After Kwasi Kwarteng’s disastrous mini-budget, there is no magic cure

Published

3 years ago

November 14, 2022

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The last time a chancellor of the exchequer appeared on the Sunday morning political shows he helped kick the economy off a cliff-edge.

Seven long weeks ago, Kwasi Kwarteng was still revelling in the aftermath of his not-so-mini budget and its promise of unfunded tax cuts, so much so he promised more to come.

It was that intervention, as much as the cavalier non-budget, that helped markets make up their mind about the UK’s direction under Mr Kwarteng and his mayfly prime minister Liz Truss.

Within hours the pound had slumped and the following day the cost of borrowing soared, a sudden and shocking loss of confidence with long-term consequences for government, business and mortgage holders that is still being felt.

This morning, Mr Kwarteng’s successor used the Sunday platform to try to reassure us, and as importantly the markets, that he is going to clean up the mess.

Jeremy Hunt is only six weeks into the job but he spent as many years as health secretary, and his manner was that of a medic with grave news.

The message from Dr Hunt is that while the patient is very ill, there is a cure, but it’s going to hurt.

“We are going to have to increase taxes and cut public spending to show that we are a country that can pay our way,” he told Sky News’ Sophy Ridge on Sunday programme.

“I’m afraid we are all going to have to pay more taxes.”

These are not words Conservative chancellors go into the job dreaming of uttering, but they are based on a diagnosis of the economy Mr Hunt shares with Rishi Sunak, not long out of the job himself and by some accounts still trying to do it from No 10.

Mr Kwarteng’s tax cuts left a £60bn gap – a “black hole” in political journalese – in government plans to have borrowing as a share of GDP falling over the next three years.

That calculation matters because it demonstrates that the government has a plan to cover its own costs, rather than endlessly borrow to pay for essential services. That gives confidence to investors which in turn makes it cheaper to borrow in the first place.

It should be said that the size and scope of the black hole is itself a political choice rather than economic truism. Governments set the fiscal rules for themselves and can change them any time they like.

Mr Kwarteng’s problem was he presented a plan that did not add up under the rules he said he was sticking to. The Hunt-Sunak challenge is that economic credibility can only be regained by demonstrating a willingness to fill that gap.

That means announcing plans that outwardly look like they will hammer earners from all income brackets as well as public services and the people that work in them.

If that is the economic reasoning behind Mr Hunt’s relentlessly austere messaging since he took the job, how and if he achieves it is political.

Having promised in the 2019 Conservative manifesto not to raise any of the main taxes, he is instead likely to freeze the thresholds above which they are paid, meaning over time more people will pay more tax.

(That’s “stealth taxes” in the journalese, “fiscal drag” in economic jargon, and “less money” in the real world.)

As for the spending cuts they are less clear, and may remain so after Thursday’s autumn statement.

Mr Hunt appeared to again commit to increasing pensions in line with inflation under the “triple-lock” but he was explicit that striking nurses will not get an inflation-proof pay deal.

Beyond that we wait to see how much detail is offered and how much it means even if it is. Mr Hunt will be setting economic expectations for the next five years, with a forecast for the same period from the Office for Budget Responsibility that investors will read as closely as the autumn statement itself.

But three of those years lie beyond the current parliament, meaning a new government, or as we have seen even a new prime minister, can change course should they choose.

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So the measures we will hear next week are politically non-binding. Some may even be intended as a trap for Labour, an attempt to commit the opposition to unpopular decisions in advance.

There is little doubt however that the economic peril is real. Inflation is above 10%, the energy crisis continues, and we are in the foothills of a recession that will see interest rates rise further.

And there is no magic cure.

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At least 12 killed after suicide bombing in Pakistan

Published

8 hours ago

November 11, 2025

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At least 12 killed after suicide bombing in Pakistan

At least 12 people have been killed in a suicide bombing outside the gates of a court in Pakistan’s capital of Islamabad, the country’s interior minister has said.

At least 27 other people were also wounded after the bomber detonated his explosives next to a police car.

Interior minister Mohsin Naqvi said the attacker tried to “enter the court premises but, failing to do so, targeted a police vehicle”.

Mr Naqvi added that authorities are “looking into all aspects” of the attack.

No group immediately claimed responsibility for the explosion, but authorities have recently struggled with a resurgent Pakistani Taliban.

The explosion, which was heard from miles away, occurred at a busy time of day when the area outside the court is typically crowded with hundreds of visitors attending hearings.

More than a dozen badly wounded people were screaming for help as ambulances rushed to the scene.

“People started running in all directions,” said Mohammad Afzal, who claimed he was at the court when he heard the blast.

Pakistani security forces earlier said they foiled an attempt by militants to take cadets hostage at an army-run college overnight, when a suicide car bomber and five other attackers targeted the facility in a northwestern province.

The authorities blamed the Pakistani Taliban, which is separate from but allied with Afghanistan’s Taliban, but the group denied involvement in that attack on Monday evening.

The assault began when a bomber attempted to storm the cadet college in Wana, a city in Khyber Pakhtunkhwa province near the Afghan border.

The area had, until recent years, served as a base for the Pakistani Taliban, al Qaeda and other foreign militants.

According to local police chief Alamgir Mahsud, two of the militants were quickly killed by troops while three others managed to enter the compound before being cornered in an administrative block.

The army’s commandos were among the forces conducting a clearance operation, and an intermittent exchange of fire went on into Tuesday, Mr Mahsud said.

Pakistani Prime Minister Shehbaz Sharif denounced both attacks and said those responsible must be brought to justice swiftly.

“We will ensure the perpetrators are apprehended and held accountable,” he said.

Mr Sharif described attacks on unarmed civilians as “reprehensible”, adding: “We will not allow the blood of innocent Pakistanis to go to waste.”

World

At least eight people killed in car explosion in New Delhi, police say

Published

1 day ago

November 10, 2025

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At least eight people killed in car explosion in New Delhi, police say

At least eight people have been killed and at least 19 others injured after a car exploded in New Delhi, say Indian police.

The blast, which triggered a fire that damaged several vehicles parked nearby, happened at the gates of the metro station at the Red Fort, a former Mughal palace and a busy tourist spot.

New Delhi’s international airport, metro stations and government buildings were put on a high security alert after the explosion, the government said. The cause of the explosion is being investigated.

The city’s police commissioner, Satish Golcha, said it happened a few minutes before 7pm.

“A slow-moving vehicle stopped at a red light. An explosion happened in that vehicle, and due to the explosion,
nearby vehicles were also damaged,” he told reporters.

One resident, who did not give a name, told NDTV: “We heard a big sound, our windows shook.”

Sanjay Tyagi, a Delhi police spokesman, said they were still investigating the cause, while the fire service reported that at least six vehicles and three autorickshaws had caught fire.

Images show the burnt-out remnants of several cars and forensic officers at the scene.

Home minister Amit Shah told local media that a Hyundai i20 car exploded near a traffic signal close to the Red Fort. He said CCTV footage from cameras in the area will form part of the investigation.

“We are exploring all possibilities and will conduct a thorough investigation, taking all possibilities into account,” Shah said. “All options will be investigated immediately, and we will present the results to the public.”

The investigation is being conducted by the National Investigation Agency, India’s federal terror investigating agency, and other agencies.

India’s Prime Minister Narendra Modi offered his condolences to those who have lost their loved ones in the blast.

He posted on X: “May the injured recover at the earliest. Those affected are being assisted by authorities.

“Reviewed the situation with Home Minister Amit Shah Ji and other officials.”

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Madagascar’s new president Michael Randrianirina denies coup after taking office following Gen Z uprising

Published

2 days ago

November 10, 2025

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Madagascar's new president Michael Randrianirina denies coup after taking office following Gen Z uprising

A Gen Z uprising has pushed Madagascar’s former leader Andry Rajoelina, not only out of office but out of the country.

In his place is Colonel Michael Randrianirina, who was sworn in as president of the island nation last month after his military unit joined the protesters.

Sky News’ Africa correspondent Yousra Elbagir sits down with the new leader.

The first question I ask Colonel Randrianirina, as he sits in an ornate mahogany chair in his military fatigues, is how it feels to be in the palace as president.

He sighs and sinks deeper into the chair. He looks humbled and struggles to find the words.

“How do I put it?” he says. “I am happy and it is also a great honour to have come to this palace to be able to help and support the Malagasy people in deep poverty.”

As commander of an elite non-combatant military unit, Corps d’Administration des Personnels et des Services de l’Armée de Terre (CAPSAT), the colonel rode a wave of Gen Z protests to the palace. On 11 October, he shared a video on social media instructing officers to disobey shoot-to-kill orders and support the movement.

At least 22 protesters have been killed and more than 100 injured after denouncing the power cuts and water shortages that have come to signify government corruption in the impoverished island nation.

Why did he share the pivotal video?

He says: “I am a military officer but I am also part of the people and I will return to the people. When you feel sorry for what the people are suffering from… they have been poor for so long and wealth has been looted – but you still shoot them and kill them. That was not why I entered the military of Madagascar, to kill people.”

Soon after his speech, soldiers allowed the young protesters rejecting then president Andry Rajoelina to occupy Place du 13 Mai Square on Independence Avenue in the heart of Antananarivo, the island nation’s capital.

Colonel Randrianirina paraded through a crowd and addressed them from the hatch of an armoured vehicle. “The president of the nation has to leave… If that does not happen,” he threatened, “we will see”.

After Mr Rajoelina fled Madagascar on 13 October, the National Assembly voted to impeach him for “desertion of duty”. Three days later, Colonel Randrianirina stood in fatigues in front of the palace. With officers by his side, he announced their seizure of power and the dissolution of the constitution and all government institutions outside of the National Assembly.

Shortly after, the African Union suspended Madagascar‘s membership on account of the military takeover.

In the palace as president, he insists that this is not a military coup.

“It is support for the people and the country and for us to not be prone to civil war – between the people – between the military officers and your needs, so you adjust helping to support the people to avoid this.

“We were not conducting any coup at all, it was the president [Rajoelina] himself who decided to leave the country.”

United Nations secretary-general Antonio Guterres condemned “the unconstitutional change of government in Madagascar” and called for “the return to constitutional order and the rule of law,” when reports of a military takeover first circulated on 16 October. The day we met the new president, he had just been congratulated by France’s President Emmanuel Macron.

Colonel Randrianirina is promising elections in 18 to 24 months, after what he calls a “refoundation and recovery” of the country – a process he admits might take a long time.

Observers are concerned that elections will be postponed and the new president will become another strongman, but Gen Z organisers are holding on to faith that this hard-earned outcome is worth it.

‘We were living under a dictatorship’

I asked a group of five young organisers if they have concerns that the president will become another dictator, just like previous Malagasy rulers who ascended to power off the back of a popular uprising. Ousted president Mr Rajoelina came into power after protests in 2009 that also ended in a CAPSAT-supported coup.

University student Ratsirarisoa Nomena told us: “The new president is not a dictator… he is listening to the people and he is validated by the people.

“We as students also validated him – he is not a dictator because the motivation of the army is from the people for the people.

“We were living under dictatorship. There was no freedom of expression and it was very hard to fight for that in Madagascar. We had to face being injured and losing our lives and the lives of our fellow students. Malagasy citizens who fought with us lost their lives too. This is what we went through – to me, we are halfway to victory.”

Their president is aware of their support and does not credit Gen Z alone for his place in the palace.

“Generation Z are part of the reason [I am here] but the full Malagasy people really wanted change at the time we are speaking,” Mr Randrianirina told me. “The Malagasy people have been suffering for so long and deprived of fundamental rights – no access to water supply and electricity, facing insecurity.

“Malagasy people, including the Gen Z, government officials and trade unions really wanted change so it is the whole Malagasy people that supported me to this point.”

Across Africa, young people are showing their disapproval of the old guard.

Gen Z protesters have made their mark in Tanzania, Kenya, Cameroon, Morocco, Mozambique and Nigeria in 2025 alone – denouncing disputed elections and the corruption impacting their futures.

Is the Gen Z coup of Madagascar a warning for old leaders on a young continent?

“I don’t know what to say about the other countries, but I know my own country,” Mr Randrianirina says.

“If tomorrow the people of Madagascar hate me, then I will leave this palace.”