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Public sector borrowing reached the second highest level for any October since records began, according to official figures, casting doubt on the prime minister’s pledge to cut debt and the chancellor’s capacity to cut taxes.

Public sector net borrowing was £14.9bn last month, £4.4bn more than the same point last year and the second highest since monthly records began in 1993, the Office for National Statistic (ONS) said.

Only once before, in the pandemic year of 2020, was a higher amount borrowed in October.

High borrowing costs, thanks to high interest rates and bond yields having neared a 15-year high, are part of the reason.

The interest payable was the highest on record for any October since such figures began being collated by the ONS.

Interest payments were £1.1bn more expensive than October last year, reaching £7.5bn. It is an even greater amount than the Office of Budget Responsibility’s (OBR) forecast of £4.9bn.

One of Prime Minister Rishi Sunak’s five promises is to reduce government debt, which arises when the state spends more money than it takes in from taxes.

Across the seven months to October 2023 debt was up £21.9bn compared with the same seven months in 2022, totalling £98.3bn.

But the sum was £16.9bn less than the £115.2bn forecast by the OBR in March.

The ONS data is the last set before the mini-budget speech to be delivered by Chancellor Jeremy Hunt in the Commons on Wednesday.

He had signalled months ago that the prospects for a series of giveaways was not in his immediate plans, despite pressure from Tory MPs for sweeteners to bolster the party’s fortunes in the polls.

However, the tune from Downing Street has changed significantly over the past few days, with Mr Sunak saying on Monday it was time for the government to “begin the next phase” of its plan and “turn our attention to cutting tax”.

It is believed some personal taxes could be cut to help boost growth and help working families with the cost of living.

At the weekend Mr Hunt also pledged to “remove the barriers that stop businesses growing”.

The chancellor had told Sky News in October that OBR’s new economic forecasts, to be revealed alongside the autumn statement, would be considerably worse than at the time of the spring budget.

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Chancellor: ‘Tax burden is too high’

Efforts to cut benefit bills and get 1.1 million classed as economically inactive into employment were revealed on Thursday last week as part of the chancellor’s Back to Work Plan.

It was the first pre-announcement of the autumn statement.

The run-up to a major fiscal event is often littered with such things – and leaks.

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Labour’s plans for the economy

Mr Hunt is facing a clamour of demands for aid – not least from charities which warn that millions of families need additional support to get them through another tough winter for household budgets.

Inflation figures last week may have shown that the pace of price increases has more than halved this year, meeting the government’s target, but bills for energy remain £1,000 above pre-pandemic levels and other essentials such as food are still rising in double-digits.

Key announcements are due on Wednesday over the government’s commitment to the pensions triple lock and whether working age benefits will rise in line with September’s inflation figure.

Read more:
Autumn statement 2023: What time is it and what could be announced?

Business aid may come in the form of tax relief.

A coalition of hospitality businesses called on the chancellor last week to freeze business rates and extend reliefs.

They argued that a fresh tax burden would force up costs and spark a flood of closures.

In response to Tuesday’s figures, Mr Hunt said: “We met our pledge to halve inflation, but we must keep on supporting the Bank of England to drive inflation down to 2%. That means being responsible with the nation’s finances.

“At my autumn statement tomorrow, I will focus on how we boost business investment and get people back into work to deliver the growth our country needs.”

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Major German bank to offer crypto trading by 2026 amid bank ‘FOMO’

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Major German bank to offer crypto trading by 2026 amid bank ‘FOMO’

Major German bank to offer crypto trading by 2026 amid bank ‘FOMO’

Sparkassen-Finanzgruppe execs once ruled out adopting crypto over concerns of volatility and risk, and the banking giant also blocked customer crypto transactions back in 2015.

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Analysts raise chance of SOL, XRP and LTC ETF approval to 95%

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Analysts raise chance of SOL, XRP and LTC ETF approval to 95%

Analysts raise chance of SOL, XRP and LTC ETF approval to 95%

Crypto ETF summer has arrived with America’s first staked Solana ETP and increased odds for other spot altcoin funds, according to analysts.

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PM faces threat of major rebellion during key vote today

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PM faces threat of major rebellion during key vote today

Sir Keir Starmer continues to face the threat of a major rebellion during a key vote on welfare reforms later – despite making last-minute concessions to disgruntled Labour MPs.

Work and Pensions Secretary Liz Kendall has confirmed that all existing claimants of the personal independence payment (PIP), the main disability benefit, will be protected from changes to eligibility.

The combined value of the standard Universal Credit allowance and the health top-up will rise “at least in line with inflation” every year of this parliament.

And an additional £300m for employment support for sick and disabled people in 2026 has been announced, which will rise every year after.

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Welfare cuts ‘needed to be made’

Ms Kendall has also promised that a consultation into PIP – “co-produced” with disabled people – will be published next autumn.

She said the U-turn on welfare cuts will cost taxpayers about £2.5bn by 2030 – less than half the £4.8bn the government had expected to save with its initial proposals.

Modelling by Ms Kendall’s own department, released yesterday, suggested the proposals would push 150,000 more people into poverty by 2030, down from the 250,000 estimated under the original plan.

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But after announcing the U-turns, Labour MPs were still publicly saying they could not back the plans as they do not go far enough to allay their concerns.

Disabilities minister Stephen Timms would not say he was “confident” the proposals would pass the Commons when asked on Sky News’ Politics Hub with Sophy Ridge.

“We’ve got a very strong package, I certainly hope it passes,” he replied.

Read more: What are the concessions to the welfare reform bill?

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‘Disabled people thrown under the bus’

A total of 86 charities united yesterday to call on MPs to reject the reforms, saying they will harm disabled people and calling it “a political choice”.

The likes of Oxfam, Child Action Poverty Group, Mind and Shelter said the bill has been brought to a vote without consulting disabled people and without any assessment “of its impact on health and employment outcomes”.

When asked to name “a single” disability organisation in favour of the reforms, Ms Kendall declined to do so.

Several Labour MPs indicated they would still vote against the changes, leaving the government in the dark over how big a rebellion it still may face.

Ms Kendall tried to allay their fears, telling MPs: “I believe we have a fair package, a package that protects existing claimants because they’ve come to rely on that support.”

Richard Burgon presented a petition to parliament yesterday evening against the cuts, signed by more than 77,000 people.

Several Labour MPs questioned why the vote was going ahead before the review into PIP is published – including Rachael Maskell, who said she could not “countenance sick and disabled people being denied support” and added: “It is a matter of conscience.”

Connor Naismith said the concessions “undoubtedly improve efforts to secure welfare reform which is fair”, but added: “Unfortunately, I do not believe these concessions yet go far enough.”

Nadia Whittome
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Labour rebel Nadia Whittome said the government was ‘ignoring’ disabled people

Nadia Whittome accused the government of “ignoring” disabled people and urged ministers to go “back to the drawing board”.

Ian Byrne told the Commons he will vote against the “cruel cuts” to disability benefits because the “so-called concessions go nowhere near far enough”.

The vote will take place this evening, with coverage on Sky News’ Politics Hub live blog and on TV.

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