Jeremy Hunt offers hope on pay settlements but rules out feeding inflation

Published

2 years ago

February 12, 2023

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Chancellor Jeremy Hunt has not ruled out increasing pay offers to public sector workers, but warned that giving more money to teachers and nurses could entrench high inflation.

Speaking as it was revealed the UK economy narrowly avoided recession in 2022, Mr Hunt also indicated he would resist pressure to cancel a planned cut to household energy support that will see typical bills rise by £500 to around £3,000 in April.

Asked if there were any circumstances in which he would consider increasing pay offers to avert more public sector pay strikes the chancellor told Sky News: “It’s not a no, but I’m saying we’ll talk about absolutely anything, except things that will dig in the very high inflation that is causing people to see the cost of their weekly shop go up and the value of their wages erode.

“We’ll talk about absolutely anything to resolve the strikes except measures that will entrench high inflation.

“We don’t think strikes are helpful, they’re very damaging and very disruptive. The best way to resolve these issues is to sit and talk and find a solution that doesn’t entrench the very inflation that is upsetting so many people.”

Many economists dispute the argument that increasing public sector pay can entrench inflation, but Mr Hunt said it was a key factor in holding down pay.

“We should listen to a very clear warning from the Bank of England governor on Thursday who said that if you fund higher wage settlements through borrowing, that is inflationary, and that’s why it’s a very difficult situation. We want to get back into a situation where people’s real wages are growing.”

On maintaining energy support, a measure that would reduce inflation for family budgets, he argued that continuing support at current levels would damage the public finances.

The cost to the taxpayer of existing support has proved much lower than initially forecast because wholesale gas prices have fallen, leading campaigners and the energy industry to call for support to be maintained.

“We are doing absolutely everything we can to help families through this difficult period,” Mr Hunt said. “We’re giving about £3,500 of support on average to every family in the country this year and last year, so it’s a massive amount, about £99bn.

“But we also have to be responsible with public finances. Because if we’re not we just give them a different pressure, which is higher interest rates as a result of the reasons. We look at everything we can do, but we won’t do things that lead to higher interest rates.”

The chancellor’s position on pay and energy reflects the dismal state of the public finances.

The official figures released by the Office for National Statistics earlier on Friday paint a grim picture of a stagnating economy with a dysfunctional public sector.

The Bank of England is forecasting a recession this year, albeit slightly less acute than previously, and forecast the UK will not recover to its pre-pandemic scale until 2026.

There is also acute pressure on Mr Hunt from businesses to incentivise investment and growth. Pharmaceutical giant AstraZeneca offered a stark example of the impact of government policy this week, citing rising corporation tax as the reason it has chosen to build a new manufacturing facility in Ireland not the UK.

Mr Hunt rejected the characterisation of the UK’s prospects.

“We believe that this country has some of the most exciting growth prospects anywhere if you look at our strengths in technology,” he said.

“Last year, we became only the third country in the world to have a trillion-dollar tech economy, our strengths are the life sciences and in clean energy where we’re a world leader in offshore wind. We think we have fantastic growth prospects.

“But to take to make the most of those we have to deal with our inflation issue which is over 10%, and for companies that want to invest high interest rates are a real disincentive.

“We need to get interest rates down. That was working with the Bank of England to deal with inflation. And then we think we have tremendous growth prospects.”

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‘Nobody likes Trump’: Sky News finds defiance on the streets of Tehran

Published

6 hours ago

July 5, 2025

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'Nobody likes Trump': Sky News finds defiance on the streets of Tehran

To the sound of mournful chants and the slow beat of drums, they march, whipping their backs with metal flails.

It is an ancient ceremony going back almost 14 centuries – the Shia commemoration of Ashura.

But this year in particular has poignant significance for Iranians.

The devout remember the betrayal and death of the Imam Hussein as if it happened yesterday.

We filmed men and women weep as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.

The grandson of the Prophet Muhammad was killed by the armies of the Caliph Yazid in the seventh century Battle of Karbala.

Shia Muslims mark the anniversary every year and reflect on the virtue it celebrates – of resistance against oppression and injustice. But more so than ever this year, in the wake of Israel and America’s attacks on their country.

The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here by people and officials.

Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.

Iran believed it was making diplomatic progress in talks with America, which it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.

“Death to Israel” chants resounded outside the mosque in skies that for 12 days were filled with the sounds of Israeli jets.

There is a renewed sense of defiance here.

One man told us: “The lesson to be learned from Hussein is not to give in to oppression, even if it is the most powerful force in the world.”

A woman was dismissive about the US president.

“I don’t think about Trump. Nobody likes him. He always wants to attack too many countries.”

Pictures on billboards nearby link Imam Hussein’s story and current events. They show the seventh century imam on horseback alongside images of modern missiles and drones from the present day.

Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.

Officially Iran is projecting defiance, but not closing the door to diplomacy.

Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.

“We are very strong in defence, and as state officials have announced, this time Israel will receive an even stronger response compared to previous times. We hope that Israel will not make such a mistake.”

But there is also a hint of conciliation. Senior Iranian officials have told Sky News back-channel efforts are under way to explore new talks with the US.

Israel had hoped its attacks could topple the Iranian leadership. Those hopes proved unfounded. The government is in control here.

For many Iranians it seems quite the opposite happened – the 12-day war has brought them closer together.

World

Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says

Published

9 hours ago

July 5, 2025

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Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says

Two American security workers in Gaza were injured after grenades were thrown during food distribution in Khan Younis, the Gaza Humanitarian Foundation (GHF) has said.

In a statement, the US and Israeli-backed aid group said a targeted terrorist attack was carried out at one of its sites in southern Gaza on Saturday morning.

The two Americans injured “are receiving medical treatment and are in stable condition,” it said, adding that the delivery of aid was “otherwise successful” and that “no local aid workers or civilians were harmed”.

GHF didn’t say exactly when the incident happened but claimed Hamas was behind the attack, adding: “GHF has repeatedly warned of credible threats from Hamas, including explicit plans to target American personnel, Palestinian aid workers, and the civilians who rely on our sites for food.

“Today’s attack tragically affirms those warnings.”

Later, the aid group posted a picture on social media, which it said showed “fragments of a grenade packed with ball bearings” that was used in the attack.

Asked by Sky’s US partner network, NBC News, whether the two injured individuals were responsible for handing out aid or were responsible for providing security, GHF said they were “American security workers” and “two American veterans.”

The aid group did not provide specific evidence that Hamas was behind the attack.

The US and Israeli-backed group has been primarily responsible for aid distribution since Israel lifted its 11-week blockade of the Gaza Strip in May.

It comes after Sky News analysis showed GHF aid distributions are associated with a significant increase in deaths in Gaza.

According to Gaza’s health ministry, 600 Palestinians have been killed while seeking aid from GHF sites as of 3 July, which charities and the UN have branded “death traps”.

Meanwhile, the Associated Press has reported that Israeli-backed American contractors guarding GHF aid centres in Gaza are using live ammunition and stun grenades.

GHF has vehemently denied the accusations, adding that it investigated AP’s allegations and found them to be “categorically false”.

Israel’s military added that it fires only warning shots and is investigating reports of civilian harm.

It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.

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Hamas gives ‘positive’ response to ceasefire proposal but asks for amendments

Published

15 hours ago

July 5, 2025

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Hamas gives 'positive' response to ceasefire proposal but asks for amendments

Hamas has said it has “submitted its positive response” to the latest proposal for a ceasefire in Gaza to mediators.

The proposal for a 60-day ceasefire was presented by US President Donald Trump, who has been pushing hard for a deal to end the fighting in Gaza, with Israeli Prime Minister Benjamin Netanyahu set to visit the White House next week to discuss a deal.

Mr Trump said Israel had agreed to his proposed ceasefire terms, and he urged Hamas to accept the deal as well.

Hamas’ “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defence Forces inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.

But the source told Sky News: “Things are looking good.”

Hamas said it is “fully prepared to immediately enter into a round of negotiations regarding the mechanism for implementing this framework” without elaborating on what needed to be worked out in the proposal’s implementation.

The US said during the ceasefire it would “work with all parties to end the war”.

A Hamas official said on condition of anonymity that the truce could start as early as next week.

But he added that talks were needed first to establish how many Palestinian prisoners would be released in return for each freed Israeli hostage and to specify the amount of humanitarian aid that will be allowed to enter Gaza during the ceasefire.

He said negotiations on a permanent ceasefire and the full withdrawal of Israeli troops from Gaza in return for the release of the remaining hostages would start on the first day of the truce.

Hamas has been seeking guarantees that the 60-day ceasefire would lead to a total end to the nearly 21-month-old war, which caused previous rounds of negotiations to fail as Mr Netanyahu has insisted that Israel would continue fighting in Gaza to ensure the destruction of Hamas.

The Hamas official said that Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.

Speaking to journalists on Air Force One, Mr Trump welcomed Hamas’s “positive spirit” to the proposal, adding that there could be a ceasefire deal by next week.

Hamas also said it wants more aid to flow through the United Nations and other humanitarian agencies, which comes as the UN human rights officer said it recorded 613 Palestinians killed in Gaza within a month while trying to obtain aid.

Most of them were said to have been killed while trying to reach food distribution points by the controversial US- and Israeli-backed Gaza Humanitarian Foundation (GHF).

The spokeswoman for the UN human rights office, Ravina Shamdasani, said the agency was not able to attribute responsibility for the killings, but added that “it is clear that the Israeli military has shelled and shot at Palestinians trying to reach the distribution points” operated by GHF.

Ms Shamdasani said that of the total tallied, 509 killings were “GHF-related”, meaning at or near its distribution sites.

The GHF accused the UN of taking its casualty figures “directly from the Hamas-controlled Gaza health ministry” and of trying “to falsely smear our effort”, which echoed statements to Sky News by the executive director of GHF, Johnnie Moore.

Mr Moore called the UN figures a “disinformation campaign” that is “meant to shut down our efforts” in the Gaza Strip.