Connect with us

Published

on

The cost of living crisis will deepen next year as people continue to be hit with falling pay, higher taxes and soaring bills, a think tank has warned.

Households face a cost of living “groundhog year” with disposable incomes plummeting even further than in 2022 and living standards getting “far worse” before they improve, according to the Resolution Foundation.

This is due to the continued shrinking of pay packets in real terms, with wages remaining well below current levels of inflation well into 2024.

Although inflation looks set to have peaked, this does not equal lower prices, just smaller price rises, meaning families still face sky-high costs.

Resolution Foundation chief executive Torsten Bell said: “From a cost of living perspective, 2022 was a truly horrendous year – far worse than any year in the pandemic or financial crisis.

“2023 should see the back of double-digit inflation, but it looks set to be a groundhog year for many families whose incomes look set to fall by just as much as they did in 2022.”

Mr Bell said many families will be helped by benefits and the National Living Wage rising, both by around 10% next April.

More on Cost Of Living

But he said this will be “swamped by shrinking pay packets, a record £900 rise in energy bills, tax bills for the typical household rising by £1,000, and millions seeing four digit increases in their mortgage bills”.

“For families’ living standards, things will get far worse in 2023 before they start to get better.”

Please use Chrome browser for a more accessible video player

2022 : An economic slowdown

This year saw the biggest annual fall in disposable income in a century as well as a collapse in living standards.

Surging energy prices have been the main driver of the cost of living crisis – mostly a consequence of Russia’s invasion of Ukraine in February that sent the price of many commodities such as wheat, and the price of producing them, through the roof.

But experts have also pointed to trade barriers caused by Brexit and the disastrous mini-budget of the Truss administration.

In his Autumn Statement, Chancellor Jeremy Hunt announced a raft of tax hikes to help fill a £54bn black hole.

The measures will see a typical middle-income household’s personal tax bills jump by around £1,000 from April, according to the Resolution Foundation, which focuses on living standards.

On top of this, household energy spending is set to rise by a record £900 to £2,450 in 2023, up from £1,550 this year.

This is despite wholesale energy prices having dropped, as retail prices continue to climb and government support is scaled back.

Incomes are also being squeezed by rising interest rates, which mean some 2 million households will move onto more expensive fixed-rate mortgages, costing the average mortgage-holder £3,000 more a year.

People are four times as likely to think that their financial situation has worsened than improved over the past year, according to a Resolution Foundation-commissioned YouGov survey of 10,470 adults.

The poll also found that low-income families are three times as likely as high-income families to not feel confident about their financial situation over the next three months.

Read More:
Inflation may have peaked but you should still be prepared for a bleak winter ahead
Millions of adults with health issues are living in cold and damp homes

The analysis comes as the UK braces for further strike action next year, as unions representing many sectors seek pay rises in-line with inflation.

An analysis by the Trade Union Congress suggested that workers have lost £20,000, on average, in real wages since 2008 as a result of pay not keeping up with inflation, and by 2025 the loss will total £24,000.

The government is being urged to negotiate to prevent coordinated industrial action, but on Thursday Defence Secretary Ben Wallace insisted there is “no magic wand” to produce money for the pay demands.

In response to the Resolution Foundation’s report, the Treasury said it has increased child benefit and child tax credits in line with inflation and made changes to Universal Credit “so that working families can keep more of what they earn”.

Click to subscribe to the Sky News Daily wherever you get your podcasts

The spokesperson added: “We also have a plan that will help to more than halve inflation next year, bearing down on the financial pressures that households face, and have already lifted millions of people out of paying tax altogether by raising the tax-free allowances for both income tax and National insurance by more than inflation since 2010.

“This is on top of substantial support with the cost of living, with everyone benefiting from energy bills being held down this winter and more than eight million vulnerable households having already received £1,200 in cash payments straight to their bank accounts – with a further £900 for those on means-tested benefits next year.”

Continue Reading

Business

Gatwick second runway decision deadline is extended on green concerns

Published

on

By

Gatwick second runway decision deadline is extended on green concerns

The government has signalled that plans to bring a second runway at Gatwick into regular use will get the green light if environmental conditions are met.

Transport Secretary Heidi Alexander said she was “minded to approve” the airport’s plans but the deadline for a decision had now been pushed back until the end of October.

The main stumbling blocks facing Gatwick’s proposals are related to its provisions for noise prevention and public transport.

The Planning Inspectorate had made recommendations in those two areas after initially rejecting the scheme.

Money latest: UK’s favourite DIY shops ranked

The airport welcomed the government’s statement but did not say whether it saw a need to adjust its plans to meet the conditions.

Gatwick has until April 24 to respond to the new proposals.

More on Gatwick

The northern runway already exists at the airport parallel to the main one, but cannot be used at the same time as it is too close.

It is currently limited to being a taxiway and only used for take-offs and landings if the main one has to shut.

Gatwick wants to move it 12 metres further away to solve this problem.

A view of the Northern Runway, after a press conference at the South Terminal of Gatwick Airport, West Sussex, to discuss plans to use the airport's emergency runway for routine flights. Picture date: Wednesday August 25, 2021.
Image:
The northern runway is currently only used for emergencies or where the main one is closed. Pic: PA

It says being able to run both at the same time would allow around 100,000 more flights per year and create 14,000 jobs.

Gatwick says the £2.2bn project would not need government money, would be 100% privately funded, and could be complete by the end of the decade.

The airport is already the second busiest in the UK, and the busiest single runway airport in Europe.

Campaigners argue the additional traffic would be catastrophic for the environment and the local community in particular.

Today’s update comes after the chancellor said last month the government also supported a third runway at Heathrow as part of its wider effort to bolster UK economic growth.

However, the formal planning process is still to take place.

Gatwick’s additional runway would be unlikely to open until the end of the decade, assuming any legal challenges were swiftly overcome.

A government source told Sky News: “The transport secretary has set out a path to approving the expansion of Gatwick today following the Planning Inspectorate’s recommendation to refuse the original application.

“This is an important step forward and demonstrates that this government will stop at nothing to deliver economic growth and new infrastructure as part of our Plan for Change.

“Expansion will bring huge benefits for business and represents a victory for holidaymakers. We want to deliver this opportunity in line with our legal, environmental and climate obligations.

“We look forward to Gatwick’s response as they have indicated planes could take off from a new runway before the end of this Parliament.”

Stewart Wingate, Gatwick’s chief executive, said: “We welcome today’s announcement that the Secretary of State for Transport is minded to approve our Northern Runway plans and has outlined a clear pathway to full approval later in the year.

“It is vital that any planning conditions attached to the final approval enable us to make a decision to invest £2.2bn in this project and realise the full benefits of bringing the Northern Runway into routine use.

“We will of course engage fully in the extended process for a final decision.”

He added: “We stand ready to deliver this project which will create 14,000 jobs and generate £1bn a year in economic benefits. By increasing resilience and capacity we can support the UK’s position as a leader in global connectivity and deliver substantial trade and economic growth in the South East and more broadly.

“We have also outlined to government how we plan to grow responsibly to meet increasing passenger demand, while minimising noise and environmental impacts.”

A spokesperson for campaign group Communities Against Gatwick Noise Emissions (Cagne) responded: “We welcome the extension by the secretary of state until October as she has obviously recognised the many holes in the Gatwick airport submissions during the planning hearings.

“Cagne do not believe Gatwick has been totally up front with their submissions, and the planning hearings left so many questions unanswered.”

Greenpeace UK’s policy director, Doug Parr, said of the process ahead: “By approving Gatwick’s expansion the government will hang a millstone the size of a 747 around the country’s neck.

“Such a decision would be one that smacks of desperation, completely ignoring the solid evidence that increasing air travel won’t drive economic growth. The only thing it’s set to boost is air pollution, noise, and climate emissions.”

Continue Reading

Business

Ex-Manchester United chief Woodward pitched Eagle Football role

Published

on

By

Ex-Manchester United chief Woodward pitched Eagle Football role

Ed Woodward, the former Manchester United chief, has been approached about joining the vehicle which owns stakes in clubs including Crystal Palace and Olympique Lyonnais.

Sky News has learnt that Mr Woodward, who left Old Trafford in 2022, a year after United’s involvement in the ill-fated European Super League project, is being lined up as an independent director of Eagle Football Holdings as it prepares to list in the US.

Sources said on Thursday that it was not certain that Mr Woodward’s appointment would go ahead, but confirmed that he had been approached about his first mainstream football directorship since ending his long stint at the former Premier League champions.

Mr Woodward spent 17 years at Old Trafford, having played a key role in the Glazer family’s debt-fuelled takeover of the club in 2005.

Money latest: UK’s favourite DIY shops ranked

Eagle Football, which is controlled by the American businessman John Textor, is expected to file confidentially with US regulators for an initial public offering in the next fortnight.

The vehicle owns a 45% stake in Crystal Palace, which it has been trying to sell for months but may now retain as a result of the club’s improved performance in English football’s top flight.

More from Money

Last summer, Sky News revealed that Eagle Football had hired investment banks including Stifel and TD Cowen to advise on the IPO, with Bloomberg News adding this week that UBS is also working on the deal.

The Eagle Football board is understood to have added Mr Textor’s former FuboTV colleague Alex Bafer, the Trilith Studios president and chief executive Frank Patterson and finance executive Sam Lynn as directors in recent weeks.

Its lenders are currently represented on the board, although these directors are expected to step down in the event of the company becoming publicly traded.

If the IPO proceeds, Eagle Football is expected to try to raise several hundred million dollars at a valuation of more than $2bn.

The vehicle also owns the Brazilian champions Botafogo, RW Molenbeek in Belgium and FC Florida.

Last year, Mr Textor held talks about buying Everton FC, but was eventually outbid by the AS Roma owner, Dan Friedkin.

Had he been successful, Mr Textor would have had to complete the sale of his Palace stake under Premier League ownership rules.

Raine Group, which handled the sale of Chelsea in 2022 and a minority stake in Manchester United to Sir Jim Ratcliffe the following year, has been overseeing the potential disposal of Eagle Football’s Crystal Palace stake.

A number of parties have expressed serious interest, including a group advised by the football financier Keith Harris.

However, a transaction is not thought to be imminent.

In the past, Mr Textor has spoken about his belief that public ownership of football teams provides fans with greater transparency about the running of their clubs.

He has described this as the democratisation of ownership – an issue likely to be at the heart of a bill on football regulation when it is reintroduced to parliament by the new Labour government.

If Eagle Football’s filing with the US Securities and Exchange Commission proceeds in the coming weeks, its stock would be expected to commence trading several months later.

Mr Textor could not be reached for comment, while Mr Woodward did not respond to a request for comment on Thursday.

Continue Reading

Business

Nvidia signals strong AI chip demand despite DeepSeek threat

Published

on

By

Nvidia signals strong AI chip demand despite DeepSeek threat

Nvidia has signalled no drop in demand for its flagship chips among big artificial intelligence (AI) spenders despite the low-cost challenge posed by Chinese rival DeepSeek.

The leading AI chipmaker said it expected Blackwell sales to continue to grow after its latest earnings beat market expectations.

Nvidia forecast revenue of around $43bn (£34bn) for its first quarter after achieving a figure of $39.3bn (£31bn) over its last three months – up 12% from the previous quarter and 78% from one year ago.

Just a month ago, its shares took a hammering when it emerged DeepSeek‘s primary chatbot, which uses lower-cost chips, had become the most popular free application on Apple’s App Store across the US.

Nvidia’s shares lost almost $600bn in market value in a day.

It also prompted investors to question whether the AI-led stock market rally of recent years was overblown.

There was anxiety ahead of Nvidia’s earnings report though shares only fell fractionally in after-hours dealing.

More from Money

Market analysts suggested demand from Microsoft, Amazon and other heavyweight tech companies racing to build
AI infrastructure remained robust, given Nvidia’s revenue guidance even though the bulk of it is accounted for through data centres.

Please use Chrome browser for a more accessible video player

Who will win the AI battle?

Read more: What is DeepSeek?

Nvidia founder Jensen Huang said Nvidia has ramped up the massive-scale production of Blackwell and achieved “billions of dollars in sales in its first quarter”.

“Demand for Blackwell is amazing as reasoning AI adds another scaling law – increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter.

“AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionise the largest industries,” he said.

Derren Nathan, head of equity research at Hargreaves Lansdown, said of the report: “The longer-term investment case for the driver of the AI train is looking difficult to pick holes in, with Meta’s $200bn just one of the latest mega investments in data centres to be unveiled recently.

“By virtue of scale, growth may be slowing a little but upgrades to analysts full-year numbers can be expected off the back of today’s results. At a around 30x forward earnings, the valuation still doesn’t look overcooked.”

Continue Reading

Trending