Fewer online purchases and less high street footfall reported in early trading but retailers remain hopeful as monthly payday loomsShoppers took to their laptops and flocked to high streets on Black Friday in what is expected to be one of the busiest retail days of 2023 - but early indications are that this will be a more muted affair compared with previous years.Sales in cash terms are expected to be on a par with 2022, but prices are higher due to a year of rampant inflation, meaning fewer items will actually be sold over the US-inspired discount period. By lunchtime on Friday, some retailers had seen a slight uplift, but online activity was flat and footfall down more than 5% at shopping destinations. Continue reading...
The extent of Tory spending cuts could prove unpalatable for voters - and leave a Labour government with a huge holeOne of the most striking pieces of recent polling showed nearly 80% of Britons think public services have deteriorated in the last decade. This would seem an electoral gift to Labour. But as this week's autumn statement shows, the long shadow of austerity is hugely problematic for both parties.Jeremy Hunt's de facto budget was, even by the usual standards of such events, something of a smoke-and-mirrors affair, boasting of big tax cuts while contributing to a fiscal mix in which the average household will be worse off. Continue reading...
Net migration to the UK in 2023 is estimated at 672,000, and the PM says a more sustainable' level is needed. This live blog is closedWhen Nigel Farage was leading the Brexit party, it was considerably influential for a party with no MPs, winning the European elections in 2019 and helping to push the Conservative party into a harder position on Brexit. After the 2019 election it was renamed Reform UK, Richard Tice took over as leader and it became much more marginal. But in an interview on the Today programme this morning Tice claimed that the government's failure to bring down immigration was presenting it with an opportunity. He told the programme:The British people voted to control immigration, and the government have betrayed the people's promises. And that's why so many thousands of people, former Tory members, are joining us. Our polling numbers - we got record polling last week, four different polls where we're in double figures. This week, we've had Tory donors joining us. Frankly, I fully expect Tory MPs who are furious and angry with the government to be calling me next week.[Cleverly] has made the point that he says that it was not aimed at a particular place. Knowing James well, he's not the sort of person, in my opinion, who would have made that kind of remark in that kind of context.But he has accepted that this was certainly unparliamentary language and he has rightly apologised. Continue reading...
Former home secretary says pressure on housing, the NHS, schools, wages, and community cohesion, is unsustainable. This live blog is closedThe Covid inquiry has announced its timetable for hearings next week. Matt Hancock, the former health secretary, who has been repeatedly accused by witnesses to the inquiry of giving false assurances to colleagues, is due to give evidence for a day and a half, starting on Thursday. And Michael Gove, who as Cabinet Office minister at the time was one of the lead ministers dealing with Covid, is due to give evidence for most of Tuesday.Sajid Javid, another former health secretary, and Dominic Raab, foreign secretary and first secretary of state during most of the Covid crisis, and stand-in PM when Boris Johnson was ill, are due to appear on Wednesday. Continue reading...
Debt is not coming down. We haven't beaten inflation. Taxes aren't falling. But Jezza sails through interviews, believing it allSometimes it's hard to know just how to react. Whether to laugh or cry. Or just to wander off and quietly inject yourself with large quantities of morphine. Much like most Tory MPs seem to have been doing for the past year or so.Should you just sit back and applaud? In open admiration of the sheer cheek. The illusion that had been pulled off in plain sight of the entire nation. Somehow that doesn't seem quite right with Jeremy Hunt's autumn statement. Because actually the magic has been a bit rubbish. A bit like watching someone claim to levitate when they are actually propping themselves up with a stick. Continue reading...
by Jedidajah Otte, Sarah Marsh and Zoe Wood on (#6GKFE)
A taxpayer, a pensioner, a benefit recipient and a parent explain how the chancellor's changes affect them - if they do at allThe chancellor, Jeremy Hunt, delivered his autumn statement on Wednesday and in it announced increases in benefits and a cut in national insurance. We asked a taxpayer, a pensioner, a universal credit claimant and a parent for their views. Continue reading...
by Presented by John Harris, with Pippa Crerar and Da on (#6GK4H)
Jeremy Hunt's much anticipated autumn statement promised tax cuts and getting people back to work. John Harris is joined by the Guardian's political editor, Pippa Crerar, and the former Treasury minister David Gauke, to assess what we heard
Big firms hail permanent full expensing' - but some question whether it can help smaller companiesBritish manufacturers have welcomed Jeremy Hunt's announcement of permanent tax breaks for investment as the government tries to spur lagging UK productivity after years in the doldrums in its autumn statement.The chancellor said the tax break, worth 11bn a year by 2028-29, was the largest business tax cut in modern British history" as he made permanent full expensing" one of the key growth-boosting measures in Wednesday's autumn statement. Continue reading...
Rising interest rates have boosted profitability but are likely to limit demand and increase risk of bad debts, says central bankThe balance sheets of eurozone banks are showing early signs of stress" after a rise in loan defaults and late payments by customers, the European Central Bank has warned.Higher interest rates have boosted banks' income and profits for the time being, the ECB said, but lenders are facing pressures from higher funding costs, worsening asset quality and lower lending volumes. Continue reading...
We show how people are pulled into paying more without the government increasing the tax rateSuccessive Conservative chancellors from Rishi Sunak to Jeremy Hunt have frozen income tax thresholds for the past four years.The policy results in what is known by economists as fiscal drag" - when tax thresholds do not keep up with the rising cost of living, pulling more people into higher tax brackets. Continue reading...
Rishi Sunak's small-state ideology misjudges the needs of the economy and the mood of the countryAnother week, another front opens in the Conservative party's multipronged campaign against facts. In Wednesday's autumn statement, Jeremy Hunt will chart the hard economic road ahead and claim it is the path to prosperity. He will celebrate stagnation by branding it stability. He will claim credit for falling inflation, which is largely beyond the government's control (as ministers were eager to explain when the rate was rising).The chancellor will cut taxes in the hope of synthesising a taste of good times before the next election, making it harder to balance the books after polling day. He will boast that this is responsible fiscal management. Policies drafted with an eye on the following morning's headlines will be advertised as a long-term plan. Continue reading...
From Whitehall to welfare and pay to pensions, here is what Jeremy Hunt is likely to announceThe chancellor, Jeremy Hunt, will set out the government's plans for tax and spending on Wednesday in his much-anticipated autumn statement. Meanwhile, the Office for Budget Responsibility (OBR) will publish updated economic forecasts and an assessment of the government's finances for the next five years - running well beyond the next election. Here is what to expect. Continue reading...
by Richard Partington Economics correspondent on (#6GJGY)
With inflation falling, the chancellor is expected to turn his attention to growing the economyThe chancellor, Jeremy Hunt, will give his autumn statement speech on Wednesday with the UK economy struggling for growth momentum after the sharpest rise in inflation for 41 years.After Rishi Sunak declared victory on his target to halve inflation this year, Hunt is expected to say he is turning his attention to growing the economy - with heightened speculation this could include tax cuts ahead of next year's general election. Here are five key charts that will underpin his statement. Continue reading...
Sales slump 4.1% in October amid highest mortgage rates in two decades and a dearth of housesUS existing home sales dropped to the lowest level in more than 13 years in October as the highest mortgage rates in two decades and a dearth of houses drove buyers from the market.Existing home sales tumbled 4.1% last month to a seasonally adjusted annual rate of 3.79m units, the lowest level since August 2010, the National Association of Realtors (NAR) said on Tuesday. Home resales are counted at the closing of a contract. Continue reading...
Andrew Bailey fears markets are downplaying risks of persistent inflation, as new figures show UK borrowing so far this year is 16.9bn less than expected
Air fryers, skiwear, hot tubs, kayaks - you never know what you'll find in the discount supermarkets. But you can be sure the keenly priced, limited-time-only products will lead to a scrumI am waiting outside an Aldi in south London at 6.45am. Through the window, I eye my prize. He glints at me from a basket placed tantalisingly close to the entrance. Kevin the Carrot, the limited-edition soft toy released by Aldi once a year, is part of the discount supermarket's Christmas promotion. Such is the demand for Aldi's Kevin drop that the toys routinely sell on eBay for triple the retail price. This year, Kevin is golden, his belly straining against the metallic fabric like a wrestler's bespandexed torso.I text Jayne McGibbon Peberdy, a 39-year-old law student and Kevin collector. She has been waiting outside her local Aldi in Greenock since 4.30am. She sends me a photo of a steaming vacuum flask. In 2019, Peberdy witnessed a stampede for Kevins. The following year, they had to get the police to the shop, because a grown man tried to steal a Kevin out of the hands of a four-year-old," she says. Continue reading...
The chancellor is estimated to have billions to play with and has a range of options from lowering income tax to cutting inheritance taxJeremy Hunt could have more money to play with in this week's autumn statement after a reassessment of the public finances from the independent Office for Budget Responsibility (OBR). One economic consultancy says a combination of higher growth and lower debt bills could hand the chancellor as much as 25bn in extra firepower, up from 6.5bn in the spring. We look at some of his options. Continue reading...
The election of the far-right candidate Javier Milei reflects the seriousness of the country's problems - and threatens to deepen themJavier Milei's landslide election victory, with 55.7% of the vote to his rival's 44.3%, is not only terrible news for Argentina but terrifying for many. In a country celebrating 40 years of hard-won democracy, the far-right economist threatens to turn the clock back.It would be easy to mock the former TV celebrity and tantric sex coach, who wielded a chainsaw at rallies and promised that he would take it to the state. But his election as president is no joke. Among the 53-year-old libertarian's ideas are a referendum to overturn the legalisation of abortion, reducing gun ownership restrictions, making the trade in organs lawful, slashing social spending and abolishing the central bank. He has called the Argentina-born Pope Francis the representative of the evil one on Earth", smeared the victims of the military dictatorship as terrorists" and claimed that their death toll was far smaller than the accepted 30,000 figure. Continue reading...
Around 500 employees of OpenAI have signed a letter saying they may quit and join Sam Altman at Microsoft, unless he is reappointed and the board resigns
President-elect's idea is a gamble that is likely to crash an economy paying the price for mistakes of his predecessorJavier Milei's bigger-than-expected victory in the Argentinan presidential election suggests voters in South America's second biggest country have willingly opted for shock treatment to sort out the country's deep economic malaise.It is perhaps not hard to see why 56% of the electorate backed the rightwing libertarian: Argentina may have the world's best football team but its economy has performed disastrously in recent years. Inflation is running at 140% and a three-year drought has led to a sharp fall in agricultural production. Two out of five people live in poverty and the currency has lost 90% of its value in four years. Continue reading...
Scheme used by designers including Paul Smith and Vivienne Westwood to launch brands at fashion showsThe UK trade secretary, Kemi Badenoch, has been accused of quietly killing off a funding stream for small businesses that had helped fashion brands such as Paul Smith and Vivienne Westwood launch their products at global trade fairs.Specific support has been provided by the government since 2006 to small and medium-sized companies wanting to showcase their products at overseas exhibitions, but after years of budget cuts the initiative has been shelved. Continue reading...
Some credit the Fed and Joe Biden for America's relatively painless escape from inflation. It's not a simple answerContrary to the predictions of many economists - and the enduring perception of many Americans - the US inflation rate has, so far, come down without a major decline in economic activity or employment. In fact, the economy has added an average of 204,000 jobs a month over the last three months, well above the labour force's long-term growth trajectory. As a result, unemployment remains under 4%, almost the lowest level since the late 1960s. Meanwhile, annualised GDP growth amounts to 2.3% so far this year, faster than the average rate since the turn of the century. Continue reading...
Chancellor seeks to promote growth ahead of autumn statement that could spark a rebellion among Tory backbenchers defending marginal seatsJeremy Hunt has played down the prospect of immediate income tax cuts, pledging not to do anything in this week's autumn statement that will fuel inflation.Although some Conservative backbenchers are eager for measures that would be quickly felt by households, the chancellor on Sunday sought to emphasise the need to promote growth and indicated that tax cuts were not going to happen overnight". Continue reading...
The Asia-Pacific Economic Cooperation summit in San Francisco is a reminder of the history of US-China relations, writes Hugo WongIt is symbolic that the Asia-Pacific Economic Cooperation (Apec) summit took place in San Francisco, a place of significance in the history of US-China relations and both nations' narratives (Planet Earth is big enough for two': Biden and Xi meet for first time in a year, 15 November). From 1848, San Francisco became the first Chinatown, the de facto capital of the Chinese in America. This was the time of the conquest of the west, when, just annexed from Mexico, California became a symbol of the American dream, helped by the gold rush and the transcontinental railroad, constructed with Chinese labour. That dream was once shared and built by white settlers and Chinese migrants together, until the Chinese Exclusion Act of 1882 would hinder dialogue between America and China for almost a century.Many Americans worried California would become a Chinese colony, the so-called yellow peril", while the Chinese were struggling at home with foreign imperialism. In 1907, Kang Youwei, a famous Chinese philosopher and reformer, exiled in America, wrote: There is no yellow peril. There is no white peril ... The great question that is presented to civilised nations today is not whether their unimportant differences will lead them to clash, but rather whether their inherent similarities and oneness will inspire them to unite in the great global work that needs to be done." Continue reading...
They write books, review papers and oversee research, and they oftentimes get things wrong - very wrongThey're Ivy-League educated, brilliant academic minds and experienced in the ways of markets, governments, data and statistics. Many have access to information not readily available to the general public. They attend meetings, forums and conferences with each other. They write books, review papers and oversee research. They are our nation's top economists. And they oftentimes get it wrong. Very wrong.Both the treasury secretary, Janet Yellen, and Fed chairman, Jerome Powell, were wrong about inflation, having first called rising prices transitory" after Covid disrupted the entire world's supply chain. Nobel winner Paul Krugman publicly admitted his mistakes. They were not alone. Continue reading...
Chancellor is upbeat but there is little chance of autumn statement changing voter perceptions of Tory planIf the opinion polls are right, Jeremy Hunt is on the political equivalent of death row. Voters have passed judgment on the government and it is only a matter of time before the sentence is carried out.That's not the way the chancellor sees it. For a condemned man, he was remarkably cheerful as he did the rounds of the TV studios in the run-up to Wednesday's autumn statement. His message was simple: things may look bleak for the government but all is not lost. There is too much negativity. The long-term prospects are fantastic". The chancellor is confident there will be an 11th-hour pardon from the British people. Continue reading...
Investment, investment, investment must be the chancellor's mantra. Instead, he is being urged to give away billions to those least in needIt is time to focus on growth", intoned the chancellor, Jeremy Hunt, on Friday. The economy, he seems to think, has turned a corner. Before Wednesday's autumn statement - the biggest set-piece economic event of the year - anticipation on Tory backbenches and in the rightwing media is beginning to run high, as estimates about his potential largesse balloon. A focus on growth in their eyes can have only one meaning: buying back popularity with tax cuts.It is breathtakingly wrong. Tax cuts, especially the widely mooted deep cuts to inheritance tax that Hunt is said to be considering, will do little for growth - instead choking off a much-needed source of revenue and inflating inequality. That they should be framed as crucial supports to aspiration, enterprise and growth is tribute to the huge rightwing bias in our national conversation, with the reasons for the prolonged stagnation facing us going largely unacknowledged. Britain is suffering from an intensifying four-decade-long investment drought in the public and private sectors - the root cause of the crisis in stagnating productivity and living standards that shapes our politics and daily lives. Every spare pound should be consecrated not to tax cuts but to raising public investment - a key trigger for increased private sector investment and, ultimately, a better future. Continue reading...
by Michael Savage, Toby Helm and Phillip Inman on (#6GFX8)
The chancellor's potential inheritance tax cut in Wednesday's budget would aid millionaires amid a cost of living crisisJeremy Hunt faces a backlash from red wall" Tory MPs if he uses a fiscal windfall of up to 20bn to deliver tax cuts for the rich rather than to help ordinary families with the cost of living, the Observer has been told.The chancellor and Rishi Sunak are this weekend finalising an autumn statement on Wednesday that could include a major reduction in inheritance tax - four-fifths of which would benefit those with more than 1m at their death, according to a new report from the Institute for Fiscal Studies (IFS). Each person with more than 1m would receive an average tax cut of 180,000, the IFS states. Continue reading...
The days of cheap credit that could have fuelled long-term investment have gone. Now chancellors must find a different source of revenueJeremy Hunt's autumn statement is fast approaching and it looks like the public will be treated to the exciting spectacle of a chancellor treading water.Hunt is in no mood to splash the cash when the financial markets still have a wary eye cast in his direction. Investors remember the panic that followed Liz Truss and Kwasi Kwarteng's first and only budget, when the UK's good name was sullied and, as a financial punishment, the cost of borrowing rocketed. Continue reading...
Bond yields fall as retail sales volumes across Great Britain fall to their lowest level since February 2021, amid cost of living squeeze and wet weather
Chancellor could try to win votes with a tax giveaway, but seems unlikely to improve the polls or the economyAn economy going nowhere. Limited financial firepower. Polls suggesting the Conservative party on course for a wipeout at the general election. Tory MPs clamouring for tax cuts. Jeremy Hunt is under real pressure to announce a gamechanging autumn statement on Wednesday. Rarely has a chancellor been so poorly positioned to do so.Hunt has been at the Treasury for just over a year but by the standards of the current parliament, that makes him a veteran. He is the fifth chancellor since 2019 and three of his predecessors - Sajid Javid, Nadhim Zahawi and Kwasi Kwarteng - were so short-lived in office that they failed to produce a single budget between them. Continue reading...
by Richard Partington Economics correspondent on (#6GEH2)
Before autumn statement, industry bosses say more consistency is needed after more than a decade of instabilityBritain's economy has lost billions of pounds in investment since 2010 amid government flip-flopping" on its industrial growth plans as it churned through 11 different economic strategies, according to a report.As the chancellor, Jeremy Hunt, prepares for his autumn statement next week, industry bosses warned ministers that more consistency was required to increase investment levels after more than a decade of instability. Continue reading...