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An unrepentant Liz Truss has sought to blame a left-wing infiltration of thinktanks, the Bank of England and other “institutions” for the market turmoil during her brief premiership.

Ms Truss was speaking at an Institute for Government event about what she believes are the issues with the UK economy.

Her 49 days as prime minister – the shortest ever – ended after attempts to reform the economy culminated with the Bank of England having to prevent pension markets from collapsing as markets expected interest rates to soar on borrowing to pay for tax cuts.

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Liz Truss’s rise and fall

Ms Truss did admit that she tried to go too far, too fast. She said: “It was certainly true that I didn’t just try to fatten the pig on market day but tried to rear the pig, fatten the pig and slaughter it on market day.”

But she did not apologise – despite being asked several times about her time in Downing Street – and pointed out that interest rates and gilt yields are now higher than when she was in office.

Sky’s economics and data editor Ed Conway explained that the “ham-fisted” way in which Ms Truss tried to change policy led to her losing the confidence of the markets, which set off “mines” and shook confidence in the UK’s economy.

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At the end of her speech, Ms Truss revealed she would be heading to the Conservative Party conference in Manchester, where she would be “saying more”.

This conference is Rishi Sunak’s first as leader.

In her speech, Ms Truss said: “Certainly as a politician, trying to deliver what I believed people had voted for, there was a lot of institutional bureaucracy in the way.

“And even during the leadership election campaign, and maybe this did not make me popular with the OBR and the Bank of England, I pointed out that there was an orthodoxy in Britain about economic policy and I tried to challenge that orthodoxy.

“And I didn’t find a massive level of support, frankly, from those institutions.”

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Outgoing Prime Minister Liz Truss making a speech outside 10 Downing Street, London before travelling to Buckingham Palace for an audience with King Charles III to formally resign as PM. Picture date: Tuesday October 25, 2022.
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Ms Truss is the UK’s shortest serving prime minister

She argued that, after the end of the Cold War, “free market economists went off to lucrative jobs in the city allowing academic institutions and think tanks to be captured by the left” – and this made her attempts to reduce tax and increase growth harder.

Ms Truss called on Mr Sunak to make cut taxes – saying her successor needs to cancel the rise in corporation tax, cut the top rate of income tax and reform IR35, as well as advocating for the return of VAT-free shopping for tourists.

The Bank of England was singled out by the former prime minister, arguing that they had kept interest rates too low for too long and extended an era of cheap money without warning of the consequences.

Mark Carney, a former governor of the central bank, accuse Ms Truss of contributing to a weakening of the UK’s economic standing and creating “Argentina-on-the-Channel” rather than “Singapore-on-Thames”.

Ms Truss said: “I’m afraid there’s quite a lot of finger-pointing going on from people like Mark Carney because they don’t want to admit their culpability or the culpability of their central banking associates in this.

“And I again think, of course politicians should be held accountable and responsible for what we do, but when there are people with significant power, you know, I don’t feel that the same questions are necessarily asked about them.”

Asked by Sky political correspondent Ali Fortescue if there was a credibility crisis when Ms Truss was in Number 10, the former leader said: “It’s very difficult if the government of the day has an economic policy that clearly, leading economic institutions in the UK and indeed internationally, don’t necessarily agree with.”

She pointed out comments by the IMF and Joe Biden when she was prime minister.

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Ms Truss added: ” I don’t regret the choice I made and if people say, well, you put the case back for free markets, what I think I have been able to do … this has given me a real insight into why it’s so difficult for governments to deliver, you know, a smaller state or tax cuts.

“It’s not just a problem that there isn’t enough political agreement, we actually have real institutional issues with delivering these things and that is what I’m going to be exploring further.”

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Interest rates held at 5.25% by Bank of England for seventh time in a row

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Interest rates held at 5.25% by Bank of England for seventh time in a row

The Bank of England has held interest rates at 5.25% for the seventh time in a row.

The decision to maintain the cost of borrowing comes despite official figures yesterday which revealed inflation had fallen to the Bank’s target of 2% for the first time in nearly three years.

However, the move by its Monetary Policy Committee (MPC) to continue the current 16-year high in rates had been widely expected by economists and financial markets.

Seven members of the panel voted to hold, while the remaining two backed a 0.25 percentage point cut.

Governor Andrew Bailey said policymakers “need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25% for now”.

Following the decision, investors now think the probability of the Bank making a rate cut in August is 44% – versus 56% for another hold.

But the market thinks there is a 71% probability of a reduction in September.

Some members of the MPC said “more evidence of diminishing inflation persistence was needed” before they could cut rates.

However, two members of the committee – Swati Dhingra and Dave Ramsden – again voted for a reduction, arguing that inflation looked set to remain at normal levels.

The Bank began steadily increasing rates in December 2021 as part of efforts to bring down inflation – which soared in the wake of the COVID pandemic and amid the war in Ukraine.

The recent spike in the pace of price rises peaked at 11.1% in October 2022 – the highest level since 1981.

While inflation has now come back down, officials remain concerned and fear it could tick up again later this year.

Wednesday’s figures from the Office for National Statistics (ONS) revealed that services inflation – which covers sectors such as the hospitality industry – had only fallen to 5.7% in May, less than expected.

The data prompted financial markets to push back their expectations of the Bank’s first rate cut of the year.

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The ONS said on Wednesday that the UK’s consumer prices index (CPI) rate of inflation, for the year to May, was the lowest since July 2021.

Officials said the drop was largely down to falling food prices, although the cost of motor fuel rose slightly.

The prospect of a rate cut this week was dealt a blow last month when wage growth – a driver of inflation – came in higher than expected.

Economist Ruth Gregory, from research firm Capital Economics, said she still believed there was a “good chance” of a rate cut in August – and that rates could drop to 3% by next year.

She added: “There was never much chance that the Bank would cut rates at this month’s meeting, given recent upside surprises on services CPI inflation and wage growth and the upcoming election.”

However, Ms Gregory said the language in the Bank’s latest minutes hinted that the MPC was willing to make a move in August, and that the decision to hold had been “finely balanced” among its members.

The Federation of Small Businesses described the Bank’s move as “disappointing”.

National chair Martin McTague said: “The high plateau rates are currently stuck at is now undermining growth as small firms struggle to access affordable finance to help them expand.

“Inflation is now back on target and holding off a cut in the base rate until a future date risks snuffing out tentative signs of a recovery in GDP [gross domestic product], with the flat growth in April a warning sign.”

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Future of new oil and gas projects in UK thrown into doubt after landmark Supreme Court decision

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Future of new oil and gas projects in UK thrown into doubt after landmark Supreme Court decision

The future of new oil and gas projects in the UK has been thrown into doubt following a landmark decision by the Supreme Court.

The court concluded the environmental impact of emissions from burning fossil fuels must be considered in planning applications for new extraction projects – not just the impacts of the emissions produced in extracting the oil.

The case hinged around an oil drilling project at Horse Hill in Surrey, granted planning permission by Surrey County Council in 2019.

Local campaigner Sarah Finch argued the environmental impact of the project should have taken into account not just the carbon emissions created in extracting the oil, but the environmental impact when they are burned.

She challenged an earlier Court of Appeal ruling dismissing her case, having also lost a legal battle in the High Court.

But the Supreme Court justices ruled on Thursday three to two in favour of allowing her appeal, and quashed the decision to grant planning permission for the site.

Sarah Finch outside court
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Environmental campaigner Sarah Finch brought about the appeal

Speaking after the ruling, former Surrey resident, Ms Finch said she was “absolutely over the moon” adding that it was a “welcome step towards a safer, fairer future”.

In his judgement, Lord Leggatt concluded: “In my view, there was no basis on which the council could reasonably decide that it was not necessary to assess the combustion emissions.”

He went on: “Given the agreed fact that all the oil produced would be refined, I see no reason why environmental impacts resulting from the process of refining oil should not in principle fall within the scope of the EIA for the extracting of oil.”

The court did not conclude that fossil fuel emissions were unlawful, only that they must be considered in an environmental impact assessment – a tool used in the planning process to assess the effects of a project on the environment.

Campaigners celebrating the landmark win
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Campaigners celebrate the landmark win outside court

Campaigners celebrate the ruling

In relation to the Horse Hill project Justice Leggatt said: “It is not disputed that these emissions, which can easily be quantified, will have a significant impact on climate. The only issue is whether the combustion emissions are effects of the project at all. It seems plain to me that they are.”

Given the burden of scientific evidence of the negative environmental impact of carbon emissions, the ruling that the downstream impacts of burning extracted oil and gas must be considered by anyone applying to extract them is significant.

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The decision, from the UK’s highest court, could have immediate implications for other fossil fuel extraction projects facing legal challenge by environmental campaigners.

West Cumbria Mining (WCM), the company behind a coal mine in Whitehaven approved by the government in 2022, clearly felt this could be a possibility as their lawyers intervened in this latest case.

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WCM did not respond to a request for comment on why it did so, but, if the campaigners’ appeal against the Surrey oil site wins next month, it could mean “that you have to completely reassess whether that coal mine in Cumbria can happen at all”, according to barrister Sam Fowles.

“It is extremely difficult to overstate the significance of this case,” Mr Fowles, who specialises in planning and environment law at Cornerstone Barristers, said.

It has the potential to trigger the “beginning of the end of… new fossil fuel extraction in the UK going forward”, he added.

The ruling could also have a bearing on offshore oil and gas projects such as the giant Rosebank oil and gas field in the North Sea.

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While planning rules offshore are different, EIAs are also required.

Charles McAllister, director of industry group UK Onshore Oil and Gas, called it “incontrovertible” that the UK needs some oil and gas beyond 2050, “even with huge growth in renewables”.

“It’s a case of where we got it from, not if we need or not,” he said.

Developers, or future governments, could argue that the economic or energy security benefits of extracting fossil fuels could outweigh the environmental impacts of burning them.

However, the ruling opens a new avenue for climate campaigners to challenge future oil, gas or coal projects in the UK.

The government is due to make a decision imminently on Rosebank.

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Sainsbury’s sells banking arm to NatWest

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Sainsbury's sells banking arm to NatWest

Sainsbury’s is to sell most of its banking business to NatWest.

The high street lender will gain approximately one million new accounts from the deal.

NatWest said it also expects to acquire around £2.5bn in gross customer assets, including £1.4bn of unsecured personal loans and £1.1bn of credit card balances, along with £2.6bn in customer deposits.

The sale is expected to be completed in the first half of 2025.

Sainsbury’s said its banking customers would “not need to take any action” and said there would be no immediate changes to their terms and conditions.

It comes after the chain announced in January it was winding down its banking division to focus on the retail side of its business.

NatWest is expected to receive around £125m from Sainsbury’s, on completion of the deal, to take on its core banking assets and liabilities.

The supermarket giant estimates it will return at least £250m in excess capital to shareholders.

Its chief executive Simon Roberts said: “Today’s news means we will focus all our time and resources going forward on growing our core retail business, delivering great quality and value, week in, week out.”

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NatWest boss Paul Thwaite added: “This transaction is a great opportunity to accelerate the growth of our retail banking business at attractive returns, in line with our strategic priorities.

“As well as a complementary customer base, the transaction is expected to add scale to our credit card and unsecured personal lending business.”

The sale does not include Sainsbury’s Bank’s commission income businesses, such as insurance, cash points and travel money.

Argos Financial Services is also not included.

It comes after Sainsbury’s rival Tesco announced earlier this year that it was selling most of its banking arm to Barclays.

The deal was said to be worth up to £1bn.

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