and huge increases in borrowing on Friday.

Putting a price tag on the spending plans of Prime Minister Liz Truss, Kwarteng scrapped the country's top rate of income tax.

With two-year gilts on track for their biggest one-day fall since at least 2009, investors unloaded short-dated British government bonds as fast as they could.

According to Kwarteng, support for household energy bills announced by Truss will cost 60 billion pounds for the next six months.

While Britain raised its debt issuance plans for the current financial year by 72.4 billion pounds ($81 billion), tax cuts would cost a further 45 billion pounds.

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Highlighting that the British government's plan is to expand the supply side of the economy through tax incentives and reform, Kwarteng said ''we will turn the vicious cycle of stagnation into a virtuous cycle of growth.''

Calling the plans a "desperate gamble," the opposition Labour Party said the tax cuts were the largest since the budget of 1972.

Sparking public finance concerns and mounting fear of recession, the&nbsp;British pound tumbled Friday to a 37-year low under $1.10.

At a time when it is battling inflation near a 40-year high, Truss's energy price cap would limit inflation in the short term but that government stimulus was likely to boost inflation pressures further out, according to the Bank of England.

Financial experts believe that some investors are also wary about Truss's willingness to borrow big to fund growth as the pound performing worse against the dollar than almost any other major currency.

(With inputs from agencies)

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In an economic agenda that floored financial markets, Britain's new finance minister Kwasi Kwarteng unleashed historic tax cuts and huge increases in borrowing on Friday.

In an economic agenda that floored financial markets, Britain's new finance minister Kwasi Kwarteng unleashed historic tax cuts and huge increases in borrowing on Friday. Putting a price tag on the spending plans of Prime Minister Liz Truss, Kwarteng scrapped the country's top rate of income tax. With two-year gilts on track for their biggest one-day fall since at least 2009, investors unloaded short-dated British government bonds as fast as they could. According to Kwarteng, support for household energy bills announced by Truss will cost 60 billion pounds for the next six months. While Britain raised its debt issuance plans for the current financial year by 72.4 billion pounds ($81 billion), tax cuts would cost a further 45 billion pounds. × Highlighting that the British government's plan is to expand the supply side of the economy through tax incentives and reform, Kwarteng said ''we will turn the vicious cycle of stagnation into a virtuous cycle of growth.'' Calling the plans a "desperate gamble," the opposition Labour Party said the tax cuts were the largest since the budget of 1972. Sparking public finance concerns and mounting fear of recession, the British pound tumbled Friday to a 37-year low under $1.10. At a time when it is battling inflation near a 40-year high, Truss's energy price cap would limit inflation in the short term but that government stimulus was likely to boost inflation pressures further out, according to the Bank of England. Financial experts believe that some investors are also wary about Truss's willingness to borrow big to fund growth as the pound performing worse against the dollar than almost any other major currency. (With inputs from agencies) Watch WION's live TV here: ×

Britain's new finance minister unleashes historic tax cuts, huge increases in borrowing

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