Displaying items by tag: Economy

Inflation in the UK has surged to 3% in January, reaching a ten-month high, according to the Office for National Statistics (ONS). The rise was driven by higher plane fares, increased food costs, and a sharp jump in private school fees. Analysts had expected a smaller increase of 2.8%. An ONS official explained that airfare prices did not drop as usual after the holiday season, food prices rose, and private school fees jumped significantly due to recent tax changes. Rachel Reeves defended the Government's economic strategy, stating that wage growth is outpacing inflation, putting an extra £1,000 a year in people’s pockets on average. She highlighted her focus on economic growth, cutting regulations, and investing in infrastructure. However, shadow chancellor Mel Stride blamed the Government’s 'record tax hikes and excessive spending', arguing that this rise will cause higher prices, prolonged high interest rates, and financial struggles for families.

The Government has stated it will not immediately retaliate against the renewal of US steel and aluminium tariffs, instead opting for a measured approach. Trade minister Douglas Alexander emphasised the need for a 'cool and clear-headed' response rather than a knee-jerk reaction. The 25% tariffs, set to take effect from 12 March, are designed to reduce foreign imports and boost US steel production. While the UK only exports 10% of its steel to the US, certain specialist suppliers could face severe impacts; the tariffs could also lead to an influx of cheaper foreign steel into the UK, undercutting domestic manufacturers. In response, UK Steel and unions are urging the Government to increase domestic steel purchases and protect jobs. Other nations, including Canada and the EU, have condemned the tariffs and vowed retaliatory measures, while the UK remains committed to diplomatic engagement. Donald Trump, who imposed similar tariffs in 2018, has indicated no exemptions this time, except possibly for Australia.

Major lenders Santander and Barclays have introduced mortgage deals below 4%, signalling increased competition in the sector. These offers follow expectations that the Bank of England will continue to cut interest rates, allowing lenders to lower borrowing costs. Currently, the average two-year fixed mortgage rate is 5.48%, and the five-year average is 5.29%, but further declines are expected as lenders adjust to market trends. 800,000 fixed-rate mortgages under 3% are set to expire annually until 2027, meaning many homeowners will still face higher monthly payments. However, with the Bank of England expected to cut rates further, experts predict continued mortgage rate reductions, offering relief to borrowers. Financial experts are advising homeowners to review their options and switch to better deals where possible. The Bank of England reports that the UK economy grew slightly, by 0.1% in the last quarter of 2024. See

Rachel Reeves has unveiled major infrastructure projects, including support for a third runway at Heathrow Airport. Her speech highlighted Labour’s commitment to economic growth, despite opposition. She emphasised that growth 'will not come without a fight’. Key projects include developing a 'growth corridor' between Oxford and Cambridge, upgrading transport links, building nine new reservoirs, and redeveloping the Old Trafford football ground. However, the lack of public funding for these initiatives raises concerns about feasibility. Heathrow’s expansion is controversial, with critics arguing it will harm the environment and increase costs for airlines. London mayor Sadiq Khan and green energy entrepreneur Dale Vince oppose the plan, and the Conservatives and Liberal Democrats argue that the government’s approach is ineffective. Despite these challenges, Labour insists that investing in infrastructure is crucial for long-term prosperity and ensuring the UK is not left behind in global development. See

Lloyds Banking Group has announced the closure of 136 high street branches, dealing another blow to the UK banking sector, as more customers shift to mobile banking. After these closures, Lloyds will have 386 branches, Halifax 281, and Bank of Scotland 90. Lloyds attributes the decision to a 48% decline in branch transactions over the past five years; over twenty million customers now use their apps for banking. Affected employees will be offered alternative roles within the organisation. To support customers losing local branches, Lloyds are highlighting alternative banking options, including telephone banking and Post Office branches; also, 21 new banking hubs may be introduced in affected areas to maintain cash access. While digital banking continues to grow, concerns remain about the impact on elderly and vulnerable customers reliant on in-person services.

UK high street businesses face a dire challenge as business rates are set to increase by over 140% in April. The temporary 75% relief introduced during the pandemic will drop to 40%, causing substantial cost hikes for retailers, pubs, restaurants, and nightclubs; for example, the average pub’s annual rates will rise from £4,017 to £9,642. These rising costs come amid other pressures, including inflation, increased national insurance contributions, and higher minimum wages. Brick-and-mortar businesses already struggle to compete with online retailers, which pay reduced rates for warehouses. Critics warn that this 'final blow' could force many high street businesses to close. Reforms to business rates are planned but will not take effect until April 2026. Experts suggest reimagining high streets as community hubs rather than purely shopping destinations. Despite government assurances of relief measures, over 200,000 retail jobs and 17,000 stores are predicted to vanish in the coming year: see

The British pound has dropped to its lowest level in nine months, following a rise in UK ten-year borrowing costs to their highest point since 2008. These elevated costs could lead to tax increases or spending cuts as the UK government works to meet borrowing targets. The Government, awaiting forecasts from the Office for Budget Responsibility (OBR) in March, emphasised the importance of stable public finances for economic growth. Opposition figures criticised current borrowing strategies, with some calling for more fiscal discipline to build resilience. Globally, rising borrowing costs, partly influenced by uncertainty surrounding Donald Trump’s proposed tariffs, have contributed to inflation concerns and investor unease. Experts warn these trends could disrupt investment promises and necessitate recalibrated spending plans.

The UK inflation rate surged to 2.6% in November, its highest level in eight months, driven by rising fuel and clothing costs, as well as higher ticket prices for events. This marks the second consecutive month of rising inflation, dampening hopes for an interest rate cut by the Bank of England. Rachel Reeves acknowledged the ongoing struggles of working families, vowing to alleviate financial pressures. However, critics blamed recent government policies for exacerbating inflationary pressures, which could prolong elevated mortgage rates. Many companies are grappling with rising fuel, utility, and wage costs, while households continue to face increased expenses on food, rent, and essentials. Economists predict the Bank of England will keep interest rates steady at 4.75% to curb inflation. While inflation is expected to fluctuate in the coming months, experts forecast a return to the Bank’s 2% target by the end of next year.

In the Niger Delta, rampant oil theft continues to threaten local livelihoods and the national economy. Armed groups siphon crude oil from pipelines in the region, often operating with impunity and even security cover. These activities cause environmental devastation, health crises, and economic losses. In 2022, Nigeria lost $23 billion to oil theft, so that it lost its position as Africa's top oil exporter. The authorities are committed to fighting this problem by deploying gunboats, engaging vigilantes, and supporting the navy. Increased oil production, now averaging 1.8 million barrels per day, has been attributed to these efforts. However, poverty and unemployment continue to drive pipeline vandalism. Nigeria's inflation rate, worsened by a devalued naira, remains high, but there is official optimism that rising oil output will stabilise the economy.

Justin Trudeau’s government is facing turmoil following the abrupt resignation of his finance minister, Chrystia Freeland. This was sparked by disagreements with Trudeau on how to handle the threats made by Donald Trump, who has vowed to impose a levy of 25% on imported Canadian goods unless the shared border is made more secure. Freeland accused Trudeau of prioritising ‘costly political gimmicks’ over addressing the economic risks posed by Trump’s policies. Her departure blindsided the government, bringing Trudeau and his shaky minority Liberals to the brink - exacerbated by losing a by-election in British Columbia. There have been calls from opposition leaders but also members of his own party for Trudeau to resign, and his approval rate is now only 28%. With the next federal election due by October 2025, Canada's political landscape appears increasingly uncertain.