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Finance

UK’s debt and welfare payments bill set to soar by more than £50bn

The winner of the Conservative party leadership contest will face huge additional costs of servicing the nation’s debt and paying social security benefits as a result of rising inflation and interest rates, according to Financial Times calculations. The estimates, which are an update to the Bank of England’s previous official inflation forecast in March, show […]

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Finance

UK economy contracts as households cut spending

The UK economy contracted in the second quarter, with households cutting spending as the cost of living crisis began to bite and health sector output falling as Covid cases and testing declined. Gross domestic product, the measure of the quantity of goods and services produced, fell 0.1 per cent in the second quarter of the […]

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Finance

How do leadership rivals Liz Truss and Rishi Sunak differ on UK economic policy?

A clash over tax and economic policy has dominated the early tussles between former chancellor Rishi Sunak and foreign secretary Liz Truss in their bids to become Conservative leader and the next UK prime minister. As the second phase of the leadership contest got under way this week, with two candidates facing a vote by […]

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Finance

BoE governor says half-point interest rate rise ‘on table’

Bank of England governor Andrew Bailey has raised the possibility of increasing interest rates by half a percentage point in early August as he toughened further the central bank’s language on battling rising prices. Bailey said the central bank’s Monetary Policy Committee had an “absolute priority” to bring inflation back down to its 2 per […]

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Finance

BoE official defends policy record after attacks from Tory leadership

A Bank of England official has hit back at criticism from Conservative party leadership candidates, defending the central bank’s record on inflation and quantitative easing. Michael Saunders, an external member of the Monetary Policy Committee who will step down next month, said on Monday that proposals for large tax cuts were unlikely to increase UK […]

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Finance

OECD wants key part of global tax deal signed off by mid-2023

The OECD has set a hard deadline of the middle of 2023 for an agreement on a crucial aspect of its global tax deal, in an effort to keep up the pressure on lawmakers to enshrine the proposals in law. The proposals, which nations signed up to in the autumn of 2021, include a pillar […]

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Finance

BoE under pressure as UK companies plan for extended period of inflation

Two-thirds of business leaders expect rapid UK price rises to persist longer than the Bank of England hopes, with most not expecting inflation to peak until spring of next year. The views from a June survey of the Institute of Directors’ (IoD) membership suggest that companies are planning to raise their prices in moves that […]

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Finance

UK public finances on ‘unsustainable path’, says OBR

The Office for Budget Responsibility has undermined the hopes of would-be tax-cutting Conservative leadership candidates by saying that the UK’s public finances are “on an unsustainable path in the long term”. In a long-planned report, the government’s independent fiscal watchdog said on Thursday that geopolitical tensions and the energy crisis highlighted emerging risks to the […]

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Finance

UK trade performance falls to worst level on record in first quarter

The UK’s trade performance this year fell to its worst level since records began, heaping more pressure on sterling in international currency markets. The country’s current account deficit was calculated at 8.3 per cent of gross domestic product in the first quarter of 2022, a deterioration from an average of 2.6 per cent across all […]

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Finance

Record number of Britons to pay higher income tax rates after thresholds frozen

Chancellor Rishi Sunak’s decision to freeze all UK income tax thresholds for four years has led to a record number of people paying higher rates this financial year. Figures from HM Revenue & Customs show that in 2022-23, 6.1mn people will pay either the 40 per cent higher rate, charged on incomes over £50,270, or […]