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The EU has offered to cut 80% of checks on some goods moving from Great Britain to Northern Ireland in an effort to avoid a post-Brexit trade clash.

It has drawn up plans designed to ease the flow of items across the Irish Sea, including chilled meats, to put an end to the so-called “sausage war”.

The plans have been published a day after the UK’s Brexit minister Lord Frost demanded a new Northern Ireland Protocol – which is designed to prevent a hard border on the island of Ireland.

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‘Be flexible, find compromises’ for NI protocol

Lord Frost’s opposite number in the European Commission, Maros Sefcovic, called the proposals “far-reaching” as he published four papers that officials will tonight take to London to begin negotiations immediately.

Under the plans, the transport of certain foods and items of animal origin will be vastly simplified.

Mr Sefcovic said in practical terms it would mean a lorry carrying a mixture of dairy, fish and confectionary would only require one certificate instead of multiple certificates for each item.

The number of physical checks on lorries will be drastically reduced and customs paperwork will be cut by 50%.

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The UK has argued the protocol is not working, with delays and interruptions to supplies moving between the UK and Northern Ireland.

But the EU is hoping what it has called a “dramatic simplification” of the rules will bring Westminster on side, allowing for “a type of express lane that will facilitate the movement of goods”.

The papers also include plans to ensure the free flow of medicines between Great Britain and the Northern Ireland by changing EU laws.

Mechanisms will be altered to ensure the participation of Northern Ireland politicians and communities in the ongoing implementation of the protocol.

The EU says the proposals are significant, going way beyond tinkering around the edges.

But the documents do not address the controversial issue of the European Court of Justice, which under the current agreement is the final arbiter in alleged breaches of the protocol.

Lord Frost has insisted that is not acceptable, despite the UK signing the agreement. The EU insists the issue is not negotiable.

Northern Ireland’s DUP, the country’s largest pro-British party, said the proposals are a starting point but fall “a long way short” of the fundamental change needed.

“We will take time to study the detail of the papers produced. However there is no escaping the reality that the
Northern Ireland Protocol has harmed Northern Ireland, both in economic and constitutional terms,” said party leader Jeffrey Donaldson.

Lord Frost and Mr Sefcovic are expected to meet in the next few days to discuss the plans which the EU says it hopes will lead to full implementation of the protocol.

However, the meeting will come just days after Lord Frost warned the UK could trigger Article 16, suspending parts of the agreement – and leading the two sides into dangerous territory.

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Trump announces yet more tariffs and praises ‘significant step’ from Apple

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Trump announces yet more tariffs and praises 'significant step' from Apple

Donald Trump has announced 100% tariffs on computer chips and semiconductors made outside the US.

The move threatens to increase the cost of electronics made outside the US, which covers everything from TVs and video game consoles to kitchen appliances and cars.

The announcement came as Apple chief executive Tim Cook said his company would invest an extra $100bn (£74.9bn) in US manufacturing.

Soon, all smartwatch and iPhone glass around the world will be made in Kentucky, according to Mr Cook, speaking from the Oval Office.

“This is a significant step toward the ultimate goal of ensuring that iPhones sold in the United States of America are also made in America,” said Mr Trump.

“Today’s announcement is one of the largest commitments in what has become among the greatest investment booms in our nation’s history.”

Mr Cook also presented the president with a one-of-a-kind trophy made by Apple in the US.

Trump seen through the trophy given to him by Tim Cook. Pic: AP
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Trump seen through the trophy given to him by Tim Cook. Pic: AP

Trump’s tariffs hit India hard

Mr Trump has previously criticised Mr Cook and Apple after the company attempted to avoid his tariffs by shifting iPhone production from China to India.

The president said he had a “little problem” with Apple and said he’d told Mr Cook: “I don’t want you building in India.”

India itself felt Mr Trump’s wrath on Wednesday, as he issued an executive order hitting the country with an additional 25% tariff for its continued purchasing of Russian oil.

Indian imports into the US will face a 50% tariff from 27 August as a result of the move, as the president seeks to increase the pressure on Russia to end the war in Ukraine.

Mr Trump told reporters at the White House he “could” also hit China with more tariffs.

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Apple’s ‘olive branch’

Apple, meanwhile, plans to hire 20,000 people in the US to support its extra manufacturing in the country, which will total $600bn (around £449bn) worth of investment over four years.

The “vast majority” of those jobs will be focused on a new end-to-end US silicon production line, research and development, software development, and artificial intelligence, according to the company.

Apple’s investment in the US caused the company’s stock price to hike by nearly 6% in Wednesday’s midday trading.

The rise may reflect relief by investors that Mr Cook “is extending an olive branch” to Mr Trump, said Nancy Tengler, chief executive of money manager Laffer Tengler Investments, which owns Apple stock.

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Primark-owner ABF gets Hovis deal oven-ready

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Primark-owner ABF gets Hovis deal oven-ready

The London-listed parent of Primark was on Wednesday applying the finishing touches to a landmark transaction that will unite the Hovis and Kingsmill bread brands under common ownership.

Sky News understands that a deal for Associated British Foods (ABF) to acquire Hovis from private equity firm Endless is likely to be announced by the end of the week.

The timetable remains subject to delay, banking sources cautioned on Wednesday.

The deal, which will see ABF paying about £75m to buy 135 year-old Hovis, is likely to trigger a lengthy review by competition regulators given that it will bring together the second- and third-largest suppliers of packaged bread to Britain’s major supermarkets.

ABF owns Kingsmill’s immediate parent, Allied Bakeries, which has struggled in recent years amid persistent price inflation, changing consumer preferences and competition from larger rival Warburtons as well as new entrants to the market.

Confirmation of the tie-up will come three months after Sky News revealed that ABF and Endless – Hovis’s owner since 2020 – were in discussions.

Industry sources have estimated that a combined group could benefit from up to £50m of annual cost savings from a merger.

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Allied Bakeries was founded in 1935 by Willard Garfield Weston, part of the family which continues to control ABF, while Hovis traces its history even further, having been created in 1890 when Herbert Grime scooped a £25 prize for coming up with the name Hovis, which was derived from the Latin ‘Hominis Vis’ – meaning ‘strength of man”.

The overall UK bakery market is estimated to be worth about £5bn in annual sales, with the equivalent of 11m loaves being sold each day.

Critical to the prospects of a merger of Allied Bakeries, which also owns the Sunblest and Allinson’s bread brands, and Hovis taking place will be the view of the Competition and Markets Authority (CMA) at a time when economic regulators are under intense pressure from the government to support growth.

Warburtons, the family-owned business which is the largest bakery group in Britain, is estimated to have a 34% share of the branded wrapped sliced bread sector, with Hovis on 24% and Allied on 17%.

A merger of Hovis and Kingsmill would give the combined group the largest share of that segment of the market, although one source said Warburtons’ overall turnover would remain higher because of the breadth of its product range.

Responding to Sky News’ report in May of the talks, ABF said: “Allied Bakeries continues to face a very challenging market.

“We are evaluating strategic options for Allied Bakeries against this backdrop and we remain committed to increasing long-term shareholder value.”

Prior to its ownership by Endless, Hovis was owned by Mr Kipling-maker Premier Foods and the Gores family.

At the time of the most recent takeover, High Wycombe-based Hovis employed about 2,700 people and operated eight bakery sites, as well as its own flour mill.

Hovis’s current chief executive, Jon Jenkins, is a former boss of Allied Milling and Baking.

ABF declined to comment, while neither Endless nor Hovis could be reached for comment.

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Chancellor warned ‘substantial tax rises’ needed – as she faces ‘impossible trilemma’

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Chancellor warned 'substantial tax rises' needed - as she faces 'impossible trilemma'

Rachel Reeves will need to find more than £40bn of tax rises or spending cuts in the autumn budget to meet her fiscal rules, a leading research institute has warned.

The National Institute of Economic and Social Research (NIESR) said the government would miss its rule, which stipulates that day to day spending should be covered by tax receipts, by £41.2bn in the fiscal year 2029-30.

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In its latest UK economic outlook, NIESR said: “This shortfall significantly increases the pressure on the chancellor to introduce substantial tax rises in the upcoming autumn budget if she hopes to remain compliant with her fiscal rules.”

The deteriorating fiscal picture was blamed on poor economic growth, higher than expected borrowing and a reversal in welfare cuts that could have saved the government £6.25bn.

Together they have created an “impossible trilemma”, NIESR said, with the chancellor simultaneously bound to her fiscal rules, spending commitments, and manifesto pledges that oppose tax hikes.

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The institute urged the government to build a larger fiscal buffer through moderate but sustained tax rises.

“This will help allay bond market fears about fiscal sustainability, which may in turn reduce borrowing costs,” it said.

“It will also help to reduce policy uncertainty, which can hit both business and consumer confidence.”

It said that money could be raised by reforms to council tax bands or, in a more radical approach, by replacing the whole council tax system with a land value tax.

To reduce spending pressures, NIESR called for a greater focus on reducing economic inactivity, which could bring down welfare spending.

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Growth to remain sluggish

The report was released against the backdrop of poor growth, with the chancellor struggling to ignite the economy after two months of declining GDP.

The institute is forecasting modest economic growth of 1.3% in 2025 and 1.2% in 2026. That means Britain will rank mid-table among the G7 group of advanced economies.

‘Things are not looking good’

However, inflation is likely to remain persistent, with the consumer price index (CPI) likely to hit 3.5% in 2025 and around 3% by mid-2026. NIESR blamed sustained wage growth and higher government spending.

It said the Bank of England would cut interest rates twice this year and again at the beginning of next year, taking the rate from 4.25% to 3.5%.

Persistent inflation is also weighing on living standards: the poorest 10% of UK households saw their living standards fall by 1.3% in 2024-25 compared to the previous year, NIESR said. They are now 10% worse off than they were before the pandemic.

Professor Stephen Millard, deputy director for macroeconomics at NIESR, said the government faced tough choices ahead: “With growth at only 1.3% and inflation above target, things are not looking good for the chancellor, who will need to either raise taxes or reduce spending or both in the October budget.”

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