Prime Minister Liz Truss’s external adviser on the economy has told Sky News that the chancellor had “taken his eye off the ball” and “overstepped the mark” with his mini-budget.
Gerard Lyons, who is often referred to as Ms Truss’s favourite economist, said Chancellor Kwasi Kwarteng failed to adequately prepare the financial markets ahead of his announcement.
Speaking on The Take With Sophy Ridge, Mr Lyons said: “The chancellor, whilst he had focused on the general public and on British businesses, he had not really prepared the financial markets fully.
“And I think he had taken his eye off the ball slightly, shall we say, in having not prepared the markets for what he was doing in the budget and I felt that he overstepped the mark last week.
“So it was a combination of all three factors – the febrile markets because of the global backdrop, the actions of the Bank of England last Thursday, but let’s be in no doubt, it was primarily the mini-budget last Friday that triggered this latest series of events.”
Asked if he had had any conversations with Ms Truss or her team, Mr Lyons said he had “made my thoughts known”. He said he was “highlighting in my writing… about the febrile state of the markets and the need to keep the markets onside”.
Pushed on whether they had taken his advice, he said: “Well, sometimes people listen, sometimes they don’t, but there were positives that came out of it. But as we saw last Friday, there was just not enough in line with what the markets had been prepped for and were expecting.”
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Despite his remarks, Mr Lyons said the budget was “very positive in many respects”.
He said it was “very much on a pro-growth agenda” which was needed to “break out of this low-growth phrase”.
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‘Mini-budget not what the markets were expecting’
Mr Lyons’s remarks about the chancellor failing to prepare the financial markets were contrasted by a minister who told deputy political editor Sam Coates it was “bulls***t” to say market movement was related to the mini-budget announcement.
And on The Take with Sophy Ridge, chief secretary to the Treasury Chris Philp denied the government had any responsibility and said there would be no change of course.
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“Getting Britain’s economy growing is so important. Important to raise wages and important to pay the tax bills of the future,” he said.
Mr Philp suggested benefits may not be hiked in line with spiralling inflation. He said a commitment by former chancellor Rishi Sunak to uprate benefits in line with inflation was under consideration amid reports different government departments have been asked to draw up plans for efficiency savings.
Mr Philp told ITV’s Peston: “We are going to look for efficiencies wherever we can find them.”
But he said the Treasury would not commit to an expected uprating of benefits in line with inflation.
Pressed about the decision, he said: “I am not going to make policy commitments on live TV, it is going to be considered in the normal way, we will make a decision and it will be announced I am sure in the first instance to the House of Commons.”
The Bank will buy as many long-dated government bonds as needed between now and 14 October in a bid to stabilise financial markets.
The announcement had an immediate effect on the market, with data showing 30-year bond yields fell back to 4.3%, having risen to levels above 5% not seen since 2002, earlier on Wednesday. There were similar falls for 20-year yields.
Ms Truss is expected to face public questioning about her economic plans for the first time on Thursday as she tours regional BBC radio stations in a morning round of interviews. Neither the prime minister nor the chancellor were anywhere to be seen or heard on the economy on Wednesday.
The television production company founded by broadcaster Jake Humphrey and former racing driver David Coulthard is in talks with potential buyers about a sale.
Sky News has learnt that Whisper Group, which was established in 2010 and won a BAFTA for its coverage of the Women’s Euros in 2022, is working with advisers on a deal.
The company is said to be open to a range of options, including the sale of a majority or minority stake to either financial investors or a strategic buyer.
Corporate financiers at KPMG are orchestrating talks with potential bidders.
Whisper is already 30%-owned by Sony Pictures Television, which acquired the stake in 2020.
It replaced Channel 4’s Indie Growth Fund as an investor in the business.
A majority of the shares in Whisper are owned by its founders and management team.
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Image: Lioness Millie Bright celebrates England’s win at the Women’s Euros 2022, the coverage of which was produced by Whisper. File pic: Reuters
The company is best-known for its sports productions, and is responsible for Channel 4’s Formula One coverage as well as international cricket, boxing and the Paralympics.
Whisper employs about 300 people, and has operations in London, Cardiff, Manchester and Riyadh.
Its chief executive, Sunil Patel, co-founded the producer alongside Mr Coulthard and Mr Humphrey.
It is said to be plotting further expansion in sport in the form of bigger events and rightsholders, as well as in events, where its clients include Red Bull.
Whisper is also focused on growing its presence in the US, where it currently works with Tom Brady’s Religion of Sport, and the Middle East, where it is partnered with Neom and Saudi Pro League teams.
Outside of sports rights, it has produced documentaries about Ben Stokes, the England Test cricket captain, and Sven-Goran Eriksson, the late England football manager.
It has also diversified into entertainment programming, producing the Wheel of Fortune gameshow hosted by Graham Norton.
Its most recent accounts disclosed a £4.3m pre-tax profit for the year to March 31, 2024.
“Whisper has successful diversified into factual, entertainment and events to complement the wider blend of work across its sports broadcast contracts,” it said in a statement accompanying the accounts.
“It has been another successful year for contract wins, with a series of renewals with key clients and a new range of significant projects which will help ensure visibility over the next few years.”
The sale process comes as ITV holds talks about a merger of its Studios arm with RedBird IMI-owned All3Media, one of Britain’s biggest production companies.
A combination of the two businesses could be announced during the spring, according to banking sources.
This weekend, a spokesman for Whisper declined to comment.
Modella Capital won the final stage of the auction process in a run off against Alteri investors – both specialists in turning around troubled retailers.
The deal will see the WH Smith name erased from town centres to become TGJones.
The sale allows the WH Smith business to focus fully on its lucrative travel retail arm.
That has around 1,200 stores, based mainly at airports and railway stations, in 32 countries globally and accounts for 85% of group profits.
Chief executive Carl Cowling said: “Given our rapid international growth, now is the right time for a new owner to take the High Street business forward and for the WH Smith leadership team to focus exclusively on our Travel business”.
There was no word on what the new owners may do to bolster profitability, with a question mark firmly hanging over employment and the store estate – often the subject of criticism over a perceived lack of investment.
WH Smith’s statement said: “All stores, colleagues, assets and liabilities of the High Street business will move under Modella Capital’s ownership as part of the Transaction.
“Under this new ownership, the business will be led by Sean Toal, currently CEO of the High Street business. The High Street business will operate for a short transitional period under the WHSmith brand whilst the business rebrands as TGJones.”
The sale to Modella represents an enterprise value of £76m on a cash and debt-free basis but will see WH Smith secure an estimated £25m on a net basis after several costs associated with the sale are accounted for.
The chairman of P&O Ferries’ parent company DP World has told Sky News he went ahead with a £1bn investment in the UK despite feeling “discredited” by criticism from a cabinet minister.
P&O was widely criticised in 2022 when more than 700 seafarers were summarily fired and replaced by largely overseas workers without consultation.
Last October, the issue threatened DP World’s planned expansion of London Gateway, its deepwater port on the Thames Estuary, when the then transport secretary, Louise Haigh, described P&O as a “rogue operator”.
Her comments came as DP World was in the final stages of negotiating a £1bn investment in the port, due to be announced at the government’s investment summit.
In response, DP World pulled the announcement and only relented following a personal intervention by the prime minister to keep his showpiece event on course.
Image: DP World chairman Sultan Ahmed Bin Sulayem
Speaking exclusively to Sky News, Sultan Ahmed Bin Sulayem said the criticism was unexpected given the scale of his planned investment in the UK.
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‘Water under the bridge’
“There was a misunderstanding. Someone, unfortunately, said something that was not what we expected.
“We were going to invest in infrastructure, a huge investment, and then we get the person in charge to basically discredit us. But it’s water under the bridge.”
Bin Sulayem confirmed that he had spoken with the prime minister and received “reassurances” that Ms Haigh was expressing a personal view. She subsequently resigned after admitting a fraud offence.
The chairman also defended P&O’s conduct, saying that having received no state support during the pandemic, the cuts were necessary to save the company.
“We had a choice. We either close down the company and 3,000 people or more lose their jobs, or we try to survive by letting 700 or so go. And we felt that was right,” he said.
“Maybe we didn’t follow the procedures, but most importantly, we compensated every employee with more than what the law said.”
Image: DP World’s London Gateway container port in Stanford-le-Hope, Essex. File pic: PA
Bin Sulayem was speaking on a flying visit to the UK intended to rebuild relations with the government, meeting investment minister Poppy Gustaffsen at London Gateway to discuss an expansion that will make the port Britain’s largest by volume and offering encouraging words about the UK’s attractiveness to investors.
“We believe in the UK economy, in its strength, and we believe the economic fundamentals are strong. That’s why we invested,” he said.
“The UK has the best stock market in the world. You have English law, and you have the best universities in Oxford and Cambridge. If we look to the future, it will be the economy of the brain, not the economy of the hand.
“The world economy doesn’t want labourers, it wants brains. People want engineers. They want free thinkers. They want innovators. That is what’s here, and that’s why we invested in London Gateway.”
Image: Sky’s Paul Kelso with Bin Sulayem
Tariff trade trouble
With ports and logistics operations in more than 70 countries handling around 10% of global trade, DP World’s chairman has a unique insight into global trade and the likely impact of the tariff war sparked by Donald Trump.
While confident that trade will find a way to navigate the disruption, he warned America’s trading partners to take the president seriously.
“I think psychologically it will [have an impact], but in reality it will not, because trade is resilient. I think of it like water coming from the mountain in the rain, nobody can stop it. If you can’t sell a product in one place, you can sell it somewhere else.
“Trump is a deal maker. He is making threats because that’s the way he negotiates. He comes with impossible demands because he wants people to come to the table.
“But he’s serious. He will do what he’s threatening if nobody makes a deal.”