Displaying items by tag: finance

The Bank of England has raised interest rates to 1.75%, the biggest rise in 25 years, as it predicts an even higher peak in inflation of 13%. It fears inflationary pressures are becoming ‘more persistent and broadening’. Many companies have been successfully raising prices which will push up consumer costs in the shops. The latest rise in gas prices has led to another significant deterioration in the financial outlook as the UK is now projected to enter recession. The bank has forecast that the UK economy will start shrinking in the fourth quarter of this year, and then keep contracting through next year. That would be the longest recession since after the 2008 financial crisis. The bank also points to the UK’s ‘tight’ labour market - a signal that it is worried about a wage-price spiral, as workers seek pay rises to help with the worst cost of living crisis in decades.

Sanctioned Russian oligarchs from Putin's inner circle have exploited a UK secrecy loophole left open by the Government. They use a type of company which does not need to identify its real owners known as an English Limited Partnerships (ELP). ELPs are also linked to fraud, terrorism and money laundering. Since 2017 over 4,500 have been set up to dodge anti-money laundering laws which require the real owners to be disclosed. Pray for the UK Economic Crime Programme, police and government to make ELPs illegal. Meanwhile Shell Plc has given employees a ‘Special Recognition Award’, equivalent to 8% of their annual salary, after recording profits for a second consecutive quarter thanks to soaring oil and gas prices and legally strong refining margins. The one-time payment will be made to most of Shell’s 82,000 employees. Shell said the award was not a response to the rising cost of living. See

Sats results show year 6 standards in reading, writing and maths have slipped in England since the pandemic. 59% of pupils met the expected level. The government says the Sats results were as expected due to the pandemic and there is ‘more work to do’ to help pupils catch up. By 2030 it wants 90% of children leaving primary school to have the expected standards in reading, writing and maths. Unions said further investment in schools and teaching staff was needed to achieve that target. The government said it values the work teachers up and down the country are putting into education recovery. £5bn has been allocated to help pupils catch up and children struggling in English and maths will ‘receive the right evidence-based targeted support to get them back on track’. The education unions and former advisor Sir Kevan Collins said the recovery fund falls short of what was required - around £15bn.

The UK could be heading for a recession. The economy contracted by 0.1% in March, and higher prices are ‘really beginning to bite’, the Office for National Statistics said. People are spending less in shops and cutting down on car journeys; the impact of higher energy bills in April has also yet to be seen. Many price rises are just starting to hit households now. Last week the Bank of England forecast that inflation could reach more than 10% by the end of the year. It warned the UK faces a ‘sharp economic slowdown’. The chancellor has threatened to hit energy companies with a one-off ‘windfall’ tax if they don't invest enough in new projects. Opposition parties want to tax the soaring profits of oil and gas firms to help families grappling with rising bills. Treasury officials have been ordered to examine a potential tax, and Boris Johnson said the Government would have to look at the windfall proposal if not enough investment was made.

Rishi Sunak delivered his mini-Budget against a backdrop of rising fuel, energy and food costs. He cut fuel duty by 5p but resisted calls to scrap April's National Insurance rise of 1.25p in the pound; instead the start threshold will rise from £9,600 to £12,570. He warned the UK's post-pandemic recovery has been blown off course by the war in Ukraine, but he promised an income tax cut in 2024 when the economy would be in better shape. The Office for Budget Responsibility painted a bleak picture of the immediate prospects, saying that living standards are set to take the biggest hit since records began in the 1950s. It said inflation was set to peak at 8.7% at the end of this year and this - combined with rising taxes - will ‘weigh heavily on living standards in the coming twelve months’. The UK's tax burden will be the highest level since the 1940s.

Christians Against Poverty (CAP) is a Christian debt help charity which is calling on the Government to 'act now' and increase support for those on low incomes with everything at its disposal. They saw calls to their debt helpline rise by 47% this January compared to last year, and requests for emergency fuel vouchers have doubled. CAP said, ‘We, along with many other charities and think-tanks, say that the upgrading of Social Security (the amount benefits and pensions go up in April) needs to be more than planned. Also they could pause deductions to Universal Credit as they did at the beginning of the pandemic. The third thing needed is a cost of living review; the level of social security has not matched the actual cost of living, even for the barest of essentials, for many, many years.’

The former Archbishop of Canterbury, Dr Rowan Williams, and 200+ church leaders sent an open letter to Boris Johnson and Rishi Sunak. They said a stronger commitment to renewable energy would help address the climate emergency and help people to weather the cost of living crisis. Letter signatories include fifty Anglican and Catholic bishops, including the lead environment bishops. Their call for financial and fiscal support for renewable energy and energy efficiency - solar and wind energy - was met in the spring statement, but retrofitting of homes and other buildings across the UK to reduce heating bills and decrease carbon emissions was not. They also proposed a windfall tax on fossil fuel companies to address the cost of living and no support for new oil and gas developments if we are to limit global heating to 1.5°C.

On 17 March Interest rates rose again for the third time in four months to counter higher prices and calm the rise in the cost of living. It means interest rates are now at their highest level since March 2020, when the Covid pandemic began. Energy bills and food costs are increasing and there is concern the war in Ukraine will push prices up further. Inflation, the rate at which prices rise, is currently 5.5%, well above the Bank of England's 2% target. The Bank expects inflation to reach 8%, possibly higher, in coming months, and cited rising prices and strong employment as the reasons for the latest rise. About two million households will see an immediate increase of about £26 a month to a typical tracker mortgage, and £16 to a typical standard variable rate mortgage.

With inflation rising, young people are feeling the pinch more than ever. In a national poll conducted at the beginning of 2022, which involved more than 11,000 people, London came out bottom - with just 37% of Londoners saying they felt their rent was affordable. There is also a gender gap, with 1/3 of women in London spending over 50% of their salary on rent, compared with 1/4 of men. See The Resolution Foundation said the dramatic increase in global oil and gas prices was forecast to push UK inflation above 8% this spring, causing average incomes across Britain to fall by 4% in the coming financial year. That is worth £1,000 per household, the biggest annual decline since 1975. It warned chancellor Rishi Sunak that urgent steps were required to help the poorest families in Britain with soaring living costs, adding that weak wage growth and high inflation would drive more children into poverty.

There are several individuals being sanctioned by other nations but not by the UK. Oleg Deripaska was sanctioned by America for money laundering, ordering the murder of a business rival, illegally wiretapping government officials, extortion, racketeering and bribing government officials. He owns 45% of an aluminium company listed on the London Stock Exchange, and former Conservative energy minister Lord Barker is its executive chairman. The Russian state-owned VTB bank was suspended from the Stock Exchange but Andrey Kostin, president of the bank, is not sanctioned. Victor Zolotov, also on the EU's list but not UK's, leads Russia's national guard. His family is one of the richest in Russia in the real estate sector, with property portfolios in the UK. Pro-Kremlin billionaire Alisher Usmanov founded Russian-based USM which owns major iron, steel and copper suppliers and a telecommunications company, and has commercial ties to Everton Football Club (which has suspended its sponsorship contracts with USM).