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Prime Minister Rishi Sunak’s recent delay to key climate targets will actually cost many households more, rather than saving them money as he claimed, his own climate advisers have concluded.

In a major speech last month, Mr Sunak pushed back the end of new petrol and diesel car sales from 2030 to 2035, and scrapped a plan to make landlords improve the energy efficiency of their properties, which would have saved renters money on bills.

He also exempted some households from replacing gas boilers with a greener alternative, as part of a “pragmatic” rethink on the cost of the UK’s net zero climate policies.

Amid scepticism over the prime minister’s claims he was saving homes thousands of pounds, the Climate Change Committee (CCC), ran the numbers on the impact on people’s pockets.

It found renters will have to pay more for energy in less efficient homes, while drivers who move to electric cars later rather than sooner will face higher costs through their vehicle’s lifetime.

Professor Piers Forster, chair of the CCC, said: “Our position as a global leader on climate has come under renewed scrutiny following the prime minister’s speech.

“We urge the government to restate strong British leadership on climate change in the crucial period before the next climate summit, COP28 in Dubai.”

Mr Sunak said the government remained committed to net zero by 2050, which means cutting emissions as much as possible and offsetting the rest.

The CCC, which had in June already warned the UK was moving too slowly to meet its climate targets, said the prime minister had failed to provide any evidence to prove the new changes were compatible.

“We remain concerned about the likelihood of achieving the UK’s future targets,” Prof Forster added.

Whereas the government’s policy had been to phase out all new gas boilers in buildings by 2035 and replace them with heat pumps or other low-carbon methods, Mr Sunak’s speech in September announced that 20% of households would be exempt, to save steep costs on households that couldn’t afford it.

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Professor Rob Gross, director of UK Energy Research Centre, told Sky News: “Overall the CCC response makes clear that the commitments made by government created a self-fulfilling prophecy of failure – ambitious targets, inadequate delivery policy, and ultimately the conclusion that policies needed to be abandoned.

“If the government knew for years that some people would be negatively impacted then they could have made provision to protect those people rather than roll-back on targets.”

In its analysis, the CCC welcomed some other recent government climate policies, such as the new mandate on Zero Emissions Vehicles (ZEV), which should see 80% of new cars sold with zero emissions by 2030.

It said the ZEV mandate will likely offset Mr Sunak’s delay to selling fossil fuel cars, but warned the change could weaken business and consumer confidence in the industry.

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Government set ‘unrealistic target’

In response to the delayed ban on petrol and diesel cars, manufacturer Ford said business “needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three”.

Richard Hebditch, UK director of transport and environment, echoed the CCC’s fears about a hit to business confidence, saying: “We need to give not just vehicle manufacturers, but critical material suppliers and charging infrastructure installers, absolute confidence in what we’re aiming for and when.”

This would yield more investment, better charging and cheaper options for consumers, ultimately “making the switch to electric vehicles a complete no-brainer for people,” he said.

John Flesher, deputy director of the Conservative Environment Network, said: “The prime minister is right that we need to bring people with us on the road to net zero.

“Expecting too much from households could undermine the country’s current consensus on the need to act on climate change.”

In the same week Labour made climate action a key part of its pitch to voters, Mr Flesher added: “Conservatives cannot afford to lose their grip on the net zero narrative and must present a compelling, market-based route to net zero.”

As the issue that remains popular with voters, the PM should “harness the party’s environmental reputation to help build a popular and positive narrative going into the next election and not allow Labour to dominate this issue”, Mr Flesher said.

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Lloyds Banking Group in talks to buy digital wallet provider Curve

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Lloyds Banking Group in talks to buy digital wallet provider Curve

Britain’s biggest high street bank is in talks to buy Curve, the digital wallet provider, amid growing regulatory pressure on Apple to open its payment services to rivals.

Sky News has learnt that Lloyds Banking Group is in advanced discussions to acquire Curve for a price believed to be up to £120m.

City sources said this weekend that if the negotiations were successfully concluded, a deal could be announced by the end of September.

Curve was founded by Shachar Bialick, a former Israeli special forces soldier, in 2016.

Three years later, he told an interviewer: “In 10 years time we are going to be IPOed [listed on the public equity markets]… and hopefully worth around $50bn to $60bn.”

One insider said this weekend that Curve was being advised by KBW, part of the investment bank Stifel, on the discussions with Lloyds.

If a mooted price range of £100m-£120m turns out to be accurate, that would represent a lower valuation than the £133m Curve raised in its Series C funding round, which concluded in 2023.

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That round included backing from Britannia, IDC Ventures, Cercano Management – the venture arm of Microsoft co-founder Paul Allen’s estate – and Outward VC.

It was also reported to have raised more than £40m last year, while reducing employee numbers and suspending its US expansion.

In total, the company has raised more than £200m in equity since it was founded.

Curve has been positioned as a rival to Apple Pay in recent years, having initially launched as an app enabling consumers to combine their debit and credit cards in a single wallet.

One source close to the prospective deal said that Lloyds had identified Curve as a strategically attractive bid target as it pushes deeper into payments infrastructure under chief executive Charlie Nunn.

Lloyds is also said to believe that Curve would be a financially rational asset to own because of the fees Apple charges consumers to use its Apple Pay service.

In March, the Financial Conduct Authority and Payment Systems Regulator began working with the Competition and Markets Authority to examine the implications of the growth of digital wallets owned by Apple and Google.

Lloyds owns stakes in a number of fintechs, including the banking-as-a-service platform ThoughtMachine, but has set expanding its tech capabilities as a key strategic objective.

The group employs more than 70,000 people and operates more than 750 branches across Britain.

Curve is chaired by Lord Fink, the former Man Group chief executive who has become a prolific investor in British technology start-ups.

When he was appointed to the role in January, he said: “Working alongside Curve as an investor, I have had a ringside seat to the company’s unassailable and well-earned rise.

“Beginning as a card which combines all your cards into one, to the all-encompassing digital wallet it has evolved into, Curve offers a transformative financial management experience to its users.

“I am proud to have been part of the journey so far, and welcome the chance to support the company through its next, very significant period of growth.”

IDC Ventures, one of the investors in Curve’s Series C funding round, said at the time of its last major fundraising: “Thanks to their unique technology…they have the capability to intercept the transaction and supercharge the customer experience, with its Double Dip Rewards, [and] eliminating nasty hidden fees.

“And they do it seamlessly, without any need for the customer to change the cards they pay with.”

News of the talks between Lloyds and Curve comes days before Rachel Reeves, the chancellor, is expected to outline plans to bolster Britain’s fintech sector by endorsing a concierge service to match start-ups with investors.

Lord Fink declined to comment when contacted by Sky News on Saturday morning, while Curve did not respond to an enquiry sent by email.

Lloyds also declined to comment, while Stifel KBW could not be reached for comment.

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UK economy figures not as bad as they look despite GDP fall, analysts say

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UK economy figures not as bad as they look despite GDP fall, analysts say

The UK economy unexpectedly shrank in May, even after the worst of Donald Trump’s tariffs were paused, official figures showed.

A standard measure of economic growth, gross domestic product (GDP), contracted 0.1% in May, according to the Office for National Statistics (ONS).

Rather than a fall being anticipated, growth of 0.1% was forecast by economists polled by Reuters as big falls in production and construction were seen.

It followed a 0.3% contraction in April, when Mr Trump announced his country-specific tariffs and sparked a global trade war.

A 90-day pause on these import taxes, which has been extended, allowed more normality to resume.

This was borne out by other figures released by the ONS on Friday.

Exports to the United States rose £300m but “remained relatively low” following a “substantial decrease” in April, the data said.

More on Inflation

Overall, there was a “large rise in goods imports and a fall in goods exports”.

A ‘disappointing’ but mixed picture

It’s “disappointing” news, Chancellor Rachel Reeves said. She and the government as a whole have repeatedly said growing the economy was their number one priority.

“I am determined to kickstart economic growth and deliver on that promise”, she added.

But the picture was not all bad.

Growth recorded in March was revised upwards, further indicating that companies invested to prepare for tariffs. Rather than GDP of 0.2%, the ONS said on Friday the figure was actually 0.4%.

It showed businesses moved forward activity to be ready for the extra taxes. Businesses were hit with higher employer national insurance contributions in April.

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The expansion in March means the economy still grew when the three months are looked at together.

While an interest rate cut in August had already been expected, investors upped their bets of a 0.25 percentage point fall in the Bank of England’s base interest rate.

Such a cut would bring down the rate to 4% and make borrowing cheaper.

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Is Britain going bankrupt?

Analysts from economic research firm Pantheon Macro said the data was not as bad as it looked.

“The size of the manufacturing drop looks erratic to us and should partly unwind… There are signs that GDP growth can rebound in June”, said Pantheon’s chief UK economist, Rob Wood.

Why did the economy shrink?

The drops in manufacturing came mostly due to slowed car-making, less oil and gas extraction and the pharmaceutical industry.

The fall was not larger because the services industry – the largest part of the economy – expanded, with law firms and computer programmers having a good month.

It made up for a “very weak” month for retailers, the ONS said.

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UK economy remains fragile – and there are risks and traps lurking around the corner

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UK economy remains fragile - and there are risks and traps lurking around the corner

Monthly Gross Domestic Product (GDP) figures are volatile and, on their own, don’t tell us much.

However, the picture emerging a year since the election of the Labour government is not hugely comforting.

This is a government that promised to turbocharge economic growth, the key to improving livelihoods and the public finances. Instead, the economy is mainly flatlining.

Output shrank in May by 0.1%. That followed a 0.3% drop in April.

Ministers were celebrating a few months ago as data showed the economy grew by 0.7% in the first quarter.

Hangover from artificial growth

However, the subsequent data has shown us that much of that growth was artificial, with businesses racing to get orders out of the door to beat the possible introduction of tariffs. Property transactions were also brought forward to beat stamp duty changes.

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In April, we experienced the hangover as orders and industrial output dropped. Services also struggled as demand for legal and conveyancing services dropped after the stamp duty changes.

Many of those distortions have now been smoothed out, but the manufacturing sector still struggled in May.

Signs of recovery

Manufacturing output fell by 1% in May, but more up-to-date data suggests the sector is recovering.

“We expect both cars and pharma output to improve as the UK-US trade deal comes into force and the volatility unwinds,” economists at Pantheon Macroeconomics said.

Meanwhile, the services sector eked out growth of 0.1%.

A 2.7% month-to-month fall in retail sales suppressed growth in the sector, but that should improve with hot weather likely to boost demand at restaurants and pubs.

Struggles ahead

It is unlikely, however, to massively shift the dial for the economy, the kind of shift the Labour government has promised and needs in order to give it some breathing room against its fiscal rules.

The economy remains fragile, and there are risks and traps lurking around the corner.

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Is Britain going bankrupt?

Concerns that the chancellor, Rachel Reeves, is considering tax hikes could weigh on consumer confidence, at a time when businesses are already scaling back hiring because of national insurance tax hikes.

Inflation is also expected to climb in the second half of the year, further weighing on consumers and businesses.

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