IFS and Resolution Foundation say Jeremy Hunt’s policies will shock middle England, with higher taxes here to stay

The government has made “no decision” on whether to increase the rate of fuel duty on petrol, Jeremy Hunt insists as he defends autumn statement

A teacher, a civil servant and an NHS nurse say spending is not enough to tackle costs and avoid strikes

UK has scored ‘a series of economic own goals’, Institute for Fiscal Studies says after autumn statement

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'

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...

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...

Shadow chancellor attacks ‘crisis made in Downing Street’ but there are few signs of anger on Tory benches

SNP accuses chancellor of reintroducing austerity, while Welsh government warns of ‘gap’ in funding despite £1.2bn uplift

Spending watchdog says Britain is in recession and unemployment will rise by 500,000

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

Labour describes autumn statement measures as ‘invoice for the economic carnage’ of disastrous mini-budget under Liz Truss

Jeremy Hunt is announcing his financial update – here are the main points, with political analysis

Investors and economists warns that markets want to see growth plans as well as fiscal responsibility

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...

In today’s newsletter: The new chancellor is primed to announce a package of cuts and tax rises to confront inflation – here’s what you need to know

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...

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...

It’s more than 40 years since UK inflation was so high. Voters will not forget, nor will they likely forgive, come the next electionIn no way can Jeremy Hunt’s autumn financial statement on Thursday be treated as a budget like any other. The economic stakes for the country and the political stakes for the Conservative government after the Liz Truss debacle are simply too high and too serious for that. Today, though, the stakes ratcheted up a notch, when the UK inflation rate rose unexpectedly steeply in the year to October to reach 11.1%.This is a big moment, resonant with grimmer 20th-century times. It comes in part as the latest in a series of severe economic shocks, following Brexit, Covid and the energy crisis, that appear to be driving Britain into a longer and deeper recession than its neighbours, and which are not yet over. But the inflation spike is also an event of which millions of voters, with mortgages, overdrafts and needs that they cannot cover, have no recent experience.Martin Kettle is a Guardian columnist Continue reading...

This live blog has now closed, you can find our latest political coverage hereHere is the broadcaster Piers Morgan’s take on the Rishi Sunak press conference.Q: How is the UK going to work with other countries to implement the proposals in the G20 communique? Continue reading...

Rishi Sunak vows to prioritise fight against the rising cost of living

The siren call of climate-burning expansion bewitches British politics. More of the same will emerge in the autumn statementIf things had been different, Rishi Sunak might have topped off his trip this week to the G20 summit in Bali with a quick dash back to Sharm el-Sheikh for the final hours of Cop27. But gone, sadly, are the days when getting a climate deal over the line was top priority for world leaders. Now they prefer to show up for the opening ceremony and then leave. It’s safer to grace the platform when there’s only hot air and the moral high ground at stake. And besides, Sunak has a diary clash tomorrow. He and Jeremy Hunt don’t have time to save the planet. They have to try to save the Tory party.Like a couple of cleaners wading around in the aftermath of a bloodbath, the prime minister and his chancellor have been warning everyone for weeks how messy things are going to be in their autumn statement. Cut spending. Raise taxes. Raid pensions. Everyone is going to have to make sacrifices. Nothing is off the table. Nothing, that is, except identifying (and punishing) the architects of the chaos.Tim Jackson is professor of sustainable development at the University of Surrey and director of the Centre for the Understanding of Sustainable Prosperity Continue reading...

Highest rate for 41 years leaves chancellor Jeremy Hunt with difficult budget choices

Policymakers are wrong to think rising joblessness and a recession are a price worth payingSharply raising central bank interest rates might prove catastrophic, rather than just inappropriate, as a solution to the current inflationary environment. That was the message lurking in the speech of one of the Bank of England’s monetary policymakers, Silvana Tenreyro, last week. It’s hard to disagree. While inflation is hurting the poor disproportionately because of their low incomes, rate hikes are a “cure” that is worse than the disease.The Bank regards growing unemployment as a necessary trade-off to prevent the acceleration of inflation. Its central projection for rising interest rates suggests almost 2.5 million people would be jobless in 2025 – with the worst-case scenarios seeing 3 million out of work. This would lead to widespread misery. Nobody wants to be jobless. Karl Marx’s reserve army of the unemployed is full of conscripts, not volunteers. Many are already deserting its ranks, preferring to leave the labour force entirely rather than be jobless. Continue reading...

The cuts will still be terrible, but not as terrible as they could have been. Rejoice! Celebrate St Jeremy, the patron saint of expectation managementFirst, roll the pitch. For the last few weeks Jeremy Hunt has been going out of his way to explain just how screwed the economy really is. That he is going to have to do some desperately unpleasant things to stabilise the situation. Things so unpleasant he doesn’t really want to mention them. But he’s such a decent guy – “fall into my eyes and surrender to my embrace” – that he’s going to tell us anyway. Because we deserve to know the truth.It’s not us. It’s not even him. It’s just life. The war. Things are just too, too bloody. Bloody bloody. So he’s going to ask us all to make sacrifices. Some may even have to make the ultimate sacrifice. Not all of us are going to get through this. The elderly may die of starvation in their unheated homes. Continue reading...

Parliamentary commissioner for standards hints Gavin Williamson is being investigated after claim he gave cheque to MP with financial problems. This live blog is now closedRishi Sunak has also said he hopes to have a meeting with the Chinese president, Xi Jinping, at the G20 summit. Asked if he would have a bilateral with Xi, Sunak told Sky News:I’m hopeful that I can. As I said, I think it’s important that we engage with people to try and tackle some of these shared challenges. And I’m here to talk to people, and that’s what I hope is possible.I’m very clear that China poses a systemic challenge to both our values and our interests, and it represents the single biggest straight threat to our economic security. And that’s why it’s right that we take the steps that are necessary to protect ourselves against that.I think our approach to China is one that is very similar to our allies, whether that’s America, Australia and Canada, all countries that I’m talking about exactly this issue with while we’re here at the G20 summit.And I think it’s an indisputable fact of the global economy that China is a big part of it. And if we want to solve big global challenges like public health, like Russia and Ukraine, fixing the global economy or indeed climate change, it’s important to have a dialogue and to engage with China as part of solving those challenges. Continue reading...

October’s producer price index figures fuel hopes that US inflation is easing, as company insolvencies in England and Wales jumpMinister for Employment, Guy Opperman MP, says:“The UK labour market has remained resilient in the face of global challenges, with a low unemployment rate and a record number of people on payrolls.“Whilst these figures are encouraging, we recognise that families are facing rising prices and employers need support to fill vacancies with a reliable workforce. Our focus is on making sure people looking for work, and those already in work, have the opportunity to boost their skills and keep more of what they earn – helped by our extensive network of Jobcentres.In real terms, total pay fell by 2.6% and regular pay fell by 2.7%. This remains one of the largest falls in pay since 2001.Although there was growth in average pay this growth is totally eclipsed by the inflation we are experiencing, meaning that people’s pay packets simply will not stretch so far. Continue reading...

Communique unlikely to stretch beyond usual platitudes despite the need for a global plan for recoveryThe Cambodian prime minister, Hun Sen, was struck down by Covid, the Argentinian prime minister, Alberto Fernández, had gastroenteritis and the Russian foreign minister, Sergei Lavrov, either did or did not have chest pains that sent him to hospital. Given that Indonesia’s G20 slogan plastered all around Bali says: “Recover Together, Recover Stronger”, it was not an auspicious performance by the world’s leaders.Unfortunately, there is precious little sign of recovery at the G20, either at a political or economic level. Continue reading...

Prime minister also urges City to curtail bonuses and says he is keen to reduce reliance on food banks

Companies hit by increasing energy prices, higher inflation, labour shortages and interest rate risesThe number of companies collapsing into insolvency in England and Wales has jumped by nearly 40% in a year, as soaring energy prices, high inflation and rising interest rates take their toll.There were 1,948 company insolvencies in England and Wales last month, the Insolvency Service reported, up 16% from September’s total of 1,684. Continue reading...

Workforce has shrunk amid rising long-term sickness and it appears unemployment is growing again

Wage growth continues to lag behind rising inflation as unemployment rate rises slightly

The chancellor insists Britain has to ‘live within its means’ – but many economists say painful cuts are neither inevitable nor proven to workJeremy Hunt is preparing to wield the axe over public spending this week and raise taxes for everybody in an autumn statement that will be long on pain and short on good news. After Liz Truss’s short and catastrophic premiership, the “abacus economics” she despised is back in the ascendancy under Rishi Sunak.The message from the government is that Britain has to live within its means, which Hunt and Sunak say requires action to reduce government borrowing and ensure that the national debt starts to fall as a share of national income. Continue reading...

As Rishi Sunak and Joe Biden meet world leaders at the G20, they should be pushing for greater cooperation to deal with growing threats

A steady stream of bad economic news has filtered into Britain’s property market, prompting fears that prices could tumble. But how worried should people be? Rupert Jones reportsEver since Margaret Thatcher’s ‘right to buy’ revolution in the 1980s, the UK housing market has been an obsession for millions of people. For many, buying a home has been like a lottery win, with properties rising in value year after year, often by far more than the average wage. It has spawned an industry of lifestyle programmes pushing people to get on to the property ladder and revamp their homes.Recently, however, things have started to go sour. Prices in October fell by 0.9% month on month, according to the mortgage lender Nationwide, in the market’s first decline in 15 months. One of the reasons was a slowdown in demand for properties as a result of spiralling borrowing costs, with a spate of interest rate rises leading to soaring monthly payments. Continue reading...

Tax Justice Network says countries lose $89bn a year by allowing anonymity over use of tax havensGovernments around the world could reap almost $90bn a year extra in tax if they made public their data on the extent to which multinational companies use tax havens, an advocacy group reports.The Tax Justice Network said states were depriving themselves of $89bn (£75bn) a year by allowing some of the world’s biggest companies anonymity over the way they conduct their tax affairs. Continue reading...

Jeremy Hunt has chance to make a big difference for small businesses in his autumn statementThe buildup to Jeremy Hunt’s autumn statement on Thursday has inevitably been dominated by the big stuff: tax rises for individuals and companies; departmental spending cuts; and what, if anything, will constitute a plan for growth now that Liz Truss’s brief flirtation with deregulation and investment zones has been abandoned. But there is a smaller measure that should be getting more attention: business rates.The CBI, the business lobby group, called action on that front its “main and modest fiscal ask” and was right to do so, because next spring’s “cliff edge”, in the usual lingo, will look daunting from the point of view of many small businesses on high streets. Continue reading...

Former US vice-president says bank should refocus its spending and end its role in ‘fossil fuel colonialism’Fundamental reform of the World Bank could be completed within a year, to refocus its spending on the climate crisis and end its contribution to “fossil fuel colonialism”, according to the former US vice-president Al Gore.“I don’t know why it need take longer than a year,” said Gore, a longtime campaigner on the climate crisis since leaving politics, in an interview with the Guardian at the Cop27 UN climate summit. “We have an emergency on our hands.” Continue reading...

Bank of England interest rate rises mean higher costs for borrowers but better returns for saversThe average easy-access savings rate has improved to its best level in more than a decade, according to Moneyfacts.Savers can now typically receive 1.16% in annual interest on an easy-access account on the market, the website said. Continue reading...

Former Bank of England policymaker says Brexit has caused permanent damage to the UK economyElsewhere in UK retail, Frasers Group is reportedly in late-stage talks to seal a deal for Savile Row tailor Gieves & Hawkes. Sky News has reported that Mike Ashley’s empire is close to sealing the purchase of the 251-year-old Savile Row business after its Hong Kong-based owner fell into administrationBased at 1 Savile Row, the brand has been part of Trinity Group - which is in turn owned by the collapsed Shandong Ruyi Technology Group - since 2012.“While the potential job losses are regrettable, it seems that Joules has taken the precautionary steps needed to limit further fallout in terms of further job losses and an erosion in their brand equity.“Given the surprising acquisitions and strategic partnerships that have been made in the retail space recently, there should be at least some optimism that another industry player will come to the rescue of a brand that still holds resonance with consumers. Continue reading...

Former Bank of England policymaker Michael Saunders says leaving EU has ‘permanently damaged’ economyBrexit is the ultimate reason why the UK now faces a fresh round of austerity, a former interest rate-setter at the Bank of England has said.“The UK economy as a whole has been permanently damaged by Brexit,” Michael Saunders, who was an external member of the central bank’s monetary policy committee, said in an interview with Bloomberg TV. Continue reading...

Many investors believe taking money from the rich and giving it to the poor would be ‘fine’ with the bond marketAs the charts climbed higher on their data terminals, bond market investors watching the shift felt increasingly sick.The impact of that fateful day in September when Trussonomics was launched on an unsuspecting public with the mini-budget was huge, and it got worse second-by-second, as the panic spread. It is a day that will remain etched in the memories of many for years to come. Continue reading...

Lobby group says failure to tackle workforce shortages would be highly damaging for the economyBritain’s foremost business lobby group has urged Jeremy Hunt to use this week’s autumn statement to shake up immigration rules to support companies struggling with chronic staff shortages and a looming recession.The head of the Confederation of British Industry (CBI) said urgent action was required from the chancellor on Thursday to bolster the economy, including “tough political choices” to allow more overseas workers in Britain as employers struggle with a desperate lack of staff. Continue reading...

Hike in mortgage costs after mini-budget cuts 20% off buyer demand in OctoberFirst-time buyers pulled back most from purchasing a home after the increase in mortgage costs following the mini-budget, according to a report showing a widespread slowdown in the property market.Figures from the property platform Rightmove show buyer demand fell 20% in October compared with a year ago, as house-hunters put their property searches on hold in response to soaring borrowing costs and rising economic uncertainty. Continue reading...