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Rishi Sunak has pledged to boost the economy, cut hospital waiting lists and stop migrant crossings in the Channel in his first speech of the year.

Speaking in Stratford, the PM laid out his priorities for 2023 and asked the public to judge his premiership on five promises.

These pledges are:

• to halve inflation

• to grow the economy

• to reduce debt

• to cut hospital waiting lists

• to stop migrant crossings

Mr Sunak promised to work “night and day” to deliver on the above five challenges during this parliament and to create “a future that restores optimism, hope and pride in Britain”.

PM faces questions on NHS pressures – politics latest

“So I want to make five promises to you today. Five pledges to deliver peace of mind. Five foundations, on which to build a better future for our children and grandchildren,” the PM said.

“First, we will halve inflation this year to ease the cost of living and give people financial security.

“Second, we will grow the economy, creating better-paid jobs and opportunity right across the country.

“Third, we will make sure our national debt is falling so that we can secure the future of public services.

“Fourth, NHS waiting lists will fall and people will get the care they need more quickly.

“Fifth, we will pass new laws to stop small boats, making sure that if you come to this country illegally, you are detained and swiftly removed.

“So, five promises – we will: Halve inflation, grow the economy, reduce debt, cut waiting lists, and stop the boats.

“Those are the people’s priorities. They are your government’s priorities. And we will either have achieved them or not.

“No tricks, no ambiguity, we’re either delivering for you or we’re not. We will rebuild trust in politics through action, or not at all. So, I ask you to judge us on the effort we put in and the results we achieve.”

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Food inflation reaches record levels

Mr Sunak continued: “People don’t want politicians who promise the earth and then fail to deliver. They want government to focus less on politics and more on the things they care about.

“The cost of living, too high. Waiting times in the NHS, too long. Illegal migration, far too much.

“I think people do accept that many of these challenges are at least in part, the legacy of COVID and impacted by the war in Ukraine. But that’s not an excuse. We need to address these problems, not just talk about them.”

The PM added: “I will only promise what I can deliver, and I will deliver what I promise.”

But he acknowledged he vision he set out may not be delivered in its entirety this year.

Mr Sunak’s speech comes as the UK is facing a wave of strikes, a cost of living crisis and huge pressures on the NHS.

Earlier today, a leading medical organisation said the PM must recall parliament “immediately” so MPs can discuss the “NHS crisis”.

The PM said his government is “taking urgent action” to increase hospital bed capacity by 7,000, adding: “And the NHS is working urgently on future plans for A&E and ambulances.”

He acknowledged that, at present, “patients aren’t receiving the care they deserve” and said “something has to change”.

The PM told his audience that the “most acute” pressure in the NHS is on A&E.

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PM addresses concerns over NHS and strikes

On the continuing industrial action, Mr Sunak called for a “reasonable dialogue” with the unions and promised an update on the government’s next steps.

Saying ministers “hugely value public sector workers like nurses”, the PM said his government’s actions will “reflect the people’s priorities”.

Yesterday, the PM’s new mission to combat high rates of innumeracy in England was unveiled through a pledge to ensure all pupils in the country study some form of the subject until the age of 18.

Addressing this ambition, Mr Sunak said: “Just imagine what greater numeracy will unlock for – people the skills to feel confident with your finances, to find the best mortgage deal.

“The ability to do your job better and get paid more and greater self-confidence to navigate a changing world.”

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Primark-owner ABF gets Hovis deal oven-ready

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Primark-owner ABF gets Hovis deal oven-ready

The London-listed parent of Primark was on Wednesday applying the finishing touches to a landmark transaction that will unite the Hovis and Kingsmill bread brands under common ownership.

Sky News understands that a deal for Associated British Foods (ABF) to acquire Hovis from private equity firm Endless is likely to be announced by the end of the week.

The timetable remains subject to delay, banking sources cautioned on Wednesday.

The deal, which will see ABF paying about £75m to buy 135 year-old Hovis, is likely to trigger a lengthy review by competition regulators given that it will bring together the second- and third-largest suppliers of packaged bread to Britain’s major supermarkets.

ABF owns Kingsmill’s immediate parent, Allied Bakeries, which has struggled in recent years amid persistent price inflation, changing consumer preferences and competition from larger rival Warburtons as well as new entrants to the market.

Confirmation of the tie-up will come three months after Sky News revealed that ABF and Endless – Hovis’s owner since 2020 – were in discussions.

Industry sources have estimated that a combined group could benefit from up to £50m of annual cost savings from a merger.

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Allied Bakeries was founded in 1935 by Willard Garfield Weston, part of the family which continues to control ABF, while Hovis traces its history even further, having been created in 1890 when Herbert Grime scooped a £25 prize for coming up with the name Hovis, which was derived from the Latin ‘Hominis Vis’ – meaning ‘strength of man”.

The overall UK bakery market is estimated to be worth about £5bn in annual sales, with the equivalent of 11m loaves being sold each day.

Critical to the prospects of a merger of Allied Bakeries, which also owns the Sunblest and Allinson’s bread brands, and Hovis taking place will be the view of the Competition and Markets Authority (CMA) at a time when economic regulators are under intense pressure from the government to support growth.

Warburtons, the family-owned business which is the largest bakery group in Britain, is estimated to have a 34% share of the branded wrapped sliced bread sector, with Hovis on 24% and Allied on 17%.

A merger of Hovis and Kingsmill would give the combined group the largest share of that segment of the market, although one source said Warburtons’ overall turnover would remain higher because of the breadth of its product range.

Responding to Sky News’ report in May of the talks, ABF said: “Allied Bakeries continues to face a very challenging market.

“We are evaluating strategic options for Allied Bakeries against this backdrop and we remain committed to increasing long-term shareholder value.”

Prior to its ownership by Endless, Hovis was owned by Mr Kipling-maker Premier Foods and the Gores family.

At the time of the most recent takeover, High Wycombe-based Hovis employed about 2,700 people and operated eight bakery sites, as well as its own flour mill.

Hovis’s current chief executive, Jon Jenkins, is a former boss of Allied Milling and Baking.

ABF declined to comment, while neither Endless nor Hovis could be reached for comment.

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Chancellor warned ‘substantial tax rises’ needed – as she faces ‘impossible trilemma’

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Chancellor warned 'substantial tax rises' needed - as she faces 'impossible trilemma'

Rachel Reeves will need to find more than £40bn of tax rises or spending cuts in the autumn budget to meet her fiscal rules, a leading research institute has warned.

The National Institute of Economic and Social Research (NIESR) said the government would miss its rule, which stipulates that day to day spending should be covered by tax receipts, by £41.2bn in the fiscal year 2029-30.

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In its latest UK economic outlook, NIESR said: “This shortfall significantly increases the pressure on the chancellor to introduce substantial tax rises in the upcoming autumn budget if she hopes to remain compliant with her fiscal rules.”

The deteriorating fiscal picture was blamed on poor economic growth, higher than expected borrowing and a reversal in welfare cuts that could have saved the government £6.25bn.

Together they have created an “impossible trilemma”, NIESR said, with the chancellor simultaneously bound to her fiscal rules, spending commitments, and manifesto pledges that oppose tax hikes.

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The institute urged the government to build a larger fiscal buffer through moderate but sustained tax rises.

“This will help allay bond market fears about fiscal sustainability, which may in turn reduce borrowing costs,” it said.

“It will also help to reduce policy uncertainty, which can hit both business and consumer confidence.”

It said that money could be raised by reforms to council tax bands or, in a more radical approach, by replacing the whole council tax system with a land value tax.

To reduce spending pressures, NIESR called for a greater focus on reducing economic inactivity, which could bring down welfare spending.

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Growth to remain sluggish

The report was released against the backdrop of poor growth, with the chancellor struggling to ignite the economy after two months of declining GDP.

The institute is forecasting modest economic growth of 1.3% in 2025 and 1.2% in 2026. That means Britain will rank mid-table among the G7 group of advanced economies.

‘Things are not looking good’

However, inflation is likely to remain persistent, with the consumer price index (CPI) likely to hit 3.5% in 2025 and around 3% by mid-2026. NIESR blamed sustained wage growth and higher government spending.

It said the Bank of England would cut interest rates twice this year and again at the beginning of next year, taking the rate from 4.25% to 3.5%.

Persistent inflation is also weighing on living standards: the poorest 10% of UK households saw their living standards fall by 1.3% in 2024-25 compared to the previous year, NIESR said. They are now 10% worse off than they were before the pandemic.

Professor Stephen Millard, deputy director for macroeconomics at NIESR, said the government faced tough choices ahead: “With growth at only 1.3% and inflation above target, things are not looking good for the chancellor, who will need to either raise taxes or reduce spending or both in the October budget.”

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Ofwat chief Black to step down ahead of watchdog’s abolition

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Ofwat chief Black to step down ahead of watchdog's abolition

The chief executive of Ofwat is to step down within months as Britain’s embattled water regulator prepares to be abolished by ministers.

Sky News has learnt that David Black is preparing to leave Ofwat following discussions with its board, led by chairman Iain Coucher.

The timing of Mr Black’s exit was unclear on Tuesday afternoon, although sources said he was likely to go in the near future.

An official announcement could come within days, according to industry sources.

Insiders say the relationship between Mr Coucher and Mr Black has been under strain for some time.

Water industry executives said that Steve Reed, the environment secretary, repeatedly referred to the regulator’s leadership during a meeting last month.

It was unclear on Tuesday who would replace Mr Black, or whether an interim chief executive would remain in place until Ofwat is formally scrapped.

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The complexity of the impending regulatory shake-up means that Ofwat might not be formally abolished until at least 2027.

Mr Black took over as Ofwat’s permanent boss in April 2022, having held the position on an interim basis for the previous 12 months.

He has worked for the water regulator in various roles since 2012.

If confirmed, Mr Black’s departure will come with Britain’s privatised water industry and its regulator mired in crisis.

Water companies are under increasing pressure from Mr Reed, the environment secretary, over their award of executive bonuses even as the number of serious pollution incidents has soared.

The UK’s biggest water utility, Thames Water, meanwhile, is on the brink of being temporarily nationalised through a special administration regime as it tries to secure a private sector bailout led by its creditors.

In a review published last month, the former Bank of England deputy governor Sir Jon Cunliffe recommended that Ofwat be scrapped.

He urged the government to replace it with a new body which would also incorporate the Drinking Water Inspectorate and absorb the water-related functions of the Environment Agency and Natural England.

Speaking on the day that Sir Jon’s recommendations were made public, Mr Reed said: “This Labour government will abolish Ofwat.

“Ofwat will remain in place during the transition to the new regulator, and I will ensure they provide the right leadership to oversee the current price review and investment plan during that time.”

A white paper on reforming the water industry is expected to be published in November with the aim of delivering a reset of the industry’s performance and supervision, according to industry sources.

A handful of water companies have challenged Ofwat’s price determinations, which in aggregate outlined £104bn in spending by the industry during the 2026-30 regulatory period.

Anglian Water, Northumbrian Water and Southern Water are among those whose spending plans are now being assessed by the Competition and Markets Authority.

Responding to the Cunliffe report last month, Ofwat said: “While we have been working hard to address problems in the water sector in recent years, this report sets out important findings for how economic regulation is delivered and we will develop and take this forward with government.

“Today marks an opportunity to reset the sector so it delivers better outcomes for customers and the environment.

“Ofwat will now work with the government and the other regulators to form this new regulatory body in England and to contribute to discussions on the options for Wales set out in the report.

“In advance of the creation of the new body, we will continue to work hard within our powers to protect customers and the environment and to discharge our responsibilities under the current regulatory framework.”

Ofwat has been contacted for comment about Mr Black’s future, while the Department for Environment, Food and Rural Affairs (DEFRA) has also been approached for comment.

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