New figures are expected to show inflation returned to double figures in September due to still-rising food prices.
The Office for National Statistics will reveal the latest increase in the cost of living for UK households on Wednesday morning.
And economists have predicted it will show Consumer Price Index (CPI) inflation increased to 10% in September, compared with 9.9% the previous month.
There is likely to be an increase, despite falls in petrol prices (which dropped by around 4% over the month according to Forex.com) and used car prices.
Food inflation is predicted to have jumped to 14.3% from 13.1% in August.
The figures will be released with just 12 days left for new Chancellor Jeremy Hunt to find ways to gain economic confidence – and a plug for Britain’s funding gap – before the 31 October “medium-term fiscal plan” from the Office for Budget Responsibility (OBR).
Former Chancellor Kwasi Kwarteng‘s ill-fated mini-budget, just over three weeks ago, caused turmoil on financial markets. Economists estimated the government was facing a £60bn black hole in public finances following his announcements, which included £45bn of unfunded tax cuts for high earners.
The September inflation figure has implications for other areas too, including benefits and pensions.
It will be used as part of the Work and Pensions Secretary’s annual benefits uprating review.
If the government decides to uprate benefits by inflation, this is the percentage they will be increased by, and will come into effect from next April.
It will also be used for reviewing the triple-lock pension commitment.
The triple-lock means pensions will rise by either average earnings, CPI inflation based on September’s rate, or 2.5% – whichever is highest.
With average earnings most recently hitting 5.4%, the triple lock should ensure pensions rising by the inflation rate in April next year.
Image: Therese Coffey, the Secretary of State for Work and Pensions, will oversee any triple-lock changes
However, on Tuesday, Downing Street indicated ministers could ditch their commitment to the triple lock as Mr Hunt finds ways to claw back funds.
It will not only be inflation figures that benefit claimants will have a keen eye on, The Times says there are fears too, the cap on the cost of social care – promised by PM Liz Truss a month ago – might be scrapped.
From October 2023 there is due to be an £86,000 cap on personal care payments for all adults of any age without exemption.
Once a person has paid enough to reach this limit, state support kicks in to cover their care costs.
The chancellor may decide that is something the government can no longer afford.
Image: Jeremy Hunt and Liz Truss
On Monday, Mr Hunt revealed he was reversing “almost all” of the tax cuts announced in his predecessor’s mini-budget and was also scaling back support for energy bills.
In an emergency statement, the chancellor said a 1p cut to income tax will be delayed “indefinitely” until the UK’s finances improve, instead of being introduced in April 2023 as previously announced.
Mr Hunt, who only stepped into the job on Friday, said the government’s energy price guarantee will only be universal until April – not for two years as originally planned.
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3:33
Analysis: Sky’s economics editor Ed Conway explains why the new Chancellor’s announcement was so surprising.
As the economic fallout continues, a new survey has showed confidence among British businesses has dropped.
The Federation of Small Businesses (FSB) said its latest small business confidence index fell to -35.9 from -24.7, the worst reading outside of COVID-19 lockdowns.
The survey ran from 20 September to 4 October, covering much of the period since the prime minster and Mr Kwarteng first published their economic plans, which triggered a historic sell-off in British assets, a tumbling of the value of the pound, rocketing mortgage rates and pension funds being put at risk.
Worldwide stock markets have plummeted for the second day running as the fallout from Donald Trump’s global tariffs continues.
While European and Asian markets suffered notable falls, American indexes were the worst hit, with Wall Street closing to a sea of red on Friday following Thursday’s rout – the worst day in US markets since the COVID-19 pandemic.
All three of the US’s major indexes were down by more than 5% at market close; The Dow Jones Industrial Average plummeted 5.5%, the S&P 500 was 5.97% lower, and the Nasdaq Composite slipped 5.82%.
The Nasdaq was also 22% below its record-high set in December, which indicates a bear market.
Ever since the US president announced the tariffs on Wednesday evening, analysts estimate that around $4.9trn (£3.8trn) has been wiped off the value of the global stock market.
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Mr Trump has remained unapologetic as the markets struggle, posting in all-caps on Truth Social before the markets closed that “only the weak will fail”.
The UK’s leading stock market, the FTSE 100, also suffered its worst daily drop in more than five years, closing 4.95% down, a level not seen since March 2020.
And the Japanese exchange Nikkei 225 dropped by 2.75% at end of trading, down 20% from its recent peak in July last year.
Image: US indexes had the worst day of trading since the COVID-19 pandemic. Pic: Reuters
Trump holds trade deal talks – reports
It comes as a source told CNN that Mr Trump has been in discussions with Vietnamese, Indianand Israelirepresentatives to negotiate bespoke trade deals that could alleviate proposed tariffs on those countries before a deadline next week.
The source told the US broadcaster the talks were being held in advance of the reciprocal levies going into effect next week.
Vietnam faced one of the highest reciprocal tariffs announced by the US president this week, with 46% rates on imports. Israeli imports face a 17% rate, and Indian goods will be subject to 26% tariffs.
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China – hit with 34% tariffs on imported goods – has also announced it will issue its own levy of the same rate on US imports.
Mr Trump said China “played it wrong” and “panicked – the one thing they cannot afford to do” in another all-caps Truth Social post earlier on Friday.
Later, on Air Force One, the US president told reporters that “the beauty” of the tariffs is that they allow for negotiations, referencing talks with Chinese company ByteDance on the sale of social media app TikTok.
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6:50
Tariffs: Xi hits back at Trump
He said: “We have a situation with TikTok where China will probably say, ‘We’ll approve a deal, but will you do something on the tariffs?’
“The tariffs give us great power to negotiate. They always have.”
Global financial markets gave a clear vote of no-confidence in President Trump’s economic policy.
The damage it will do is obvious: costs for companies will rise, hitting their earnings.
The consequences will ripple throughout the global economy, with economists now raising their expectations for a recession, not only in the US, but across the world.
The court ruled to uphold the impeachment saying the conservative leader “violated his duty as commander-in-chief by mobilising troops” when he declared martial law.
The president was also said to have taken actions “beyond the powers provided in the constitution”.
Image: Demonstrators stayed overnight near the constitutional court. Pic: AP
Supporters and opponents of the president gathered in their thousands in central Seoul as they awaited the ruling.
The 64-year-old shocked MPs, the public and international allies in early December when he declared martial law, meaning all existing laws regarding civilians were suspended in place of military law.
Image: The court was under heavy police security guard ahead of the announcement. Pic: AP
After suddenly declaring martial law, Mr Yoon sent hundreds of soldiers and police officers to the National Assembly.
He has argued that he sought to maintain order, but some senior military and police officers sent there have told hearings and investigators that Mr Yoon ordered them to drag out politicians to prevent an assembly vote on his decree.
His presidential powers were suspended when the opposition-dominated assembly voted to impeach him on 14 December, accusing him of rebellion.
The unanimous verdict to uphold parliament’s impeachment and remove Mr Yoon from office required the support of at least six of the court’s eight justices.
South Korea must hold a national election within two months to find a new leader.
Lee Jae-myung, leader of the main liberal opposition Democratic Party, is the early favourite to become the country’s next president, according to surveys.