Tag: economy

Pushed on rising mobile, broadband, and car insurance costs, Sunak acknowledged there were still “challenges”, but argued the UK was “in a far better place”…reports Asian Lite News

This year will “prove to be the year that the economy bounces back”, Rishi Sunak told after figures showed inflation fell to its lowest level in almost two and half years. “We have turned a corner after the shocks of the past few years,” he said. Figures earlier showed inflation dropped to 3.4% last month as price rises for food and eating out slowed.

But despite price rises slowing overall, housing and fuel prices continued to rise rapidly. The prime minister said things had started to look up.

“I do believe that at the start of this year we have turned a corner after the shocks of the past few years and we are in a new economic moment,” he added.

Asked if he saw green shoots of recovery for the country, Sunak said businesses and people were “seeing that things have turned.” During the prime minister’s premiership to date, households have continued to feel the pain of rising prices and higher borrowing costs, especially for mortgages, as the Bank hiked interest rates to try to slow down rapid price rises.

Inflation remains higher than the Bank of England’s 2% target and at the end of last year the UK slipped into economic recession. One of Sunak’s main pledges was to grow the economy.

Sunak acknowledged things still felt tough for people, but insisted fortunes for the UK economy were changing after being damaged by the Covid pandemic and energy and food price surges from the war in Ukraine in recent years.

Pushed on rising mobile, broadband, and car insurance costs, Sunak acknowledged there were still “challenges”, but argued the UK was “in a far better place than we were when I became prime minister because of our plan”.

He acknowledged “things still feel tough for lots of people”, but added “my job is to make sure that we’re helping, and that’s what our tax cuts do”.

Separately, the prime minister said he was “not interested in Westminster gossip” over plots to oust him. “What’s important is the future of our country and people’s financial security and the peace of mind that they rightly deserve and my job and what I am working every day to deliver is that peace of mind that there is a brighter future ahead,” he added.

The health of the UK economy is at the top of the political agenda, with the general election set to be called in the coming months and both major parties pledging to boost growth.

Labour’s shadow chancellor Rachel Reeves has vowed Labour will seek to bring about a “new chapter in Britain’s economic history”, telling the BBC on Tuesday that economic growth was “essential to do everything else that a Labour government would want to do”.

Earlier this month, Chancellor Jeremy Hunt set out the government’s tax and spending plans in his Budget, including a cut to National Insurance and an expansion of child benefit.

UK rent prices up 9%

The average cost of rent in the UK rose by 9% in the 12 months to February this year – the highest annual increase since records began in 2015.

There were price rises in all parts of the country, according to the Office for National Statistics (ONS). In England, London renters saw costs go up the most at 10.6%, taking average monthly rent in the capital to £2,035.

A government spokesperson said its Renters (Reform) Bill would give tenants and landlords a “fairer deal”. Average monthly rent increases across the UK ranged from 8.8% in England through to 10.9% in Scotland and 9% in Wales.

This meant tenants in each country paid an extra £104, £93 or £60 a month respectively.

Northern Ireland’s data lags behind the rest of the UK, with figures currently available up to the end of last year. The ONS reported a 9.3% increase in the country for the year to December 2023.

London – which saw the biggest increase overall – had the UK’s highest rent even before the latest inflation figures were published on Wednesday.

In England and outside of the capital, Bristol was the most expensive place to rent privately – costing £1,734 a month.

Meanwhile, average UK house prices fell by 0.6% in the year to January, though it marked a slower drop than the 2.2% annual fall recorded a month earlier.

There were price rises in all parts of the country, according to the Office for National Statistics (ONS). In England, London renters saw costs go up the most at 10.6%, taking average monthly rent in the capital to £2,035.

A government spokesperson said its Renters (Reform) Bill would give tenants and landlords a “fairer deal”. Average monthly rent increases across the UK ranged from 8.8% in England through to 10.9% in Scotland and 9% in Wales.

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Britain needs to be put on an economic “war footing” if it is to break out of a vicious cycle of low growth, the former prime minister Gordon Brown will say on Monday.

In a speech to the Institute for Government thinktank, he will call for the creation of a National Economic Council, jointly chaired by the prime minister and chancellor with a mission to deliver annual growth of 3%.

The former prime minister will say the Treasury must be fully committed to a growth strategy and not be allowed to retreat into a “comfort zone” in which it concentrates on balancing the books and reducing the national debt.

Jeremy Hunt, the chancellor, said in his budget last week that the economy would soon turn the corner after the damage caused by the pandemic and the cost of living crisis.

But the Office for Budget Responsibility, the government’s spending watchdog, said the outlook for the economy “remained challenging” and Brown, prime minister during the 2008 global financial crisis, will say that the way Britain is governed needs to change if there is to be an end to 15 years of stagnation.

He will say: “The way we govern will have to be radically transformed – and government put on a war footing – if Britain is to break free from the vicious low growth, low productivity, and low wage cycle that has seen annual growth halve in the last decade, investment levels stagnate at levels far below our main competitors, the worst productivity performance – less than 0.5% a year – since the Industrial Revolution, and the deepest regional economic inequalities in western Europe.”

Labour’s last prime minister will propose his new National Economic Council should be jointly staffed by the Treasury and the Cabinet Office, working alongside a council of the nations and regions, and have the task of hitting a 3% growth target. Brown will say the economic council should have equal status with the government’s national security council, meeting at least once a week, and twice a week if necessary.

Brown will argue that higher growth can be achieved through an industrial strategy founded on green, digital and medical technologies, linked to an employment and anti-poverty strategy focused on better jobs, skills, and services.

Brown will say the lesson he learned in his time as chancellor and prime minister is that the Treasury needs to be at the centre of a growth strategy rather than seeing its powers hived off to a new economic department.

“A myriad of improvisations have been tried and failed to turbocharge British economic growth, from the ill-fated Department of Economic Affairs of the 1960s, the National Enterprise Board of the 1970s, and Mrs Thatcher’s anointing of Sir Alan Walters in opposition to Chancellor Nigel Lawson in the 1980s,” he will say.

“But for a growth strategy to work, the Treasury has to be at the centre of a coordinated framework of economic policymaking and implementation led by it and No 10 and which involves all relevant economic departments.”

Rachel Reeves, the shadow chancellor, has said achieving higher growth will be at the heart of a future Labour government’s economic strategy and has insisted this has to be built on sound public finances.

Brown will say that for his plan to work, the Treasury “has to avoid the temptation to retreat into its comfort zone”, namely as “a finance department with an almost exclusive focus on debt and deficit reduction – neglecting its wider responsibilities for delivering growth”.

Brown helped to orchestrate the rescue of the UK’s stricken banks in 2008 but the deep recession that accompanied the global financial crisis resulted in him losing the 2010 general election.

In his speech on Monday, he will argue that the subsequent shift to austerity under the Conservative-Liberal Democrat coalition helped explain the UK’s weak economic performance while the US instead focused on a focus to growth.

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