Concerns that low-income households are turning to expensive forms of lending as inflation soarsA surge in credit card borrowing to a record high last month has prompted concerns that low-income households are turning to expensive forms of lending to cope with rising costs of food, clothing and fuel.Figures from the Bank of England showed credit card borrowing jumped by £1.5bn in February to £59.5bn – the highest since records began in 1993 – pushing the total amount of unsecured lending up by 90% on the prior month to £1.9bn. Continue reading...

Sunak veered from the fantasy that he was cutting taxes to cold hard reality when admitting Brexit has made the UK poorerRemember the happy clappy Rishi Sunak? The caring Dishy Rishi? The chancellor who could look lovingly into the camera at Downing Street press conferences and promise that he would have our backs? Always. The Good Samaritan who smiled as he dug deep behind the sofa to pay our wages when our employers could not?That Sunak is long gone. The new Rishi is a far snippier iteration. Someone who walks out of interviews when he doesn’t like the questions. Someone who is visibly irritated to have been forced to fill in a police questionnaire about the birthday party of a boss he cannot stand – and who cannot stand him; the dislike is mutual. Someone who is beginning to realise he might just have missed the boat. Continue reading...

This blog is now closed. You can read our full report on Sunak’s evidence to MP here

UK government sells more of stake in group formerly known as Royal Bank of Scotland at a loss over 2008 priceNatWest Group has returned to majority private ownership after it agreed to buy back £1.2bn of shares from the UK government, more than 13 years after the company was bailed out by taxpayers at the height of the financial crisis.The company, formerly known as Royal Bank of Scotland Group (RBS), said it had agreed to make an off-market purchase of 550m shares, or 4.91% of its share capital, from HM Treasury at Friday’s closing price of 220.5p, in a statement to the stock market on Monday. Continue reading...

Consumers and businesses will come under severe pressure from cost of living squeeze, says governorBritain’s economy is expected to suffer a growth slowdown amid the biggest single shock from energy prices since the 1970s, the governor of the Bank of England has warned.Andrew Bailey said there were signs of slowing demand from consumers and businesses as they come under heavy pressure from the cost of living squeeze, with soaring prices for gas, electricity and other goods and services. Continue reading...

Cooking veg with less energy | Rich rewards for those at the top | From Vlad to Vlod? | Tea service at the cinema | Ferry sackingsRe your article (Food bank users declining potatoes as cooking costs too high, says Iceland boss, 23 March), local authorities should provide a microwave for people in receipt of help from food banks. A few minutes in a microwave is long enough to cook most vegetables, and retains the goodness that is leached out in a pot of boiling water.

A decade of austerity swung opinion behind state intervention, while work is no longer a guarantee to lift people out of povertyWhere did it all go wrong for Rishi Sunak? The most popular chancellor in four decades now pilloried for a spring statement which failed to meet the challenge of the worst hit to living standards since the Suez crisis.Attacked for promising tax cuts while stealthily driving up the tax burden to the highest level since Clement Attlee was prime minister in the late 1940s, criticised for putting Instagram moments ahead of the serious task at hand, here was an out-of-touch ivory tower politician who would allow living costs to rise faster than pensions and benefits. It was the mini-budget to please no one. Continue reading...

Critics of UK chancellor’s spring statement say it prioritises debt reduction and fails to provide support to lower-income households• Budget calculator: how will your income change?Rishi Sunak has battled to protect the Treasury from rising prices while allowing inflation to ravage the finances of low and middle-income households. That is the accusation levelled at the chancellor after a spring budget statement that put government debt reduction ahead of calls for extra welfare support for hard-pressed families.Sunak’s dilemma, as inflation heads towards 8% and possibly beyond, is whether he can afford to increase the Treasury’s outlay on welfare and public services, including public sector pay. Continue reading...

The chancellor is keen to show he’s a tax cutter, but with war and the aftermath of Covid, who will believe his 1p reduction is in any way affordable?Rishi Sunak has put in place one of the essential building blocks of a Tory victory at the next general election – a cut in income tax. During his Commons speech last week, the chancellor was cheered by backbench Conservatives, who believe the promise of a 1p cut in the basic rate to 19p before the likely date in 2024 would improve their chances of re-election.But Sunak, always keen to portray himself as a tax cutter at heart, came in for ridicule once independent figures showed that the average household would pay more tax in two years’ time, even with the 1p reduction in place. That will be ensured by next month’s rise in national insurance contributions and a four-year freeze on personal tax thresholds, which means more earned income is subject to tax. Continue reading...

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My father, Frederick David, who has died aged 97, was a Holocaust refugee from Vienna who arrived in 1939 in London, the city that became his home. He trained as an economist, joining the manufacturing and distribution company Bunzl where, by the time of his retirement in 1988, he was managing director.Frederick – known as Friedl – was raised in Josefstadt in central Vienna. The son of Hugo David and Gertrud Spitzer, Friedl grew up in a large family of aunts and uncles – a colourful parade of eccentrics he would describe with customary wit. His family knew many of the celebrated Viennese artists of the time, including Gustav Klimt, Oskar Kokoschka and Egon Schiele, through his great-great uncle Alfred Spitzer, their lawyer. Continue reading...

Experts say absolute poverty could hit a fifth of UK population following chancellor’s mini-budgetRishi Sunak has sought to defend his mini-budget against accusations he failed to shield Britain’s poorest families from the worst hit to living standards in six decades, as economists warned 1.3 million people will fall into absolute poverty next year.Amid heavy criticism of Wednesday’s spring statement from opposition leaders and his own back benches, experts from the Institute for Fiscal Studies (IFS) and Resolution Foundation thinktanks said the chancellor could have done more to help those most at need. Continue reading...

Analysis: Britain has ceased to be a country where workers can expect to get better off year after year

Rolling coverage of the latest economic and financial news

As households face the biggest drop in living standards since the 1950s, five images show the scale of the cost of living crisis

Labour asks if Boris Johnson was playing ‘fast and loose with the truth’ over his threat to to take P&O Ferries to court. For the latest on Russia’s invasion of Ukraine, please follow our dedicated live blog

Exclusive: Ngozi Okonjo-Iweala says impact of conflict on food prices and hunger could be substantial

Services sector growing rapidly after Covid disruption but manufacturing slips as Ukraine invasion dents optimismBritain’s recovery from the Covid-19 pandemic is being put at risk by the escalating price pressures and blow to business confidence caused by Russia’s invasion of Ukraine, the latest snapshot of the economy has shown.The flash estimate of activity from S&P Global and the Chartered Institute of Procurement and Supply (Cips) found the UK’s service sector growing rapidly but optimism about the future at its weakest in almost 18 months. Continue reading...

Resolution Foundation says it will be first large increase in number of people pushed into poverty outside of a recessionRishi Sunak’s spring statement will push 1.3 million people – including half a million children – below the poverty line next year while raising tax to the highest level since the second world war, according to leading economists.The chancellor’s spring statement on Wednesday offered some tax cuts, such as 5p-a-litre off fuel duty and a £3,000 increase in the threshold for national insurance contributions, but came in for widespread criticism for failing to support poorer families and other vulnerable groups from the soaring cost of living. Continue reading...

Chancellor responds to highest inflation in three decades with lower fuel duty and vow to cut income tax

Faced with runaway food and energy bills, people in work and retirement see little relief in chancellor’s tweaks to NI and fuel duty

Under all likely scenarios, millions of people will still face energy bills that are unaffordable

How Rishi Sunak’s changes on national insurance, fuel duty and income tax affect consumers

Find out how chancellor Rishi Sunak’s tax and spending plans will affect your personal financesThe chancellor delivered his spring statement just over a week before households are set to see energy prices go up by more than 50%, and on the same day official figures showed inflation running at 6.2% in February.Rishi Sunak was under pressure to address the cost of living crisis, and announced several measures he said would help struggling families. These included a 5p cut in fuel duty and an increase in how much people can earn before they start making national insurance contributions. Continue reading...

This live blog has now closed, you can read more coverage of the 2022 spring statement here

Hodge Hill has the highest fuel poverty rate in England, and many were looking to the chancellor for a lifelineIn the nine years she has volunteered at the Ward End Elim church food bank in Birmingham’s Hodge Hill, Pat Woolridge has never known so many people to be struggling.The constituency in the east of Birmingham has the highest fuel poverty rate in England at 27.4%, much higher than the national average of 13.4%, so many were hoping for a lifeline in Rishi Sunak’s spring budget announcement on Wednesday. Continue reading...

Chancellor offers only modest relief to households facing a £20bn hit to disposable incomes

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Pact ends months of tensions but talks on full free-trade agreement remain far offThe UK has struck a deal with the US to remove tariffs on British steel exports, although trade experts warned a broader trade deal between the two countries remains far off.The agreement was struck after UK’s international trade minister, Anne-Marie Trevelyan, met her counterpart, the US commerce secretary, Gina Raimondo, on Tuesday evening in Washington. Continue reading...

Conditions unlikely to return to pre-Covid levels until at least 2024 despite Sunak’s intervention, warns Office for Budget Responsibility

In spring statement, chancellor raises threshold at which workers pay national insurance by £3,000

Rishi Sunak has delivered his mini-budget – here are the main points, with political analysis

Analysis: the country suffered its worst recession in a century and inflation made an unwelcome return

February figure from ONS is higher than 5.9% predicted by economists, underlining cost of living squeeze

CBI calls on Rishi Sunak to use spring statement to help firms facing high energy bills and other pressuresRecord numbers of UK manufacturers are raising prices as the war in Ukraine gives an added twist to inflation, the latest snapshot of industry has shown.Adding to fears that Britain is set for a prolonged period of cost-of-living pressures, the employers’ lobby group, the CBI, said 82% of firms were expecting to raise prices in the coming months against just 2% predicting a fall. Continue reading...

Exclusive: Britons struggled even before winter rise in energy prices and benefits cut, research showsThe number of UK households struggling with large debts increased by a third in 2021, even before the winter rise in energy prices and the removal of the £20 uplift in universal credit payments, research suggests.Analysis of Bank of England research carried out by the Jubilee Debt Campaign found that in September 2021 almost 10% of households reported that loan and interest repayments were a heavy financial burden, a 35% increase on the previous year’s figures. Continue reading...

Figures improve chances of fuel duty or other tax cuts but inflation drives up cost of government debtRishi Sunak has been handed a boost from figures showing lower government borrowing than official estimates on the eve of the spring statement.The figures come despite a sharp rise in debt interest payments last month amid soaring inflation. Continue reading...

Reluctant to make big fiscal changes, chancellor Rishi Sunak considers tax adjustments and fuel duty cutThe Treasury has drawn up a range of options to help with the cost of living crisis – including a 1p cut to income tax, raising the national insurance threshold and a significant cut to fuel duty.But government sources said Rishi Sunak, the chancellor, was still reluctant to make big fiscal changes. Continue reading...

The government must swiftly implement the Crouch review recommendations and introduce an independent regulator for footballFrom the future of the global economy to energy security and defence spending, the shock of Vladimir Putin’s war in Ukraine is provoking a dizzying rethink of policy priorities and assumptions. The Roman Abramovich-related crisis at Chelsea FC might seem a minor subplot when tectonic plates of such magnitude are shifting. But football’s global reach and modern geopolitical dimensions make it much more than that. The perfectly timed spectacle of last week’s fixture between sanctioned Chelsea and Newcastle United – owned by Riyadh’s sovereign wealth fund – marked a moral nadir for the game, coming one day after Saudi Arabia executed 81 people. It was also shaming for this country. In football, too, a paradigm shift is needed.The tools to effect this – or at least start the job now – are within the government’s grasp. Last April, six leading clubs attempted to join the reviled European Super League project; the horror of their own supporters demonstrated an underlying outrage among fans at the direction the sport has taken. The government set up the fan-led Crouch review on football governance. (As the review panel deliberated on where the game had lost its way, the Premier League waved through the takeover of Newcastle by the fund, chaired by the crown prince, Mohammed bin Salman.) Continue reading...

The chancellor says he sympathises with people struggling to make ends meet. He needs to convert that into actionThe Bank of England’s message to Rishi Sunak was simple. Russia’s invasion of Ukraine is the latest unwelcome shock to the UK economy. It will make people poorer. There is nothing we, the Bank, can do about it. So, over to you, Chancellor.Threadneedle Street is absolutely right. It doesn’t have the tools to respond to rising global commodity prices but the Treasury does. Sunak has all sorts of ways of alleviating the pain: cutting taxes, increasing benefits, reducing excise duties, helping out with energy bills. Continue reading...

Rachel Reeves says millions will suffer if Rishi Sunak does not take drastic action in Wednesday’s spring statementRachel Reeves sees the clearest, tell-tale signs of poverty among schoolchildren in her Leeds West constituency. “You look at the kids and you just think, I know you are poor.“You can see it in the school coats, especially in the winter, and in the school shoes. Kids not wearing the proper school uniform, sort of a bit of mix-and-match, and it is really sad.” Continue reading...

The chancellor made his reputation with his response to the pandemic. Misjudging the cost of living crisis will break it

Inflation is heading to 8% and earnings are rising too slowly – but the chancellor will be hard pushed to help out in his spring statementPoor old Rishi Sunak. Covid hit within weeks of him becoming chancellor. He thought he would now be in a position to start implementing the sorts of long-term policies aimed at stimulating growth and enterprise that he set out in his recent Mais lecture. Instead, he has to deal with a whole new crisis.Inflation is heading to 8% and, according to the Bank of England, possibly considerably well beyond that. Combine that with earnings rising less quickly than prices, a big tax hike coming in next month, and benefits going up by only 3.1%, and you have the ingredients for the biggest year-on-year fall in household incomes in a generation. Even after the £9bn package that Sunak announced in February, people on average incomes could well be more than £800 worse-off next year than this. Continue reading...

As memories are revived of the second world war and the 1970s, it is time for a major rethink of economic strategyThe Australian comedian Bill Kerr used to begin his BBC appearances with: “I don’t want to worry you, but …” Funny how those words came back to me last week as I watched the television coverage of the criminal bombing of homes in Ukraine.Some of us are old enough to remember Hitler’s bombing of London, Coventry and elsewhere, not forgetting Britain’s bombing of Dresden. Kurt Vonnegut’s book about it, Slaughterhouse-Five, is a disturbing classic. Continue reading...

Chancellor Rishi Sunak is under pressure to use his spring statement to announce more support as the cost-of-living crisis grows• Six measures Sunak could takeBad news used to arrive in a brown envelope. Now emails and PDFs keep Devon Scott up at night as soaring energy costs and other utilities force the single father of two from Birmingham to cut back.“Everything is going up. The gas bill, phone bill, internet. You think, ‘Wow. I’m not getting enough money to keep paying for these’, so you limit yourself on the other things you’re spending on,” says the 43-year-old. Continue reading...

The chancellor is facing growing demands to tackle the effects of inflation and the effects of the Ukraine invasion

The Ukraine war is sending the cost of energy and food soaring across the world. Price controls may be the only way to stop a devastating chain reactionThe war in Ukraine has gone global. Spiking commodity prices are on track to see their sharpest rises since 1970, sending a shock wave of suffering across the world as the prices of essential goods every human needs to survive are surging upwards. Wheat prices are up 60% since February. Food prices are now higher than during the global food crisis of 2008, which pushed 155 million people into extreme poverty. Cheap Ukrainian wheat that vulnerable nations including Egypt, Libya, Somalia, Syria, and Lebanon rely on lies stranded. If we aren’t careful, the “Ukraine shock” could fast be approaching the awesome scale of the OPEC and Iran shocks that rocked the 1970s.But the “shock” metaphor is deceptive. This is not a momentary blast; all the warning signs point to the fact that this could turn into an avalanche. If that happens, we are just at the beginning of a decade-long deluge. Continue reading...

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Energy watchdog says measures could help cut oil usage by 2.7m barrels a day within four monthsDriving more slowly, turning down the air-conditioning, car free Sundays and working from home should be adopted as emergency measures to reduce the global demand for oil, according to a 10-point plan from the International Energy Agency (IEA).Such measures and changes to consumer behaviour would allow the world to cut its oil usage by 2.7m barrels per day (bpd) within four months – equivalent to more than half of Russia’s exports – the global energy watchdog said.Reduce speed limits on highways by at least 10 km/h

Owner DP World should be able to handle £100m crisis in minor subsidiary without resorting to extreme tactics“We believe that businesses can only be successful if they prioritise their biggest competitive advantage – their people.” So said DP World in its annual report for 2021, demonstrating once again that companies will spout any old rubbish in pursuit of a socially responsible halo.The Dubai-owned company, via its P&O Ferries subsidiary, showed on Thursday what its “duty of care” to members of its “corporate family” really means. It sacked 800 UK employees with immediate effect via pre-recorded video message. Employment lawyers wondered whether the action was legal but, even if it is, it’s a shocking way to behave. Continue reading...