DOOM NEWS / SEARCH
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The UK’s total government debt has reached £3tn for the first time. September’s budget deficit rose to £24.5bn while inflation climbed to 3.5%, increasing pressure on the government before next week’s budget.
UK inflation has risen to 3.5% and national debt has exceeded £3tn for the first time before the chancellor’s Budget statement. Borrowing is also running above forecasts as spending and interest costs increase.
UK annual inflation rose to 3.5% in September from 3.1% in August, exceeding the 3.4% forecast. Higher motor fuel prices were the main driver as the war involving the US, Israel and Iran disrupted fuel flows through the Strait of Hormuz.
UK annual inflation rose to 3.5% in September as petrol and diesel prices surged. Government borrowing reached £24.5bn for the month, leaving borrowing £6bn above the forecast for the financial year so far.
UK-listed companies issued 65 profit warnings in the three months to September, the highest quarterly total in two years. EY-Parthenon said policy change, geopolitical uncertainty and rising costs were key factors as the war in the Middle East added pressure on businesses.
Chancellor John Healey said UK banks are central to the country’s economy but declined to disclose whether they will face higher taxes. He said decisions would be set out in the budget in two weeks.
Robert Hall and Michael Woodford have won the Nobel Prize in Economics for developing the microeconomic foundations of macroeconomic stabilisation. The prize is worth 12 million Swedish kronor, or about £900,000.
NS&I has raised rates on its British savings bonds, with two- and five-year products now paying more than 5%. Experts warn that providers may withdraw attractive deals once they have attracted enough deposits.
The UK will chair the G20 next year, giving Andy Burnham a major international responsibility. The proposed priorities include AI regulation, food and climate security, and debt restructuring for poorer economies.
Andy Burnham plans to pass legislation changing the state pension triple lock before the next election. Government estimates put potential savings at £15bn a year by the late 2030s, while the Resolution Foundation says the figure is highly uncertain.
The average UK diesel price has reached £2 a litre for the first time, while eurozone inflation rose to 3.8%, its highest level in three years. G7 countries agreed to release up to 100 million barrels of oil and diesel from strategic reserves.
Bank of England deputy governor Clare Lombardelli said interest rates would probably need to rise if elevated energy prices kept inflationary pressures persistent. She said the size and duration of the energy shock remained materially uncertain.
The Bank of England kept its main interest rate at 3.75% for a sixth consecutive meeting but warned it could raise rates if energy prices remain high. It now expects inflation to be slightly above 4% at the start of next year.
UK inflation rose from 2.9% in July to 3.1% in August, driven mainly by higher fuel costs. Prime Minister Andy Burnham said the 28 October budget will involve “difficult decisions” as the government considers the fiscal impact of the Middle East conflict.