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Jeremy Hunt will promise to weather an economic “storm” by raising taxes, cutting public spending and scaling back energy support to fill a £54bn black hole in the nation’s finances.

The chancellor will insist to MPs on Thursday that his autumn statement puts the UK on a “balanced path to stability” as he tackles the “enemy” of inflation, which has soared to a 41-year high.

But the measures could put him on a collision course with Tory MPs on the right of his party who are already voicing anger about the prospect of some of the plans.

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An 11th hour petition from two dozen Tory MPs, led by Jonathan Gullis, has been sent to the chancellor asking him not to hike fuel duty in the statement.

The package will be in the form of £30bn of spending cuts and £24bn in tax rises over the next five years – a stark contrast to Kwasi Kwarteng’s unfunded tax-slashing spending splurge two months ago.

Among the measures, annual energy bills for a typical household will stay capped at £2,500, but this will rise to £3,000 in April 2023, when support will become more targeted with additional payments for low-income households and pensioners, Sky’s political editor Beth Rigby understands.

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On tax rises, those with the broadest shoulders will bear most of the burden, but there will be pain all around.

The chancellor is expected to lower the threshold for paying the highest rate of tax to £125,000 – down from the existing £150,000.

This is a marked difference to Liz Truss’s plans to scrap the 45p rate altogether, giving the highest earners an average tax cut of £10,000.

Analysis says lowering the threshold will bring an extra 246,000 people into the highest bracket at a cost to them of around £580 each a year, which in turn would raise the Treasury £1.3bn a year.

Mr Hunt is also expected to announce a freeze on personal income tax and national insurance tax thresholds lasting until 2028.

Sometimes referred to as a “stealth tax”, freezing tax thresholds drags more earners into paying higher rates of tax.

Mr Hunt has already hinted he will make it easier for local authorities to increase council tax, with reports suggesting the threshold for raising bills without a referendum could increase from 2.99% to 5%.

There is also expected to be a big increase in the windfall tax on energy companies, and a new tax on electricity generators.

Labour has previously said a windfall tax extension could raise an additional £50bn, and criticised what it calls the “loophole” that allows gas and oil firms to offset their tax liability if they invest back into the UK.

On spending cuts, departments are expected to be told to live within an envelope of the March Spending Review, when inflation at was 3%.

With inflation now at 11.1%, that amounts to a real-terms cut across the board, meaning tough choices will be necessary.

However, there will be some exceptions, with the NHS expected to get more money.

There is also likely to be some protection for the schools budget, Sky’s deputy political editor Sam Coates understands.

“There will inevitably be some good news after the weeks of doom-laden warnings,” he said.

Mr Sunak and Mr Hunt have spent weeks warning that tough choices lay ahead.

However, the prime minister told Sky News on Tuesday that “fairness and compassion” will be at the heart of his decisions.

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Rishi Sunak refuses to apologise for the economic turmoil Liz Truss’s short-lived government caused for the UK

It is understood the chancellor will keep the triple lock for pensioners in his autumn statement – honouring a manifesto commitment.

He is also expected to uprate benefits in line with inflation, rather than earnings (a controversial move that would have saved £5bn).

The government has not confirmed what measures will be in the statement, but there has been a constant stream of measures reportedly being considered.

This “pitch rolling” helps markets get an idea of what is coming down the road and avoids spooking traders.

When Ms Truss and Mr Kwarteng made several surprise announcements in their mini-budget in September, it contributed to the financial chaos which saw the pound crash and the Bank of England forced to intervene to prevent pension funds from collapsing.

Read More:
How could PM Rishi Sunak and Chancellor Jeremy Hunt reduce ‘financial black hole’?

Analysis released on Monday by the independent Resolution Foundation think tank found the mistakes they made cost the UK £30bn, doubling the sum the Treasury says will have to be raised.

Mr Hunt will say that his “difficult decisions” are necessary to keep mortgage rates low and tackle the rocketing energy and food prices intensifying the cost of living crisis.

“Families across Britain make sacrifices every day to live within their means, and so too must governments because the United Kingdom will always pay its way,” he is expected to say.

But Tories on the right of the Conservative Party are already voicing anger about the prospect of raising taxes.

Among the Tory critics, former cabinet minister Esther McVey has warned she will not support tax rises without the scrapping of the “unnecessary vanity project” of HS2.

Former business secretary Jacob Rees-Mogg told ITV’s Peston he would vote for the budget so as to not bring the government down, but warned he opposes tax increases, which he believes “risks making a recession worse”.

Labour has also warned that Britain is “falling behind on the global stage”.

Shadow chancellor Rachel Reeves said: “The country is being held back by 12 years of Tory economic failure and wasted opportunities and working people are paying the price.

“What Britain needs in the autumn statement are fairer choices for working people, and a proper plan for growth.”

And Sharon Graham, the general secretary of the Unite union, warned Mr Hunt “workers are ready to take a stand”.

“He can choose to inject investment into the NHS and deliver a fair pay deal – or he can leave it as it is today, in danger of fatal collapse,” she said.

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IDF admits mistakenly identifying Gaza aid workers as threat – after video of attack showed ambulances were marked

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IDF admits mistakenly identifying Gaza aid workers as threat - after video of attack showed ambulances were marked

The IDF has admitted to mistakenly identifying a convoy of aid workers as a threat – following the emergence of a video which proved their ambulances were clearly marked when Israeli troops opened fire on them.

The bodies of 15 aid workers – including eight medics working for the Palestine Red Crescent Society (PRCS) – were found in a “mass grave” after the incident, according to the head of the UN Office for Coordination of Humanitarian Affairs Jonathan Whittall.

The Israeli military originally claimed an investigation found the vehicles did not have any headlights or emergency signals and were therefore targeted as they looked “suspicious”.

But video footage obtained by the PRCS, and verified by Sky News, showed the ambulances and a fire vehicle clearly marked with flashing red lights.

In a briefing from the IDF, they said the ambulances arrived in the Tel Sultan neighbourhood in Rafah shortly after a Hamas police vehicle drove through.

Palestinians mourn medics, who came under Israeli fire while on a rescue mission, after their bodies were recovered, according to the Red Crescent, at Nasser hospital in Khan Younis in the southern Gaza Strip March 31, 2025. REUTERS/Hatem Khaled/File Photo
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Palestinians mourning the medics after their bodies were recovered. Pic: Reuters

An IDF surveillance aircraft was watching the movement of the ambulances and notified troops on the ground. The IDF said it will not be releasing that footage.

When the ambulances arrived, the soldiers opened fire, thinking the medics were a threat, according to the IDF.

The soldiers were surprised by the convoy stopping on the road and several people getting out quickly and running, the IDF claimed, adding the soldiers were unaware the suspects were in fact unarmed medics.

An Israeli military official would not say how far away troops were when they fired on the vehicles.

The IDF acknowledged that its statement claiming that the ambulances had their lights off was incorrect, and was based on the testimony from the soldiers in the incident.

The newly emerged video footage showed that the ambulances were clearly identifiable and had their lights on, the IDF said.

The IDF added that there will be a re-investigation to look into this discrepancy.

The clip is filmed through a vehicle windscreen - with three red light vehicles visible in front
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The clip is filmed through a vehicle windscreen – with three red light vehicles visible in front

Addressing the fact the aid workers’ bodies were buried in a mass grave, the IDF said in its briefing this is an approved and regular practice to prevent wild dogs and other animals from eating the corpses.

The IDF could not explain why the ambulances were also buried.

The IDF said six of the 15 people killed were linked to Hamas, but revealed no detail to support the claim.

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Bodies of aid workers found in Gaza

The newly emerged footage of the incident was discovered on a phone belonging to one of the workers who was killed, PRCS president Dr Younis Al Khatib said.

“His phone was found with his body and he recorded the whole event,” he said. “His last words before being shot, ‘Forgive me, mom. I just wanted to help people. I wanted to save lives’.”

Sky News used an aftermath video and satellite imagery to verify the location and timing of the newly emerged footage of the incident.

More from Sky News:
Israeli troops expand Gaza ‘security zone’
What happened to the ceasefire?

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Aid worker attacks increasing

It was filmed on 23 March north of Rafah and shows a convoy of marked ambulances and a fire-fighting vehicle travelling south along a road towards the city centre. All the vehicles visible in the convoy have their flashing lights on.

The footage was filmed early in the morning, with a satellite image seen by Sky News taken at 9.48am local time on the same day showing a group of vehicles bunched together off the road.

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Volodymyr Zelenskyy takes swipe at US over ‘weak’ comment on Russian attack – as Ukrainian drones strike factory

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Volodymyr Zelenskyy takes swipe at US over 'weak' comment on Russian attack - as Ukrainian drones strike factory

Ukrainian President Volodymyr Zelenskyy has hit out at the US over its “weak” response to lethal Russian attacks on his hometown on Friday.

President Zelenskyy posted a lengthy and emotional statement on X about Russia’s strikes on Kryvyi Rih, which killed 19 people.

Meanwhile Ukrainian drones hit an explosives factory in Russia’s Samara region in an overnight strike, a member of Ukraine’s SBU security service told Reuters.

In his post, President Zelenskyy accused the United States of being “afraid” to name-check Russia in its comment on the attack.

“Unfortunately, the reaction of the American Embassy is unpleasantly surprising: such a strong country, such a strong people – and such a weak reaction,” he wrote on X.

“They are even afraid to say the word “Russian” when talking about the missile that killed children.”

America’s ambassador to Ukraine Bridget Brink had written on X: “Horrified that tonight a ballistic missile struck near a playground and restaurant in Kryvyi Rih.

“More than 50 people injured and 16 killed, including 6 children. This is why the war must end.”

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Strike on Zelenskyy’s home city

President Zelenskyy went on in his post to say: “Yes, the war must end. But in order to end it, we must not be afraid to call a spade a spade.

“We must not be afraid to put pressure on the only one who continues this war and ignores all the world’s proposals to end it. We must put pressure on Russia, which chooses to kill children instead of a ceasefire.”

Grandmother ‘burned to death in her home’

Oleksandr Vilkul, head of the city’s defense council, said the missile attack, followed by a drone attack, had killed 19 people, including nine children.

“The Iskander-M missile strike with cluster munitions at the children’s playground in the residential area, to make the shrapnel fly further apart, killed 18 people.

“One grandmother was burnt to death in her house after Shahed’s direct hit.”

Russia’s defence ministry said it had struck a military gathering in a restaurant – an assertion rebutted by the Ukrainian military as misinformation.

“The missile hit right on the street – around ordinary houses, a playground, shops, a restaurant,” President Zelenskyy wrote.

Mr Zelenskyy also detailed the child victims of the attack including “Konstantin, who will be 16 forever” and “Arina, who will also be 7 forever”.

The UK’s chief of the defence staff Sir Tony Radakin said he had met the Ukrainian leader on Friday, along with French armed forces leader General Thierry Burkhard.

“Britain and France are coming together & Europe is stepping up in a way that is real & substantial, with 200 planners from 30 nations working to strengthen Ukraine’s long term security,” Sir Tony wrote.

The UK and France have spearheaded a so-called “coalition of the willing” – a group of countries that have pledged to help Ukraine secure if a ceasefire deal is reached with Russia.

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Global markets have given Trump a clear no-confidence vote – and his fickleness is making the problem worse

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Global markets have given Trump a clear no-confidence vote - and his fickleness is making the problem worse

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.

Tariffs latest: FTSE 100 suffers biggest daily drop since COVID

Financial investors had been gradually re-calibrating their expectations of Donald Trump over the past few months.

Hopes that his actions may not match his rhetoric were dashed on Wednesday as he imposed sweeping tariffs on the US’ trading partners, ratcheting up protectionism to a level not seen in more than a century.

FILE PHOTO: U.S. President Donald Trump holds a "Foreign Trade Barriers" document as he delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS/Carlos Barria/File Photo
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On Wednesday, Donald Trump announced global tariffs, ratcheting up protectionism. Pic: Reuters

04 April 2025, Hesse, Frankfurt/Main: Stock exchange traders watch their monitors on the trading floor of the Frankfurt Stock Exchange while the display board with the Dax curve shows falling prices. US President Trump had issued a huge tariff package against trading partners around the world. The European Union and China have already announced countermeasures. Photo by: Arne Dedert/picture-alliance/dpa/AP Images
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Traders at the Frankfurt stock exchange watched the DAX plummet on Friday. Pic: Picture-alliance/dpa/AP

Markets were always going to respond to that but they are also battling with another problem: the lack of certainty when it comes to Trump.

More on Donald Trump

He is a capricious figure and we can only guess his next move. Will he row back? How far is he willing to negotiate and offer concessions?

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These are massive unknowns, which are piled on to uncertainty about how countries will respond.

China has already retaliated and Europe has indicated it will go further.

Aerial view of a ro-ro terminal for vehicle shipment in Yantai in eastern China's Shandong province, Thursday, April 3, 2025. (Chinatopix Via AP) CHINA OUT
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Vehicles destined for export, like these in Yantai in eastern China, face massive US tariffs. Pic: Chinatopix/AP

Cargo containers line a shipping terminal at the Port of Oakland on Thursday, April 3, 2025, in Oakland, Calif. (AP Photo/Noah Berger)
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Container ports like Oakland in California might expect activity to fall. Pic: AP

That will compound the problems for the global economy and undoubtedly send shivers through the markets.

Much is yet to be determined, but if there’s one thing markets hate, it’s uncertainty.

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