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.
Ukraine’s president is offering an olive branch to Donald Trump with a dramatic public message aimed at mending their relationship and ending Russia’s war.
He did not go so far as to apologise for a fiery bust-up with Mr Trump at the Oval Office last Friday – a move that some members of the US administration have called for, even though it was the American president and his deputy JD Vance who laid into Mr Zelenskyy.
Image: Ukrainian forces fire a missile towards Russian troops near Chasiv Yar. Pic: Reuters
Most significantly though was his spelling out of a vision for the first stage of how Russia’s war with Ukraine could end.
Pushing back on false claims by Trump allies such as Elon Musk that Mr Zelenskyy wants an endless war, he said that Ukraine is committed to peace and is ready to come to the negotiating table as soon as possible.
Crucially, he said: “We are ready to work fast to end the war, and the first stages could be the release of prisoners and truce in the sky – ban on missiles, long-ranged drones, bombs on energy and other civilian infrastructure – and truce in the sea immediately, if Russia will do the same.”
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Appealing to the US president’s ego, he praised Mr Trump’s “strong leadership” and repeated his gratitude for past American support – again responding to criticism from the American commander in chief and his team that he is not showing enough gratitude.
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He also said Kyiv was ready to sign a key minerals deal with Washington – something else Mr Trump is seeking.
This message appears to be an attempt by Mr Zelenskyy to steer his relationship with Mr Trump back on track and to map out his idea for an end to the war – a conflict that Ukraine did not seek but which was brought to its land by Russia’s invading forces.
Image: Donald Trump and Volodymyr Zelenskyy at the White House on Friday, before their Oval Office bust-up. Pic: AP
Will Mr Zelenskyy’s expression of regret and clear wish to end the war provide enough of an off-ramp for Mr Trump to defuse the row and – for the sake of Ukraine’s ability to defend itself – switch back on the flow of military assistance to the country?
Another major factor, of course, is how Vladimir Putin reacts and whether he could countenance a limited ceasefire in a war that he started and – unlike Mr Zelenskyy – appears to have no genuine desire to halt.
Donald Trump’s 25% tariffs on goods from Mexico and Canada have come into effect, as has an additional 10% on Chinese products, bringing the total import tax to 20%.
The US president confirmed the tariffs in a speech at the White House – and his announcement sent US and European stocks down sharply.
The tariffs will be felt heavily by US companies which have factories in Canada and Mexico, such as carmakers.
Mr Trump said: “They’re going to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.”
There’s “no room left” for a deal that would see the tariffs shelved if fentanyl flowing into the US is curbed by its neighbours, he added.
Mexico and Canada face tariffs of 25%, with 10% for Canadian energy, the Trump administration confirmed.
And tariffs on Chinese imports have doubled, raising them from 10% to 20%.
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Canada announced it would retaliate immediately, imposing 25% tariffs on US imports worth C$30bn (£16.3bn). It added the tariffs would be extended in 21 days to cover more US goods entering the country if the US did not lift its sanctions against Canada.
China also vowed to retaliate and reiterated its stance that the Trump administration was trying to “shift the blame” and “bully” Beijing over fentanyl flows.
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2:45
What is America’s trade position?
Mr Trump’s speech stoked fears of a trade war in North America, prompting a financial market sell-off.
Stock market indexes the Dow Jones Industrial Average and the Nasdaq Composite fell by 1.48% and 2.64% respectively on Monday.
The share prices for automobile companies including General Motors, which has significant truck production in Mexico, Automaker and Ford also fell.
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Consumers in the US could see price hikes within days, an expert has said.
Gustavo Flores-Macias, a public policy professor at Cornell University, New York, said “the automobile sector, in particular, is likely to see considerable negative consequences”.
This is due to supply chains that “crisscross the three countries in the manufacturing process” and ” because of the expected increase in the price of vehicles, which can dampen demand,” he added.
A truck has collided with a bus in southern Bolivia, killing at least 31 people, according to police – just two days after a deadly crash claimed at least 37 lives.
Officers said the bus rolled some 500m (1,640ft) down a ravine after the collision on Monday, which took place on the highway between Oruro, in the Bolivian Altiplano, and the highland mining city of Potosi.
The driver of the truck has been arrested, while the cause of the accident is under investigation.
Police spokesperson Limbert Choque said men and women were among the dead, and 22 people suffered injuries.
Image: Rescue teams operating at the site of the crash. Pic: Bolivia’s attorney general/Reuters
Bolivia’s President, Luis Arce, expressed condolences for the victims on social media: “This unfortunate event must be investigated to establish responsibilities,” he said in a post on Facebook.
“We send our most sincere condolences to the bereaved families, wishing them the necessary strength to face these difficult times.”
Image: The crash happened between Oruro and Potosi
On Saturday morning, a crash between two buses killed more than three dozen people in the same region.
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It happened between Colchani and the city of Uyuni, a major tourist attraction and the world’s largest salt flat.
Image: People stand near the wreckage of one of the two buses involved in a crash on Saturday. Pic: Reuters/Potosi Departmental Command
Coincidentally, one of the buses was heading to Oruro, where one of the most important carnival celebrations in Latin America is currently taking place.
More than 30 people were also killed after a bus crash on 17 February.
In that crash, police said the driver appeared to have lost control of the vehicle, causing it to drop more than 800m (2,600ft) off a precipice in the southwestern area of Yocalla.
Bolivia’s mountainous, undermaintained and poorly supervised roads are some of the deadliest in the world, claiming an average 1,400 fatalities every year.