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The UK’s economic outlook will be “challenging” for the next two years, Jeremy Hunt says.

The chancellor presented his autumn statement to parliament on Thursday, littered with stealth taxes and curbs on government spending amounting to £55bn in an attempt to plug the black hole in the public finances.

But the independent Office for Budget Responsibility (OBR) warned the disposable incomes of UK households would fall by 7.1% over the next two years – the lowest level since records began in 1956/7, and taking incomes down to 2013 levels.

Politics live: Tax burden reaches highest level since WWII

Speaking to Sky News, Mr Hunt said it was “a difficult time for everyone” but tax hikes and spending cuts are needed to get the economy “on an even keel”.

“Over the next two years it is going to be challenging,” he said.

“But I think people want a government that is taking difficult decisions, has a plan that will bring down inflation, stop those big rises in the cost of energy bills and the weekly shop, and at the same time is taking measures to get through this difficult period.”

More on Autumn Statement 2022

The chancellor insisted that his autumn statement is a “very Conservative package” following criticism from some Tory MPs.

“The Office for Budgetary Responsibility said yesterday that what we’re doing is actually recession shallow, it’s saving jobs,” he said.

“But what I would say to my Conservative colleagues is there is nothing Conservative about spending money that you haven’t got, there is nothing Conservative about not tackling inflation, there is nothing Conservative about ducking difficult decisions that put the economy on track.

“And we’ve done all of those things and that is why this is a very Conservative package to make sure we sort out the economy.

“None of this is easy, but it’s the right thing to do.”

Former business secretary Jacob Rees-Mogg accused the chancellor of taking the “easy option” in Thursday’s autumn statement rather than bearing down harder on public spending.

He said the country needed lower taxes to drive up growth.

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Hunt questioned over autumn statement

Probed on how it can be fair that pensions will go up by inflation when public sector workers will not see pay increase alongside prices, Mr Hunt said the elderly do not have the ability to work more to improve their take home pay.

Well, I think the truth is, first of all, pensioners have retired. They don’t have the ability to work more or work longer hours in the way that people of working age do,” the chancellor said.

“But I think it is wrong to say that only the poorest pensioners are feeling the squeeze at the moment.

“I think this is something that’s affecting everyone and I think it’s right.

“Having made that promise to pensioners in our manifesto that we would have this triple lock, I think this is exactly the kind of tough time that people want it to kick in.

“And so that’s why I think it’s the right thing to do.”

The chancellor added: “We’re not pretending that this isn’t going to be a difficult time for everyone. But what we have is a plan.”

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’12 weeks of Conservative chaos’ – Rachel Reeves

In yesterday’s autumn statement, Mr Hunt announced economic policies which the government hopes will help to rebalance the nation’s finances after the economic turmoil which followed former chancellor Kwasi Kwarteng’s mini-budget.

These included:

• Income tax thresholds being frozen for two more years until April 2028

• Top level of income tax now being paid on earnings over £125,140 instead of £150,000

• Pensions triple lock will remain – with pensioners to see a 10.1% increase in weekly payments in line with inflation

• Benefits to also rise in line with inflation – by 10.1%

• Energy cap to rise from £3,000 a year to £2,500 a year beyond April

• UK minimum wage to rise from £9.50 to £10.42 an hour for those aged over 23

• Windfall tax on oil giants’ profits to rise from 25% to 35% and be extended by two years until March 2028

• Additional cost of living payments of £900 for those on benefits and £300 for pensioners

• Spending on public services in England to rise slower than planned

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As a result of Mr Hunt’s announcements, the tax burden in the UK will also now be at its highest since the Second World War, and there are stark warnings about increased bills and higher unemployment as the recession takes hold – as well as predictions the economy will still shrink 1.4% in 2023.

But most of the difficult decisions on spending have been postponed until after the next general election, due in 2024.

Treasury analysis suggests around 55% of households will be worse off as a result of the measures.

Read more: Jeremy Hunt’s autumn statement had all the hallmarks of a Labour budget

Labour has blamed “12 weeks of Conservative chaos” and “12 years of Conservative economic failure” for the bleak outlook.

Shadow chancellor Rachel Reeves accused the government of forcing the UK economy into a “doom loop where low growth leads to higher taxes, lower investments and squeezed wages, with the running down of public services”.

Ms Reeves told Sky News she is “really worried about what’s going to happen to people’s living standards next year from April” and said a Labour government would have done more “to alleviate some of that pressure on the ordinary working person”.

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What does the autumn statement mean?

As Mr Hunt took part in the broadcast round Friday morning, economic think-tank the Resolution Foundation published analysis suggesting his autumn statement’s tax rises would deliver a 3.7% income hit to typical households.

The foundation said the statement had piled further pressure on the “squeezed middle” and that the focus on “stealthy” tax threshold freezes to raise revenue would extend far beyond high earners.

The think tank also found that the budget would reverse much of the government’s levelling up agenda.

“The £15 billion of cuts to capital investment announced yesterday will undo 80% of the remaining increases in public investment announced by previous chancellor Rishi Sunak, which underpinned the levelling-up agenda,” it said.

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‘The future is in our hands’ scientists say, as 2024 becomes first year to pass 1.5C global warming threshold

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'The future is in our hands' scientists say, as 2024 becomes first year to pass 1.5C global warming threshold

Last year was the warmest on record, the first to breach a symbolic threshold, and brought with it deadly impacts like flooding and drought, scientists have said.

Two new datasets found 2024 was the first calendar year when average global temperatures exceeded 1.5C above pre-industrial levels – before humans started burning fossil fuels at scale.

The record heat has not only has real-world implications, as it contributed to deadly flooding in Spain and vicious drought in places like Zambia in southern Africa.

It is also highly symbolic.

Countries agreed in the landmark Paris Agreement to limit warming ideally to 1.5C, because after that the impacts would be much more dangerous.

The news arrives as California battles “hell on earth” wildfires, suspected to have been exacerbated by climate change.

And it comes as experts warn support for the Paris goals is “more fragile than ever” – with Donald Trump and the Argentinian president poised to row back on climate action.

More on Climate Change

What caused 2024 record heat – and is it here to stay?

Friends of the Earth called today’s findings from both the EU’s Copernicus Climate Change service and the Met Office “deeply disturbing”.

The “primary driver” of heat in the last two years was climate change from human activity, but the temporary El Nino weather phenomenon also contributed, they said.

The breach in 2024 does not mean the world has forever passed 1.5C of warming – as that would only be declared after several years of doing so, and warming may slightly ease this year as El Nino has faded.

But the world is “teetering on the edge” of doing so, Copernicus said.

Prof Piers Forster, chair of the UK’s Climate Change Committee, called it a “foretaste of life at 1.5C”.

Dr Gabriel Pollen, Zambia’s national coordinator for disasters, said “no area of life and the economy is untouched” by the country’s worst drought in more than 100 years.

Six million people face starvation, critical hydropower has plummeted, blackouts are frequent, industry is “decimated”, and growth has halved, he said.

Paris goal ‘not obsolete’

Scientists were at pains to point out it is not too late to curb worse climate change, urging leaders to maintain and step up climate action.

Professor Forster said temporarily breaching 1.5C “does not mean the goal is obsolete”, but that we should “double down” on slashing greenhouse gas emissions and on adapting to a hotter world.

The Met Office said “every fraction of a degree” still makes a difference to the severity of extreme weather.

Firefighters battle the Palisades fire as it burns during a windstorm on the west side of Los Angeles.
Pic: Reuters
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The California fires were whipped up by strong, dry winds and likely worsened by climate change. Pic: Reuters

Copernicus director Carlo Buontempo added: “The future is in our hands: swift and decisive action can still alter the trajectory of our future climate”.

Climate action is ‘economic opportunity’

Copernicus found that global temperatures in 2024 averaged 15.10°C, the hottest in records going back to 1850, making it 1.60°C above the pre-industrial level during 1850-1900.

The Met Office’s data found 2024 was 1.53C above pre-industrial levels.

The figures are global averages, which smooth out extremes from around the world into one number. That is why it still might have felt cold in some parts of the world last year.

Greenpeace campaigner Philip Evans said as “the world’s most powerful climate denier” Donald Trump returns to the White House, others must “take up the mantle of global climate leadership”.

The UK’s climate minister Kerry McCarthy said the UK has been working with other countries to cut global emissions, as well as greening the economy at home.

“Not only is this crucial for our planet, it is the economic opportunity of the 21st century… tackling the climate crisis while creating new jobs, delivering energy security and attracting new investment into the UK.”

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Picture shows baby girl moments after birth on packed migrant dinghy heading for Canary Islands

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Picture shows baby girl moments after birth on packed migrant dinghy heading for Canary Islands

Photographs have captured the moments after a baby girl was born on a packed migrant dinghy heading for the Canary Islands.

The small boat was carrying 60 people and had embarked from Tan-Tan – a Moroccan province 135 nautical miles (250km) away.

One image shows the baby lying on her mother’s lap as other passengers help the pair.

The boat’s passengers – a total of 60 people, including 14 women and four children – were rescued by a Spanish coastguard ship.

Coastguard captain Domingo Trujillo said: “The baby was crying, which indicated to us that it was alive and there were no problems, and we asked the woman’s permission to undress her and clean her.

“The umbilical cord had already been cut by one of her fellow passengers. The only thing we did was to check the child, give her to her mother and wrap them up for the trip.”

Pic: Salvmento Maritimo/Reuters

Spanish coast guards wearing white suits work on a rescue operation as they tow a rubber boat carrying migrants, including a newborn baby, off the island off the Canary Island of Lanzarote, in Spain, in this handout picture obtained on January 8, 2025. SALVAMENTO MARITIMO/Handout via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. NO RESALES. NO ARCHIVES. MANDATORY CREDIT
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Coastguards rescued all 60 people aboard the boat. Pic: Salvmento Maritimo/Reuters


The mother and baby were taken for medical checks and treated with antibiotics, medical authorities said.

Dr Maria Sabalich, an emergency coordinator of the Molina Orosa University Hospital in Lanzarote, said: “They are still in the hospital, but they are doing well.”

When they are discharged from hospital, the pair will be moved to a humanitarian centre for migrants, a government official said.

They will then most likely be relocated to a reception centre for mothers and children on another of the Canary Islands, they added.

Thousands of migrants board boats attempting to make the perilous journey from the African coast to the Spanish Canaries each year.

Read more from Sky News:
Why have California fires spread so quickly?
Ryanair sues passenger
US presidents gather at Carter funeral

In 2024, a total of 9,757 people died on the route, according to Spanish migration charity Walking Borders.

Mr Trujillo said: “Almost every night we leave at dawn and arrive back late.

“This case is very positive, because it was with a newborn, but in all the services we do, even if we are tired, we know we are helping people in distress.”

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It’s not ‘traditional’ wildfire season – so why have the California fires spread so quickly?

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It's not 'traditional' wildfire season - so why have the California fires spread so quickly?

A real-life drama is unfolding just outside Hollywood. Ferocious wildfires have ballooned at an “alarming speed”, in just a matter of hours. Why?

What caused the California wildfires?

There are currently three wildfires torching southern California. The causes of all three are still being investigated.

The majority (85%) of all forest fires across the United States are started by humans, either deliberately or accidentally, according to the US Forest Service.

But there is a difference between what ignites a wildfire and what allows it to spread.

However these fires were sparked, other factors have fuelled them, making them spread quickly and leaving people less time to prepare or flee.

The main culprit so far is the Santa Ana winds.

Follow live: Malibu residents told to get ready to flee

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LA residents face ‘long and scary night ahead’

What are Santa Ana winds?

So-called Santa Ana winds are extreme, dry winds that are common in LA in colder winter months.

The California Department of Forestry and Fire Protection warned strong Santa Ana winds and low humidity are whipping up “extreme wildfire risks”.

Winds have already topped 60mph and could reach 100mph in mountains and foothills – including in areas that have barely had any rain for months.

It has been too windy to launch firefighting aircraft, further hampering efforts to tackle the blazes.

These north-easterly winds blow from the interior of Southern California towards the coast, picking up speed as they squeeze through mountain ranges that border the urban area around the coast.

They blow in the opposite direction to the normal onshore flow that carries moist air from the Pacific Ocean into the area.

The lack of humidity in the air parches vegetation, making it more flammable once a fire is started.

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Wildfires spread as state of emergency declared

The ‘atmospheric blow-dryer’ effect

The winds create an “atmospheric blow-dryer” effect that will “dry things out even further”, said Daniel Swain, a climate scientist at University of California, Los Angeles (UCLA).

The longer the extreme wind persists, the drier the vegetation will become, he said.

“So some of the strongest winds will be at the beginning of the event, but some of the driest vegetation will actually come at the end, and so the reality is that there’s going to be a very long period of high fire risk.”

What role has climate change played?

California governor Gavin Newsom said fire season has become “year-round in the state of California” despite the state not “traditionally” seeing fires at this time of year – apparently alluding to the impact of climate change.

Scientists will need time to assess the role of climate change in these fires, which could range from drying out the land to actually decreasing wind speeds.

But broadly we know that climate change is increasing the hot, dry weather in the US that parches vegetation, thereby creating the fuel for wildfires – that’s according to scientists at World Weather Attribution.

But human activities, such as forest management and ignition sources, are also important factors that dictate how a fire spreads, WWA said.

Read more:
Terrifying firestorm tears through home of film stars
State of emergency as wildfires sweep through LA celebrity suburb

A U.S flag flies as fire engulfs a structure while the Palisades Fire burns during a windstorm on the west side of Los Angeles, California.
Pic: Reuters
Image:
Pic: Reuters

Southern California has experienced a particularly hot summer, followed by almost no rain during what should be the wet season, said Professor Alex Hall, also from UCLA.

“And all of this comes on the heels of two very rainy years, which means there is plenty of fuel for potential wildfires.

“These intense winds have the potential to turn a small spark into a conflagration that eats up thousands of acres with alarming speed – a dynamic that is only intensifying with the warmer temperatures of a changing climate.”

The flames from a fire that broke out yesterday evening near a nature reserve in the inland foothills northeast of LA spread so quickly that staff at a care home had to push residents in wheelchairs and hospital beds down the street to a car park.

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