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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:
The good and the bad news on the pound
Five reasons the pound ‘doom loop’ matters

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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Rats, flies and maggots: The Wigan homeowners plagued by 25,000 tonnes of illegal waste

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Rats, flies and maggots: The Wigan homeowners plagued by 25,000 tonnes of illegal waste

“That smell of maggots, rotting food and maggots, my house smells like that.”

For Louise, not her real name, home has become a hell she cannot escape.

“We just couldn’t move for flies, and then we noticed an increase in rats,” she says.

Louise lives near Bolton House Road in Wigan. At the end of a row of terraced houses sits a former scrapyard, which has been transformed into an industrial-scale illegal dump site.

The wagons started coming last winter, “20, maybe 30 times a day,” Louise remembers.

“Eighteen-tonne wagons. Full of all sorts; nappies, black bin rubbish, chemicals, plastic.”

Within a few weeks, she and her neighbours realised the waste was just being dumped, not sorted or managed. It piled up, higher and higher.

They contacted the council, the Environment Agency and the police – but Louise claims no one did anything to stop the lorries.

Her retired neighbour, Tom, says it felt like the authorities “didn’t want to know”.

Though he does remember someone from the council asking him if he could go and “have a look for them” and “report back” information about what sort of waste was being dumped.

Louise and Tom are both so worried about who could be behind this that they are only comfortable speaking anonymously.

The fire which lasted nine days

By July’s heatwave, the site had long been full. The wagons had stopped months earlier, so 25,000 tonnes of waste, several storeys high, sat festering in the sun.

Lorries and vehicles in the former scrapyard lay buried, unseen, beneath the shredded and rotting filth – and then the fire started.

For nine days, dozens of firefighters from across Greater Manchester fought to bring the fire under control.

Pic: Wigan Council
Image:
Pic: Wigan Council

Pic: Wigan Today
Image:
Pic: Wigan Today

The nearby primary school had to shut due to the acrid smoke.

The sheer amount of water needed by fire engines to tackle the blaze left residents without any – while many were forced to keep their windows and doors shut in the 30C-plus heat.

Some were left with chest infections, others were hospitalised.

“I think it’s awful to let people live with that toxic rubbish right next to our house after us all asking for help and nothing’s materialised,” Louise says.

The crime costing the economy billions

Sky News has been investigating how, across the country, waste crime is a growing scourge and a booming business being exploited by criminal gangs.

Being paid to remove rubbish only to dump it illegally without sorting it or paying tax is an easy way of making huge amounts of money, with poorly enforced legal repercussions and a huge cost to the environment.

It’s something the previous head of the Environment Agency called “the new narcotics”.

– It’s thought a fifth of all waste in England is being illegally managed

– That’s around 34 million tonnes a year, enough to fill about four million skips

– It costs the economy around a billion pounds a year, with legitimate operators thought to be losing a further £3bn from missed business

In July, we tracked down a group of suspected organised fly-tippers who waved wads of cash on TikTok after dumping waste in the countryside.

‘Absolutely soul-destroying’

The residents of Bolton House Road are not the only victims of this toxic dump.

Last winter, Neil Hardwick rented out three diggers to an individual, unaware of the growing illegal dump site in Wigan.

By March of this year, he had not received several rental payments and had received a call from the Environment Agency warning him about what was happening at the site.

Neil and Carla Hardwick
Image:
Neil and Carla Hardwick

With his daughter Carla, he went to Bolton House Road in an attempt to retrieve the machinery, worth approximately £300,000 in total.

At the site, Carla says a group of men slapped her, as well as spat at her. The men allegedly told her father: “We want you to give us £100,000, and we’ll allow you to take your diggers back, or we can cut your throat.”

Carla and Neil say an officer from Greater Manchester Police dismissed their report, and claimed their machinery was not stolen.

That officer also threatened to arrest the pair if they did not leave the area, they say.

“I just wanted us to get those machines back. But the fact that a man can spit in a woman’s face and get away with it, and the police are not interested, well, it is maddening,” Carla said.

The Hardwicks returned to the site 10 days later with officers from the National Crime Agency but found their machines smashed up and destroyed.

Mr Hardwick said the ordeal was “absolutely soul-destroying”.

“It’s caused us so much grief, damage to business, just absolutely brought us to our knees,” he said.

A vehicle used to transport waste to the illegal dump
Image:
A vehicle used to transport waste to the illegal dump

Greater Manchester Police told Sky News there is an ongoing complaint relating to the incident involving Neil and Carla Hardwick at Bolton House Road, and “this process will take time”.

“As part of this complaint, our Professional Standards Directorate are assessing all elements of the investigation including all crimes and reviewing bodyworn footage,” a spokesperson said.

The £4.5m bill

Finding out how the illegal dump in Wigan happened, and who’s responsible, is hugely challenging.

The landowner has not responded to Sky, nor have the companies which allegedly own the lorries seen by residents transporting the waste.

They appear to be either refuse or haulage companies that boast of their environmentally friendly credentials.

The firms seen moving waste to the illegal dump did not reply to Sky News
Image:
The firms seen moving waste to the illegal dump did not reply to Sky News

One company’s website claims it diverts most of its waste away from landfill, and advertises its “innovative approach” to waste management.

“We’re passionate about the environment,” the website says.

Josh Simons, the local Labour MP, has been outraged by the case.

Speaking before his promotion to the Cabinet Office, he said it is “buck-passing” between Wigan Council, the police, and the Environment Agency.

Mr Simons says he was told at the start of the year that there was a criminal investigation, “and therefore no action can be taken to prevent people from dumping more on the site or intervening”.

“That just doesn’t seem right to me,” he says.

He also says information and financial support from the Environment Agency to Wigan Council has been poor.

“The number [the council] have come up with is about £4.5m to clear the waste.

“Anybody who knows local authority budgets at the moment knows they don’t have nearly five million pounds stashed behind the sofa. So what’s supposed to happen?”

The land itself is not worth £4.5m – and Mr Simons thinks this makes working-class areas uniquely vulnerable to this kind of crime.

The funding and powers of the Environment Agency need to change, says Josh Simons MP
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The funding and powers of the Environment Agency need to change, says Josh Simons MP

Paul Barton, director for environment at Wigan Council, said: “Our top priority is to ensure those residents feel heard and safe while the Environment Agency carries out their investigation with our full cooperation.

“We want the site to be cleared as a matter of urgency and are continuing to work with the Environment Agency to survey and sample the waste so polluters/landowners – who are the responsible parties – can progress this as soon as possible.”

Paul Clements, director of operations at the Environment Agency, said: “We are prioritising local people, businesses and the nearby school as we work… to deal with this illegal waste site as quickly as possible.

“Our staff continue to visit the site and at the forefront of our minds is the impact the illegal waste is having on the local community.

“We are continuing to progress our criminal investigation as a priority. This includes actively pursuing many lines of enquiry, interviewing under caution and using the enforcement tools available to us.”

Additional reporting by Adam Parker, OSINT editor, and Niamh Lynch, planning producer

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Urgent action needed to stop fly-tipping by gangs, peers say

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Urgent action needed to stop fly-tipping by gangs, peers say

The Environment Agency (EA), police and other agencies are failing to stop fly-tipping by organised crime groups, a cross-party group of peers has found.

In a damning letter to the government, members of the House of Lords’ Environment and Climate Change Committee called for an independent review of waste crime, with the current approach “inadequate”.

Their report described the EA as “slow to respond to even the most flagrant and serious illegality” – and said its taskforce on waste crime appears “ineffective”.

Police are accused of showing a “lack of interest” in the crime, while penalties for criminals do not match their profits and are “insufficient to deter future offending”.

Read more:
Dirty work: The fly-tippers turning trash into cash

‘The new narcotics’

Sky News has been investigating the boom in waste crime – a trade so lucrative it has been named the “new narcotics”.

Our most recent investigation found that for months the Environment Agency failed to prevent 20 lorries a day dumping industrial levels of waste at the end of a residential street in Wigan.

Over the summer, the 25,000 tonnes of rubbish burnt for nine days – making life hell for residents.

In July, we tracked down a group of suspected organised fly-tippers who waved wads of cash on TikTok after appearing to dump waste in the countryside and in farmers’ fields.

The Lords’ committee has called for the EA’s Joint Unit for Waste Crime to do more to encourage collaboration between various authorities, and for the Department for Environment, Rural and Food Affairs to develop and publish targets for tackling this issue.

Peers have also demanded an end to what they call the “merry-go-round of reporting” where members of the public who report fly-tipping and waste crime in their area get bounced between various agencies.

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Criminals benefitting from trash

This is something Sky News has often heard from victims – they will call the police, only to be told to speak to the council, which then pushes them over to the EA.

Peers want a “single telephone number and web portal” which would triage responsibility for each case.

Read more from Sky News:
Could the UK run out of drinking water?
Mystery of what killed billions of starfish solved

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The boom in waste crime

An EA spokesperson said: “We recognise the recommendations of the report and are committed to doing more.

“Last year alone, our dedicated teams shut down 462 illegal waste sites and prevented nearly 34,000 tonnes of waste being illegally exported – showing that we can make real change despite the challenges involved.”

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King heckled over Prince Andrew and Jeffrey Epstein during visit

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King heckled over Prince Andrew and Jeffrey Epstein during visit

The King has been heckled over his brother Prince Andrew’s relationship with convicted sex offender Jeffrey Epstein during a visit to a cathedral.

Charles was shouted at by a man in the crowd outside Lichfield Cathedral in Staffordshire on Monday, who asked: “How long have you known about Andrew and Epstein?”

The protester, who was filming on a mobile phone, also said: “Have you asked the police to cover up for Andrew? Should MPs be allowed to debate the royals in the House of Commons?”

King Charles during his visit to Lichfield Cathedral. Pic: AP
Image:
King Charles during his visit to Lichfield Cathedral. Pic: AP

The King did not respond to the comments, which came as the monarchy faces increasing pressure to resolve the controversy surrounding Andrew, who earlier this month said he would stop using his Duke of York title and his knighthood after revelations in the posthumous memoir of sex assault accuser Virginia Giuffre.

The prince has always strenuously denied all allegations against him from the late Ms Giuffre.

Reports also emerged that claimed Andrew asked a royal close protection officer to “dig up dirt” on Ms Giuffre. The Metropolitan Police said it is “actively looking into the claims”.

At the moment, Andrew resides at Royal Lodge, a Windsor mansion where he effectively lives rent-free. He’s done so since 2003.

Obstacles to a settlement are reportedly where the prince, who remains eighth in line to the throne, will live and what financial recompense he will receive for the funds he spent renovating the home.

The Sun reported he is keen on Harry and Meghan’s former home Frogmore Cottage.

Prince Andrew and Jeffrey Epstein. Pics: PA/Sipa/Shutterstock
Image:
Prince Andrew and Jeffrey Epstein. Pics: PA/Sipa/Shutterstock

‘The royals need to be challenged’

Calls are still growing for Andrew’s dukedom to be revoked, which can only be done by an act of parliament.

Downing Street has indicated it its reluctance to do so, suggesting the King would not want the issue to take up politicians’ time.

Graham Smith, chief executive of anti-monarchy group Republic, said: “The royals need to be challenged, and if the politicians won’t do the job and the police won’t investigate, then more and more members of the public will be asking tough questions.”

He said he believed Monday’s heckler was “one of our own members but doing their own thing”.

After the visit to the cathedral, the King laid flowers at the UK’s first national memorial commemorating LGBT armed forces.

He was joined by dozens of serving and former members of the armed forces, as he met veterans who told of the trauma inflicted by the military’s former “gay ban”.

The memorial, titled An Opened Letter, was unveiled at the National Memorial Arboretum.

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