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Friday’s mini-budget that promised billions in tax cuts and a multi-billion pound energy price cap has seen the value of the pound plummet against foreign currencies.

The new prime minister and her chancellor’s decision to cut various taxes by a combined £45bn, alongside a cap on energy prices that will cost taxpayers £60bn has resulted in a loss of market confidence.

Lenders withdraw mortgage profits; live pound updates

That loss of confidence in the government’s ability to pay back the billions they are spending means the Bank of England is likely to raise interest rates – in a desperate bid to bring down inflation.

This all has an effect on Britain’s day-to-day spending. Here, Sky News looks at who will suffer and who will benefit from the pound’s slump.

Petrol

Fuel is traded in dollars.

This means that a low pound will buy less fuel, forcing prices at UK forecourts to rise.

Drivers will have noticed a recent dip in prices at the pumps – compared with this summer when they approached £2 a litre for diesel.

But the slump in value of the pound will likely wipe out that fall, which was a welcome relief for many.

According to the AA, a pound that equals $1.08 will mean an extra 13.5p per litre of petrol.

That would add around £7.50 to the cost of filling up an average 55-litre car, when factoring in VAT.

An AA spokesman added that had it not been for former Chancellor Rishi Sunak’s decision to cut fuel duty by 5p in March, motorists would have likely seen an even bigger increase in the price per litre – of around 18.5p.

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Why did the pound fall to a record low?

Energy

Gas is also traded in dollars and therefore also suffers from a poor exchange rate.

As with oil, wholesale prices have dropped internationally since the start of the war in Ukraine, but with a weak pound, similarly the UK won’t experience the benefits.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, tells Sky News: “At this stage, this won’t affect bill payers directly, because the energy price cap is set below international energy prices, so we’ll be paying less anyway.

“Instead it will have an impact on how much the guarantee will cost the government.”

The more the price cap costs the government, the less confidence the market will have in the government’s capacity to pay it back, causing the original problem to spiral further.

Food

Any goods imported to the UK from abroad will cost more when the pound is weaker.

According to the government’s most recent food security report, the UK imports around 45% of its food.

This has proven a major problem during the Ukraine war, with grain exports unable to leave the country for several months this year.

Along with the dollar, the pound is also faring badly against the Euro, which will mean European-grown fruit and veg prices will increase.

Produce grown further afield, such as bananas, will also go up.

Not all retailers will pass all of that cost onto their customers, however.

Supermarkets are often the last to increase their prices off the back of rising costs, as they try to remain affordable, and often buy stocks in advance to mitigate sudden market shocks.

But Ms Coles cautions: “Supermarkets have warned that although they are already absorbing a great deal of the increased costs of supply, they have to pass some of it on.”

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Why does the weak pound matter?

Tech

Most of our tech gadgets, such as smartphones and tablets, are manufactured abroad.

Apple, for example, is based in California, but uses parts manufactured in China and Taiwan.

Again, a week pound will mean these foreign-made products cost more in the UK.

Apple has already increased the price of its latest iPhone range. The iPhone 13 started at £949 when it launched last year. The iPhone 14 range is retailing at £1,099 – a 16% increase.

Holidays abroad

The most obvious place consumers will experience the slump in the pound is at the bureau de change.

Holidaymakers bound for the US will get particularly less for their money than they used to – but with the pound also down against the Euro, holidays to Europe will also be more expensive.

With the cost of fuel also on the rise, airlines and package holiday providers may also increase their prices to mitigate costs.

Mortgages

A weak pound means inflation – which is already at 10% – getting even higher.

When inflation is high, the Bank of England tries to bring it down by increasing interest rates.

This higher price of borrowing is designed to encourage people to borrow less, spend less, and save more.

Currently forecasts predict interest rates hitting 6% by November, which will mean huge increases in people’s mortgage repayments.

Halifax, the country’s largest mortgage provider, is removing fee-paying mortgages from Wednesday. These allow people to pay a fee in exchange for a lower interest rates.

Virgin Money and Skipton Building Society have withdrawn all their mortgage products until they have more certainty.

The two million people in the UK already on tracker and variable mortgages will see far more of their monthly pay packet spent on repayments.

And those coming to the end of a fixed rate or hoping to buy for the first time will have fewer, more expensive deals to choose from.

“The issue is the fact that fixed rate mortgages don’t just depend on the rate today, they also depend on rate expectation,” Ms Coles explains.

“The dramatic overnight change in market expectations of future rates has ramped up the cost of doing business, and lenders are taking a break to reassess and reprice.”

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Why some mortgage providers are pulling products

Pensions

People approaching retirement could suffer from UK bonds – or gilts – being sold off in response to the pound’s fall.

Some investors automatically switch people’s pensions from stocks to government bonds as they get closer to retirement age, which will leave them with a smaller pot in the current climate.

Pensioners living abroad will also suffer notably – as their pensions are paid in pounds but their expenses are in stronger currencies.

UK exporters

British businesses that sell their products and services abroad will benefit from the pound’s slump as foreign buyers look to take advantage of cheaper prices.

This will see the FTSE 100 companies benefit, as much of their money is made overseas, Ms Coles says.

It could also provide much-needed help for smaller UK businesses struggling with the increased costs of Brexit.

Local tourism

More holidaymakers could be drawn to the UK from abroad by the promise of a cheaper holiday.

While Britons get less for their money at the bureau de change, inbound tourists will get more.

Read more:
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For example, a London hotel room that cost $200 (£186) at the start of 2022 now only costs $150.

Britons could also return to the ‘staycation’ trend seen during the COVID pandemic and also help boost the economy by supporting tourism and hospitality businesses at home.

Hedge funds

Hedge funds employ a strategy called ‘short selling’ or ‘shorting’ to take advantage of falling market prices.

It involves borrowing shares in a firm and selling them with a view to buying them back at a profit when prices fall.

Ms Coles says: “Plenty of hedge funds were shorting the pound before the fall – based on the belief that the markets had underestimated how long inflation would stick around for.

“So these paid off when the pound tumbled.”

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Man dies after being crushed by pop-up telescopic urinal in London’s West End

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Man dies after being crushed by pop-up telescopic urinal in London's West End

A maintenance worker in central London has died after being crushed by a hydraulic telescopic urinal – one that’s kept underground during the day and kept out overnight.

Emergency services were called to Cambridge Circus in the West End just after 1pm on Friday to reports of a “seriously injured” man.

The incident took place outside the Palace Theatre, home to Harry Potter And The Cursed Child.

Firefighters, ambulance crews and an air ambulance were deployed at 1.05pm and police were called five minutes later.

Emergency services tried to save the man, who has not been named, but he died at the scene.

Emergency services work to free the man. Pic: KetoCancerQueen
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Emergency services worked to free the man. Pic: KetoCancerQueen

In a statement on Twitter, Metropolitan Police said: “We’re sorry to have to update that, despite the efforts of emergency services, the man who was critically injured in Cambridge Circus was pronounced dead at the scene.

“His next of kin have been informed. Cordons remain in place at the location.

“Police were called at around 1.10pm on Friday January 27, to a seriously injured man at Cambridge Circus, W1.

“The man is thought to have sustained crush injuries while working on a telescopic urinal at the location.”

A London Ambulance Service spokesman said: “We were called today at 1.05pm to reports of an incident on Shaftesbury Avenue, Charing Cross.

“We sent a number of resources to the scene, including an ambulance crew, members of our hazardous area response team, members of our tactical response unit and a medic in a fast response car.

“We also dispatched London’s Air Ambulance.”

Roads in the area have been closed.

The telescopic or hydraulic urinal is a pop-up urinal that comes out of the ground at night and is stored underground during the day.

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Wynter Andrews: Nottingham University Hospitals NHS trust fined £800,000 over baby’s death 23 minutes after birth

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Wynter Andrews: Nottingham University Hospitals NHS trust fined £800,000 over baby's death 23 minutes after birth

An NHS trust has been fined £800,000 for a “catalogue of failings and errors” that led to the death of a baby 23 minutes after she was born.

Wynter Andrews died in the arms of her parents, Sarah and Gary Andrews, on 15 September 2019 due to a lack of oxygen to the brain, shortly after an emergency Caesarean section at the Queen’s Medical Centre in Nottingham.

Sarah and Gary Andrews arrive at Nottingham Magistrates' Court
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Sarah and Gary Andrews arrive at Nottingham Magistrates’ Court on Friday morning

Nottingham University Hospitals (NUH) NHS Trust had admitted two counts of failing to provide safe care and treatment resulting in harm and loss at a court hearing on Wednesday.

Sentencing at the city’s magistrates’ court on Friday, district judge Grace Leong said: “The catalogue of failings and errors exposed Mrs Andrews and her baby to a significant risk of harm which was avoidable, and such errors ultimately resulted in the death of Wynter and post-traumatic stress for Mrs Andrews and Mr Andrews.

“My assessment is that the level of culpability is high, where offences on Wynter and Mrs Andrews are concerned.

“There were systems in place, but there were so many procedures and practices where guidance was not followed or adhered to or implemented.”

District judge Leong added the “systematic failures” were “more than sufficient” to cause harm to Wynter and her mother.

She said the total fine, combining the sums for offences against both Wynter and Mrs Andrews, would have been £1.2m, but this was reduced to £800,000 due to the trust’s early guilty pleas.

The judge also said she was “acutely aware” any fine would have to be paid out of public funds which would otherwise be spent on patient care.

The trust, which will pay prosecution costs of £13,668.65 and a victim surcharge of £181, has asked for two years to pay the fine.

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Speaking outside the court, Mrs Andrews said she hoped the significant fine “sends a clear message to trust managers that they must hold patient safety in the highest regard”.

She added: “Sadly, we are not the only family harmed the trust’s failings.

“We feel that this sentence isn’t just for Wynter, but it’s for all the other babies that have gone before and after her.”

Mrs Andrews has previously said she was “failed in the most cruel way” by the trust and its management had been “repeatedly warned by staff about safety at the unit” but “failed to act”.

The Care Quality Commission (CQC), which inspects health services in England, said last July that it would prosecute the trust.

The maternity unit at the QMC was rated as inadequate by the CQC, with the hospital overall rated as requiring improvement, when it was inspected last March.

Mrs Andrews was admitted to hospital on 14 September 2019, her planned due date, after an “uncomplicated” pregnancy.

An induced labour planned for 7 September was cancelled on her request, but an investigation later found this was signed off by a midwife without consulting an obstetrician, and limited reasoning was given for the decision in medical notes.

Once Mrs Andrews was in labour, Wynter’s heartbeat was described as “suspicious” by doctors, who decided to deliver her via caesarean section.

After complications during the surgery, she was delivered in a “poor” condition and died 23 minutes and 30 seconds later despite “extensive efforts” to resuscitate her.

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Jeremy Hunt confirms HS2 will reach central London after reports it might stop in suburbs

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Jeremy Hunt confirms HS2 will reach central London after reports it might stop in suburbs

HS2 will end at Euston after reports the high speed line could stop before reaching central London, the chancellor has confirmed.

Jeremy Hunt said he did not see “any conceivable circumstance” the original plan would not be followed and that he was “incredibly proud” of the work going ahead.

The end-point of the line came into question after a report in the Sun, claiming the last leg of HS2 could be scrapped and replaced with a new hub at Old Oak Common in the suburbs of west London.

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This would leave passengers having to finish their journey into the centre of the capital on the new Elizabeth underground line.

The government did not deny the reports or that a two to five-year delay to the entire project – currently due to be completed between 2029 and 2033 – was being considered due to record high inflation impacting costs.

However, when asked if he and the government were committed to the line ending in Euston as planned, Mr Hunt said: “Yes we are.”

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Jeremy Hunt dismissed reports the Euston hub would be scrapped.

The chancellor added: “I don’t see any conceivable circumstance in which that would not end up at Euston and indeed I prioritised HS2 in the autumn statement.

“We have not got a good record in this country of delivering complex, expensive infrastructure quickly but I’m incredibly proud that for the first time in this last decade under a Conservative government we have shovels in the ground, we are building HS2 and we are going to make it happen.”

Planning your route into London

Making the the final southern destination for HS2 a station at Old Oak Common – which is yet to be built – could well have saved the government billions.

But what would the impact have been on passengers?

Let’s say Euston is your final destination.

You would get off at the new station, which will be fairly close to Hammersmith in west London, and take the Elizabeth Line to Tottenham Court Road – a journey of around 15 minutes.

From there, you could take the Northern Line two stops to Euston.

Or, if you’re feeling energetic, it would be a 20-minute walk.

Map shows journey from Old Oak Common to central London
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Map shows journey from Old Oak Common to central London

The HS2 project has been dogged by criticism over its financial and environmental impact.

In October 2021, Levelling Up Secretary Michael Gove suggested capital investment for the line would be reviewed.

But after being installed at Number 11, Mr Hunt subsequently backed the project.

The target cost of Phase 1 between London and Birmingham was £40.3bn at 2019 prices, despite an overall budget of £55.7bn being set just four years earlier.

Penny Gaines from campaign group Stop HS2 said it is “not at all surprising” that costs were spiralling out of control.

“These reports just show that there are so many problems with HS2,” she added. “It’s being delayed further and further so the cost is going up, it should be cancelled in its entirety as soon as possible.”

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