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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.”

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Why is the UK economy so weak?

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.

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“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.”

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Thousands of NHS workers strike

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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Trump criticises Putin after potentially ‘historic’ meeting with Zelenskyy before Pope’s funeral

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Trump criticises Putin after potentially 'historic' meeting with Zelenskyy before Pope's funeral

Donald Trump has criticised Vladimir Putin and suggested a shift in his stance towards the Russian president after a meeting with Volodymyr Zelenskyy before the Pope’s funeral.

The Ukrainian president said the one-on-one talks could prove to be “historic” after pictures showed him sitting opposite Mr Trump, around two feet apart, in the large marble hall inside St Peter’s Basilica.

The US president said he doubted his Russian counterpart’s willingness to end the war after leaving Rome after the funeral of Pope Francis at the Vatican.

Follow live updates: 200,000 mourn at Vatican

In a post on his Truth Social platform, he said “there was no reason” for the Russian president “to be shooting missiles into civilian areas, cities and towns, over the last few days”.

The two leaders held talks before attending the Pope's funeral
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The two leaders held talks before attending the Pope’s funeral

He added: “It makes me think that maybe he doesn’t want to stop the war, he’s just tapping me along, and has to be dealt with differently, through ‘Banking’ or ‘Secondary Sanctions?’ Too many people are dying!!!”

The meeting between the US and Ukrainian leaders was their first face-to-face encounter since a very public row in the Oval Office in February.

Mr Zelenskyy said he had a good meeting with Mr Trump in which they talked about the defence of the Ukrainian people, a full and unconditional ceasefire, and a durable and lasting peace that would prevent the war restarting.

Other images released by the Ukrainian president’s office show Sir Keir Starmer and French President Emmanuel Macron were present for part of the talks, which were described as “positive” by the French presidency.

Mr Zelenskyy‘s spokesman said the meeting lasted for around 15 minutes and he and Mr Trump had agreed to hold further discussions later on Saturday.

The world leaders share a moment before the service
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The world leaders shared a moment before the service

Trump and Zelenskyy meet in the Basilica
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Donald Trump and Volodymyr Zelenskyy meet in the Basilica

But the US president left Rome for Washington on Air Force One soon after the funeral without any other talks having taken place.

The Ukrainian president’s office said there was no second meeting in Rome because of the tight schedule of both leaders, although he had separate discussions with Mr Starmer and Mr Macron.

The French president said in a post on X “Ukraine is ready for an unconditional ceasefire” and that a so-called coalition of the willing, led by the UK and France, would continue working to achieve a lasting peace.

There was applause from some of the other world leaders in attendance at the Vatican when Mr Zelenskyy walked out of St Peter’s Basilica after stopping in front of the pontiff’s coffin to pay his respects.

U.S President Donald Trump attends the funeral Mass of Pope Francis, at the Vatican, April 26, 2025. REUTERS/Kai Pfaffenbach
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Donald Trump and the Ukrainian president met for the first time since their Oval Office row. Pic: Reuters

Sir Tony Brenton, the former British ambassador to Russia, said the event presents diplomatic opportunities, including the “biggest possible meeting” between Mr Trump and the Ukrainian leader.

He told Sky News it could mark “an important step” in starting the peace process between Russia and Ukraine.

Professor Father Francesco Giordano told Sky News the meeting is being called “Pope Francis’s miracle” by members of the clergy, adding: “There’s so many things that happened today – it was just overwhelming.”

The bilateral meeting comes after Mr Trump’s peace negotiator Steve Witkoff held talks with Mr Putin at the Kremlin.

They discussed “the possibility of resuming direct negotiations between Russia and Ukraine”, Kremlin aide Yuri Ushakov said.

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Russia and Ukraine have not held direct talks since the early weeks of the war, which began in February 2022.

Mr Trump has claimed a deal to end the war is “very close” and has urged Mr Zelenskyy to “get it done” in a post on his Truth Social platform.

He has previously warned both sides his administration would walk away from its efforts to achieve a peace if the two sides do not agree a deal soon.

Meanwhile, the Polish armed forces said a Russian military helicopter violated its airspace over the Baltic Sea on Friday evening.

“The nature of the incident indicates that Russia is testing the readiness of our air defence systems,” they said in a post on X.

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What we learn from remarkable photos of Trump-Zelenskyy meeting

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What we learn from remarkable photos of Trump-Zelenskyy meeting

On an extraordinary day, remarkable pictures on the margins that capture what may be a turning point for the world.

In a corner of St Peter’s Basilica before the funeral of Pope Francis, the leaders of America and Ukraine sit facing each other in two solitary chairs.

They look like confessor and sinner except we cannot tell which one is which.

Leaning forward hands together in their laps, Donald Trump and Volodymyr Zelenskyy stare at each other in one photo.

In another, the Ukrainian president seems to be remonstrating with the US president. This is their first encounter since their infamous bust-up in the Oval Office.

The two leaders held talks before attending the Pope's funeral
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The two leaders held talks before attending the Pope’s funeral

Other pictures show the moment their French and British counterparts introduced the two men. There is a palpable sense of nervousness in the way the leaders engage.

We do not know what the two presidents said in their brief meeting.

But in the mind of the Ukrainian leader will be the knowledge President Trump has this week said America will reward Russia for its unprovoked brutal invasion of his country, under any peace deal.

Mr Trump has presented Ukraine and Russia with a proposal and ultimatum so one-sided it could have been written in the Kremlin.

Kyiv must surrender the land Russia has taken by force, Crimea forever, the rest at least for now. And it must submit to an act of extortion, a proposed deal that would hand over half its mineral wealth effectively to America.

The world leaders share a moment before the service
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The world leaders shared a moment before the service

Afterwards, Zelenskyy said it had been a good meeting that could turn out to be historic “if we reach results together”.

They had talked, he said, about the defence of Ukraine, a full and unconditional ceasefire and a durable and lasting peace that will prevent a war restarting.

The Trump peace proposal includes only unspecified security guarantees for Ukraine from countries that do not include the US. It rules out any membership of Ukraine.

Ukraine’s allies are watching closely to see if Mr Trump will apply any pressure on Vladimir Putin, let alone punish him for recent bloody attacks on Ukraine.

Or will he simply walk away if the proposal fails, blaming Ukrainian intransigence, however outrageously, before moving onto a rapprochement with Moscow.

If he does, America’s role as guarantor of international security will be seen effectively as over.

This could be the week we see the world order as we have known it since the end of the Second World War buried, as well as a pope.

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Pope Francis funeral: 200,000 people bidding farewell to pontiff who had ‘open heart towards everyone’

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Pope Francis funeral: 200,000 people bidding farewell to pontiff who had 'open heart towards everyone'

Tens of thousands of people have packed St Peter’s Square as the funeral of Pope Francis begins.

Royals, world leaders and cardinals joined scores of worshippers at the Vatican, as mourning of the 266th pontiff transcended wealth and social class.

In keeping with Francis’s life as a breaker of tradition, many of the more elaborate and expensive rituals customary for the burial of popes have been foregone in favour of simpler options.

Around 200,000 people are attending the funeral, with around 50,000 packing out St Peter’s Square.

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Pope’s coffin carried out as funeral begins

Follow live: Pope Francis funeral service latest updates

His body had been lying in state since his death aged 88 on Easter Monday, spending the last few days in St Peter’s Basilica to allow mourners to pay their respects.

The Vatican – where the funeral service is taking place – and Rome – where Francis will be laid to rest – are under heavy security, with a no-fly zone in place overhead.

The coffin of Pope Francis is carried during the funeral Mass of Pope Francis in St. Peter's Square at the Vatican, April 26, 2025. REUTERS/Kai Pfaffenbach
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The coffin of Pope Francis is borne aloft by pallbearers. Pic: Reuters

Members of the clergy sit, ahead of the funeral Mass of Pope Francis, at the Vatican, April 26, 2025. REUTERS/Yara Nardi
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Members of the clergy gathered to say farewell to their pontiff. Pic: Reuters

President Donald Trump and Joe Biden, along with Sir Keir Starmer, President Emmanuel Macron and Ukraine’s President Volodymyr Zelenskyy, headline a huge selection of global leaders and dignitaries.

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Full order of service for Pope’s funeral

Francis’s coffin has been taken out into St Peter’s Square where 220 cardinals and 750 bishops and priests are sitting in rows, waiting to say goodbye to the Bishop of Rome.

A series of readings and prayers are being read before the 50,000 faithful gathered before the basilica, and the coffin will be sprinkled with holy water and incense.

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Singing rings out at the Vatican

Members of the clergy attend the funeral Mass of Pope Francis, in Saint Peter's Square, at the Vatican, April 26, 2025. REUTERS/Kai Pfaffenbach
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Members of the clergy stand in St Peter’s Square. Pic: Reuters

It began with Cardinal Giovanni Battista Re reading the Penitential Act – a way for the faithful to confess their sinfulness.

This was followed by the Liturgy of the Word, a part in Catholic mass where faithful gather to hear and reflect on the word of God.

Cardinal Re then delivered the homily, speaking about Pope Francis’ life and service to God.

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Applause breaks out as Zelenskyy arrives

Cardinal
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Cardinal Giovanni Battista Re read the homily

The cardinal praised the pontiff as someone who “touched the minds and hearts of people” who was “attentive to the signs of the times”.

He added: “Despite his frailty and suffering towards the end, Pope Francis chose to follow this path of self-giving until the last day of his earthly life.”

He said Francis “was a pope among the people, with an open heart towards everyone”.

A view of St Peter's Square during the funeral of Pope Francis, at the Vatican, Saturday, April 26, 2025. (AP Photo/Evan Vucci)
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Tens of thousands pack St Peter’s Square for the funeral. Pic: AP

Clergy during the funeral of Pope Francis in St. Peter's Square at the Vatican, Saturday, April 26, 2025. (AP Photo/Markus Schreiber)
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Clergy seated during the funeral. Pic: AP

At the end of the mass, the choir will sing in Latin: “May the angels lead you into paradise; may the martyrs come and welcome you and take you into the holy city, the new and eternal Jerusalem.”

After the service, Pope Francis’s body will be taken in procession through the streets of Rome to his final resting place at his favourite church, the Basilica of Santa Maria Maggiore.

People react as they wait outside the Papal Basilica of Saint Mary Major (Santa Maria Maggiore), ahead of the funeral of Pope Francis, in Rome, Italy, April 26, 2025. REUTERS/Carlos Barria
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Worshippers outside the Papal Basilica of Santa Maria Maggiore. Pic: Reuters

He will be ushered into the basilica – dedicated to the Virgin Mary – by prisoners and migrants, a last reflection of his priorities as pope.

In a break with tradition, the Pope outlined in his will his request to be buried “in the ground, without particular ornamentation” but simply with the inscription “Franciscus”.

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