Consumer body says one in three lone parents forced to miss meals or visit food banks to make ends meetClose to a third of single parents have resorted to skipping meals to make ends meet because of rising food costs, according to research revealing the household types worst hit by the cost of living crisis.Three in 10 single parent households surveyed said they had missed meals as a consequence of runaway food prices. That compared with one in seven parents in couples and an overall figure of 14% in the poll by the consumer group Which? Continue reading...
by Presented by John Harris, produced by Frankie Tobi on (#665NP)
The Guardian’s John Harris is in the West Midlands to talk to teachers, librarians and the local council about how more than a decade’s worth of real terms cuts is taking its toll on services Continue reading...
New Zealand’s reserve bank delivered its largest rate hike in history on Wednesday, piling pressure on the country’s homeownersRosie Smyth and Richard Larsen, along with their toddler daughter, had spent years looking for an affordable home in Lyttelton, a small port town at the edge of Christchurch where Smyth grew up.They were hunting in the midst of New Zealand’s housing affordability crisis, when prices rose to nearly nine times the average income. The market had a frenetic quality – every month seemed to bring a new rise, and with it the feeling, Smyth says, that if you didn’t get in now, prices could permanently dance out of reach. Continue reading...
by Richard Partington Economics correspondent on (#6655R)
Departure of more than 500,000 workers since Covid risks stoking inflation, says Huw PillThe surge in people quitting the British workforce because of ill health or early retirement could force the Bank of England to further increase interest rates, its chief economist has warned.Huw Pill said the departure of more than half a million workers from the jobs market since the Covid pandemic risked stoking inflationary pressures, long after the shock from sky-high energy prices is likely to fade. Continue reading...
UN gains mandate for talks next year that could bring reforms to existing tax policy and new conventionDeveloping nations could have a greater say over global tax rules after winning a diplomatic tussle at the United Nations in New York on Wednesday.A new resolution, agreed by UN members, gives the body a mandate to kickstart intergovernmental talks on tax. Continue reading...
We speak to four working people who are struggling to keep pace with their billsWith households braced for the biggest fall in living standards since records began, as food prices continue to soar and many struggle to pay their energy direct debits this winter, four people share why they are taking on a second job. Continue reading...
New Zealand’s reserve bank says spending levels still need to be reduced with rate rises, in order to tame inflationNew Zealand’s reserve bank has forecast that the country will tip into recession in 2023, and has lifted the official cash rate by an unprecedented 75 basis points, to 4.25%.The cash rate hike, announced on Wednesday, is the largest in the central bank’s history, and comes as it attempts to rein in New Zealand’s 7.2% inflation rate. Continue reading...
Former Tory cabinet minister and arch Eurosceptic claims his rights to privacy infringed by inquiry into lobbying. This live blog is now closedOwen Paterson taking UK to human rights court after lobbying scandalStarmer says Britain is trapped in a “vicious cycle of stagnation”.The UK has had the worst record for growth in centuries, he says. He says a new model is needed. And this should be a turning point.They put our public finances in a perilous position, wasted the chance to transform our potential in an era of low interest rates, and created an economy with weak foundations.But the war didn’t ban onshore wind. The war didn’t scrap home insulation. And the war didn’t stall British nuclear energy. Continue reading...
Fixed interest rate deals starting to drop and could ‘fall further still’, says MoneyfactsThe average rate on a five-year mortgage deal has dropped below 6% for the first time since the disastrous mini-budget two months ago that ended up costing Kwasi Kwarteng his job as chancellor.Moneyfacts, a financial data provider, said that the average five-year fixed mortgage rate had dropped below 6% for the first time in seven weeks. The reduction is good news for would-be borrowers but rates could “fall further still”, it suggested. Continue reading...
Most countries’ forecasts cut as Ukraine war prompts ‘largest energy crisis since the 1970s’The UK will be the second weakest performer of the world’s big economies next year as the global economy continues to suffer the knock-on effects of the biggest energy shock in four decades, a leading international institution has warned.The Paris-based Organisation for Economic Co-operation and Development said only Russia of the members of the G20 group of leading developed and developing nations would suffer a bigger contraction than Britain in 2023. Continue reading...
Losses on government bonds and higher debt interest caused by rising inflation add to October figureGovernment help with energy bills and the impact of a slowing economy helped push UK public borrowing last month to the fourth highest level for an October on record, official figures have shown.The Office for National Statistics said the gap between the state’s spending and its revenues widened by £4.4bn to £13.5bn last month as payments began under the energy support scheme. Continue reading...
Controversial briefings to the press by senior government figures reflect a change in the zeitgeistThe short, disastrous premiership of Liz Truss is beginning to look like the endpoint of a political trajectory that began with the Brexit referendum in 2016. The spectacular detonation of Kwasi Kwarteng’s mini-budget by unimpressed markets was the moment when ideology met reality, and the Conservative party’s sovereigntist delusions were finally tested to destruction. In its aftermath, the high tide of Brexit has gone out, and a slow voyage back to economic sanity at last appears to be under way.On Monday, Ms Truss’s successor, Rishi Sunak, was obliged to spend much of his visit to the CBI conference in Birmingham denying suggestions that the government was hoping to pivot to a closer Swiss-style relationship with the European Union. Switzerland enjoys significant and profitable access to the single market, and participates in EU research and education programmes, while making payments to the EU and aligning with its law. According to a Sunday Times report, government figures have privately discussed the possibility of just such a relationship for Britain. “Let me be unequivocal about this,” Mr Sunak countered robustly. “Under my leadership, the United Kingdom will not pursue any relationship with Europe that relies on alignment with EU laws … I voted for Brexit. I believe in Brexit and I know that Brexit can deliver.” Continue reading...
£4.6bn is an eye-watering amount for consumers to stump up – transparency from the government is long overdueThe most startling number in the Office for Budget Responsibility’s economic outlook last week – aside from the gloomy big-picture forecasts – was found in a one-sentence footnote on page nine. “The total cost of the Bulb Energy bailout has reached £6.5bn, with £4.6bn of that in 2022-23 included in the autumn statement,” it stated baldly.Let those figures sink in. Since March, when the OBR forecast that nationalisation of the bust energy supplier would cost £2.2bn, the figure has increased by the equivalent of almost £3,000 for each of Bulb’s 1.5m customers. As one energy trader puts it, even under the April-to-September price cap of £1,971 and even with high wholesale prices, it ought it be almost impossible for Bulb to clock up losses of that size during the low seasonal period for consumption. Continue reading...
Shadow secretary for climate change and net zero accuses global leaders of ‘fiddling while the world burns’. This live blog has closedRishi Sunak is speaking now.He says when he became PM, he said he would put stability and confidence at the heart of the government’s agenda. Continue reading...
Readers on whether Jeremy Hunt’s budget will help to revive the UK’s public services and tackle economic problemsSeeing a Tory government increase taxes on nearly everyone is incredible (Biggest hit to living standards on record as Hunt lays out autumn statement, 17 November). At last the Tories realise that, to have a civilised society, we need well-funded public institutions providing the services needed to make it work for all.Or do they? In your standfirst online you write: “Austerity is pushed back until after the next election amid evidence of higher energy bills and a protracted recession”, which indicates that the Tories hope this is a temporary measure. This is despite the fact that we now know why we are in such a deep mess: the last decade of severe funding cuts to all public bodies is clearly the fault of previous Tory government policies. Continue reading...
In the shadow of the Truss debacle and with hard times ahead, the chancellor faced a ‘politically impossible’ job, according to a former Tory minister. But the party’s morale is at rock bottomBack when it all began on 22 June 2010, the then Conservative chancellor of the exchequer, George Osborne, delivered what he described as “this unavoidable budget”.A package of savage spending cuts and painful tax rises lay at its heart. “Today we have paid the debts of a failed past,” Osborne said. “And laid the foundations for a more prosperous future.” The message was that the Tory-led coalition was riding to the rescue to put right the wrongs of 13 years of Labour government, and, after a short sharp shock of austerity, soon all would be a bed of economic roses. Continue reading...
The UK’s money troubles spread from inflation and higher interest rates to sluggish productivity. But how do we compare with our European neighbours?Dire, grim, dismal: all words used to describe the UK’s economic situation after Thursday’s autumn statement.In recent decades, the UK’s GDP growth averaged somewhere between the higher rate of the US and the lower rate in the eurozone. That’s starting to change, Carsten Brzeski, global head of macroeconomics for ING Research, told the Observer. “It took Brexit for the UK to converge with the eurozone economy,” he said. “The outlook is very similar to what we’re seeing in continental Europe.” Continue reading...
The chancellor’s plan leaves non-doms in clover and the rest of the country in recession• You can order your own copy of this cartoon Continue reading...
A tired Tory party has resorted to yet more deregulation, after the 40-year failure of its first attemptThursday’s budget proved to be a red letter day for the City of London. In the moments after Jeremy Hunt delivered his perfumed message to the Square Mile, shares in all the big players, from HSBC to Legal & General, climbed back to where they had been before September’s disastrous mini-budget.Bankers, fearing the worst for their bonuses in the days before the fifth financial statement of the year, could look forward to filling their savings accounts once again. Like energy bosses, the chiefs who guard the financial district feared a windfall tax and worse – the retention, post-Brexit, of EU regulations that prevent the insurance and fund management industry from indulging in reckless behaviour. Continue reading...
The Burns family is still recovering from Covid’s financial fallout but now higher bills and rising taxes are hurting too“We want it to get better, we want some light,” says Alison Burns. Her family is feeling the financial pain caused by Covid and now the cost of living crisis. “But while the government keeps throwing everything at us, I can’t see any light at the end of the tunnel. How is any of this going to be made better?”Burns, who lives with her husband, Steven, and two children, Lewis and Alice, in Borehamwood, Hertfordshire, says money is tight. “Like a lot of people our finances haven’t recovered from Covid and all these budgets have hurt each and every way,” she says. “It is people who are working and on the breadline that are suffering the most.” Continue reading...
No one likes having to pay more, but hard times and Jeremy Hunt’s autumn statement have put the issue at the centre of politicsElections hinge on the people in the middle. The same goes for Jeremy Hunt’s autumn economic statement this week. In the space between the statement’s modest increases in personal taxes on the richest on the one hand, and its increased support for the poorest on the other, Thursday’s package was marked by a major revenue-raising squeeze on the living standards of the many millions in the middle. This represents one of the biggest political gambles by any government in modern times, the more so because this is the same government that helped create the very problem it is now struggling to solve.This large group of taxpayers and voters has gone by many aliases down the years – among them Middle Britain, the squeezed middle and the just-about-managing. Not everyone who falls into any of these categories thinks of themselves in the same ways, and there are certainly many large contrasts of wealth and living standards among them. In personal finance terms, they stretch all the way from anyone who will now miss out on the more targeted cost of living support for their heating costs from April, through to those whose incomes will be dragged into higher tax bands in the coming years as a result of the freezes on allowances.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here.
Paul Johnson, director of the Institute for Fiscal Studies, said the British people had 'just got a whole lot poorer', during a livestream in which his thinktank shared its analysis on the autumn statement and broader economic climate. Explaining the scope of the burden this would place on the public, Johnson said we have entered a new high tax, large state era. 'I would be most surprised if the tax burden gets back down to its longterm pre-Covid average at any time in the next several decades,' he said
Drop of 2.4% in three months to October is worst quarterly performance since March 2021Retail sales in Great Britain slumped in the three months to October as the pressure of inflation hitting a 41-year high and soaring energy prices forced households to cut budgets and rein in spending.The Office for National Statistics (ONS) said retail sales fell by 2.4% in the quarter compared with the previous three months, with volumes in September and October falling below pre-pandemic levels for the first time. Continue reading...
There will be no recovery unless the chancellor addresses low productivity, the green economy and trading relations post BrexitJeremy Hunt won’t enjoy today’s papers. “Tories soak the strivers,” agonises the Mail, the condemnation bolstered by a columnist’s lament: “And there was me thinking we’d voted in the Conservatives”. “From bad to worse,” says the Guardian. “Hunt paves the way for years of pain,” says the Financial Times. “Carnage,” predicts the Mirror. “Years of tax pain,” warns the Times.But then his autumn statement was never going to be easy or please everybody. It had to meet multiple objectives, some of which are contradictory in the short term; it was positioned to pursue a total fiscal effort that is greater than what I believe is strictly necessary, and it had to reconcile economic and financial realities with political and institutional priorities. Continue reading...
Freezing of thresholds means those receiving a wage rise will pay more tax, while benefits increase by the rate of inflationThe chancellor, Jeremy Hunt, has pressed the button on a new wave of austerity in an autumn statement that will bring to an end eight years of improved living standards.Hunt left the three main tax rates unchanged – 20p basic, 40p higher and 45p additional rate – with the first £12,750 of income tax-free and the 40% rate starting at £50,270. However, he did lower the threshold at which Britons start paying the 45p top rate of income tax to £125,140 – a measure that will pull 250,000 people into the top rate. Continue reading...
The Office for Budget Responsibility, the UK's spending watchdog, says that living standards will fall by 7%, wiping out eight years' worth of growth as the country falls into a recession. The OBR's chief, Richard Hughes, says that government schemes to cap household energy bills will not stop the drop in living standards, and that the huge increase in energy prices leaves the UK 'poorer'
by Harry Taylor (now); Andrew Sparrow and Graeme Wear on (#65XTW)
Chancellor denies postponing financial pain as fiscal watchdog’s figures show eight years of income growth wiped out. This blog is now closedIn the Commons Rishi Sunak is making a statement about the G20 summit. These statements are normally routine, and just summarise what was said or decided at the meeting. They don’t normally include fresh announcements.Sunak started by talking about the missile incident in Poland. He said Russia attacked Ukraine with missiles on the day that he “confronted the Russian foreign minister across the G20 summit table”. He said the blame for the missile landing in Poland lay with Russia. Ukraine could not be blamed for defending itself, he said.During the bombardment of Ukraine on Tuesday an explosion took place in eastern Poland. The investigation into this incident is ongoing and it has our full support.As we’ve heard the Polish and American presidents say, it is possible the explosion was caused by Ukrainian munition which was deployed in self-defence.In just a few moments the chancellor will build on these international foundations when he sets out the autumn statement, putting our economy back on to a positive trajectory and restoring our fiscal sustainability. Continue reading...
Austerity is pushed back until after the next election amid evidence of higher energy bills and a protracted recessionBritain faces the biggest hit to living standards on record as Jeremy Hunt set out £30bn of delayed spending cuts and £25bn of backdated tax increases in an autumn statement that laid bare the country’s dire economic predicament.Underlining the fragility of the economy, the chancellor pushed back the fresh austerity measures until after the next election amid evidence that higher energy bills and the worst inflation in four decades will cause a protracted recession, a jump in unemployment of 500,000 and a lost decade for living standards. Continue reading...
by Presented by John Harris, with Pippa Crerar and Ra on (#65YDN)
The chancellor, Jeremy Hunt, has given details in his autumn statement of how the government will try to help struggling households, businesses and public services. But after 12 years in power and with the UK now in recession, can the Conservatives convince people they are the right party to turn the economy around? John Harris is joined by the Guardian’s political editor, Pippa Crerar, and the columnist Rafael Behr to look at what the statement tells us about where we’re headed Continue reading...
Margaret Morris and Lee Cornish respond to an article by Aditya Chakrabortty on the consequences of Conservative dogmaAditya Chakrabortty is right in locating the origin of Britain’s economic problems in the early 1920s (Discipline the poor, protect the rich – it’s the same old Tories, same old class war, 10 November). Before the first world war, the trade unions had benefited from cooperation between the newly created Labour party and the Liberal party, but Lloyd George’s decision to stay as prime minister at the end of the war using the “coupon election” left him in the power of a Tory majority in the Commons.When the miners, faced with drastic wage cuts, appealed to him for help, he set up a royal commission. The Sankey report supported the miners and the nationalisation of the mines for the benefit of the national economy. However, the Tory majority refused to implement the report and slashed wages. Continue reading...
In a statement to MPs, the chancellor outlined his fiscal plans, which he said would tackle the cost of living crisis, address inflation and rebuild the UK economy. Hunt said the economy was already in recession and announced a range of measures, including an increase in the energy windfall tax to 35% and lowering the threshold for the 45% top rate of income tax from £150,000 to £125,140
With the right global economic policies, we could fight poverty and global heating at the same timeFor the best part of three centuries, there has been a consensus about the goal of economic policy. Since the dawn of the industrial age in the 18th century, the aim has been to achieve as rapid growth as possible.It’s not hard to see why there has been this focus. Growth has raised living standards, increased life expectancy, improved medical care and resulted in better educated, better fed populations. Continue reading...
by Richard Partington Economics correspondent on (#65XQ5)
Plans are afoot to cut government borrowing with the economy on the brink of recession and the highest inflation for decadesJeremy Hunt will announce plans to cut government borrowing in Thursday’s autumn statement with the economy on the brink of recession and inflation at the highest rate in four decades.Reshaping the Treasury’s tax and spending plans after Liz Truss’ disastrous mini-budget, the chancellor is expected to announce tax rises and real-terms spending cuts in an attempt to narrow a shortfall in revenue for the exchequer. Here are the five key charts that will underpin Hunt’s statement. Continue reading...
by Richard Partington Economics correspondent on (#65X6A)
Andrew Bailey also said disastrous mini-budget had damaged Britain’s international reputationBritain is suffering worse economic performance than its rivals because of Brexit and a stark drop in the size of the workforce since the Covid pandemic, the governor of the Bank of England has said.Andrew Bailey said a combination of headwinds had prevented the economy from recovering to pre-pandemic levels, while warning it would also take time for the government to repair damage to Britain’s international reputation caused by the disastrous mini-budget under the former prime minister Liz Truss. Continue reading...
Andrew Bailey says UK must tread carefully after recent turmoil as he faces Treasury committee, on day inflation accelerates to a 41-year high of 11.1%, hurting poor the mostOctober’s surge in prices means workers are suffering a deeper real wage squeeze.We learned yesterday that average earnings (exclusing bonuses) rose by 5.7% in the year to September, the fastest growth since 2000 – but well behind inflation.“Rising gas and electricity prices drove headline inflation to its highest level for over 40 years, despite the Energy Price Guarantee.“Over the past year, gas prices have climbed nearly 130% while electricity has risen by around 66%. Continue reading...