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The culture secretary will on Thursday launch a probe into the takeover of The Daily Telegraph by a state-backed Abu Dhabi-based fund.

Sky News has learnt that Lucy Frazer plans to issue a Public Interest Intervention Notice (PIIN) that will trigger an inquiry by Ofcom and the Competition and Markets Authority into RedBird IMI’s prospective ownership of the newspaper within hours.

Sources said there was a small chance that the PIIN’s publication could be delayed until Friday, but was “overwhelmingly likely” to be issued today.

The PIIN will not prevent Lloyds Banking Group receiving a £1.16bn loan repayment – funded by RedBird IMI – from the Barclay family, the long-standing owners of the Telegraph and Spectator magazine, according to one City source.

Ms Frazer’s move will kickstart a months-long process which will either result in the Telegraph becoming part of a fund part-owned by Sheikh Mansour bin Zayed Al Nahyan, a member of Abu Dhabi’s royal family and owner of Manchester City, or reignite an auction of two of the country’s most influential newspapers.

On Wednesday, Lloyds wrote to the Department for Culture, Media and Sport (DCMS) to notify officials that the Barclay family will repay a £1.16bn loan to it in the coming days.

The notice – which had been demanded by Ms Frazer last week – means that the funds will be transferred to Lloyds as early as Friday, or at the start of next week.

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That would trigger the dissolution of a court hearing in the British Virgin Islands to liquidate a Barclay family company tied to the newspaper’s ownership, and temporarily put the Barclays back in control of their shares in the broadsheet title.

Lucy Frazer, Secretary of State for Culture, Media, and Sport, arrives at 10 Downing Street, London, for a Cabinet meeting. Picture date: Tuesday July 4, 2023.
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Lucy Frazer

However, a formal hold separate notice, which had been considered by Whitehall to guarantee the independence of the Telegraph during the PIIN process, is not expected to form part of Thursday’s announcement, sources said.

Instead, an agreement will be put in place to ensure the independent governance of the titles during the process, they added.

Lloyds wrote to government officials last Thursday to say it would support the retention of a trio of independent directors, led by the Openreach chairman Mike McTighe, while a public interest inquiry is carried out.

RedBird IMI, which is led by the former CNN president Jeff Zucker, intends to take control of the Daily and Sunday Telegraph by converting a £600m chunk of its loan to the Barclays into equity.

The fund’s offer to fund the loan redemption has circumvented an auction of the Telegraph titles which has drawn interest from a range of bidders.

Last week, Mr Zucker, who Sky News revealed was spearheading the deal, told the Financial Times that competing bidders were “slinging mud”.

“There’s a reason that people are slinging mud and throwing darts – [it’s] because they want to own these assets,” he told the newspaper.

“And they have their own media assets to try to hurt us.”

The battle for control of The Daily Telegraph has rapidly turned into a complex commercial and political row which has raised tensions between the DCMS and the Foreign Office over Britain’s receptiveness to foreign investment.

Prospective bidders led by the hedge fund billionaire and GB News shareholder Sir Paul Marshall have been agitating for the launch of a PIIN.

Sky News revealed last week that Ed Richards, the former boss of media regulator Ofcom, is acting as a lobbyist for RedBird IMI through Flint Global, which was co-founded by Sir Simon Fraser, former Foreign Office permanent secretary.

The Telegraph auction, which has also drawn interest from the Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, has now been paused until next month.

The original bid deadline had been shifted from 28 November to 10 December to take account of the possibility that Lloyds might be repaid in full by the Barclay family by December 1.

That bid deadline is now likely to be cancelled.

The Barclays have made a series of increased offers in recent months to head off an auction of the newspapers they bought nearly 20 years ago, raising its proposal last month to £1bn.

Until June, the newspapers were chaired by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who along with his late twin Sir David engineered the takeover of the Telegraph in 2004.

Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank’s rescue during the 2008 banking crisis.

A government spokesman declined to comment.

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IMF upgrades UK economic growth forecast – but issues tariffs warning

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IMF upgrades UK economic growth forecast - but issues tariffs warning

The UK economy will grow more than previously thought, according to the International Monetary Fund (IMF), which has upgraded its latest forecast.

It also said the Bank of England should “continue to ease monetary policy gradually”, indicating it expected further reductions in interest rates.

But it warned trade tensions linked to US tariff plans will reduce UK economic growth next year.

The Washington-based UN financial agency said the UK economy will expand 1.2% this year and “gain momentum next year”.

The upgrade in forecasts, however, is slight, up from an expected 1.1% announced in April as the world reeled from the global trade war sparked by US President Donald Trump’s tariffs.

That April figure was a 0.5% downgrade from the projected 1.6% growth for 2025 the IMF foresaw in January and the 1.5% forecast issued in October.

It means the IMF expects the UK economy to grow less this year than it forecast in October and January.

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Tariffs warnings

This anticipated lower growth is largely due to tariffs – taxes on goods imported to the United States – and the uncertainty caused by shifting trade policy in the US, the world’s largest economy.

While many tariffs have been paused until 8 July, it’s unclear if deals will be in place by then and if pauses may be extended.

The effect of this has been quantified as a 0.3 percentage points lower growth by 2026 in the UK, the IMF said.

The organisation held its prediction that the UK economy will grow by 1.4% in 2026.

“The forecast assumes that global trade tensions lower the level of UK GDP by 0.3% by 2026, due to persistent uncertainty, slower activity in UK trading partners, and the direct impact of remaining US tariffs on the UK,” it said.

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It comes despite the UK having agreed a deal with the Trump administration to circumvent the 25% tariffs on cars and metals.

The IMF also cautioned that “weak productivity continues to weigh on medium-term growth prospects”.

Lower productivity has been an issue since the global financial crash of 2008-2009, but has been caused by “chronic under-investment”, low private sector research and development, limited access to finance for businesses to expand, skill gaps, and a “deterioration in health outcomes”, it said.

Interest rates

Interest rates “should” continue to come down, making borrowing cheaper, though the IMF acknowledged rate-setters at the Bank of England now have a “more complex” job due to the recent rise in inflation and “fragile” growth.

The author of the report on the UK, Luc Eyraud, said the IMF expected the Bank to cut interest rates by 0.25 percentage points every three months until they reach a level of around 3%, down from the current 4.25%.

Praise was given to the UK government as the IMF said “fiscal plans strike a good balance between supporting growth and safeguarding fiscal sustainability”.

“After a slowdown in the second half of 2024, an economic recovery is under way,” the IMF said.

Global factors – “weaker export performance in the challenging global environment” – are blamed for the slowdown last year.

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The news is being taken as a win by Chancellor Rachel Reeves.

“The UK was the fastest growing economy in the G7 for the first three months of this year and today the IMF has upgraded our growth forecast,” she said.

“We’re getting results for working people through our plan for change – with three new trade deals protecting jobs, boosting investment and cutting prices, a pay rise for three million workers through the national living wage, and wages beating inflation by £1,000 over the past year.”

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What is the two-child benefit cap and will Labour scrap it?

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What is the two-child benefit cap and will Labour scrap it?

The government is considering getting rid of the two-child benefit cap first brought in by the Conservatives.

The policy has caused considerable consternation within the Labour Party, with a growing number of MPs calling to scrap it and ministers so far refusing to.

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But now, Education Secretary Bridget Phillipson has given the government’s strongest hint yet it may scrap the cap after she told Sky News ministers are “considering” lifting it.

We look at what the cap is and the controversy over it.

What is the two-child benefit cap?

Since 2017, parents have only been able to claim child tax credit and universal credit for their first two children, if they were born after April 2017.

An exception is made for children born as a result of rape.

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Child benefit reform ‘not off the table’

Who introduced it?

Then work and pensions secretary Iain Duncan Smith first proposed the policy in 2012 under the Conservative-Liberal Democrat coalition government.

It was not until 2015 that then chancellor George Osborne announced a cap would be introduced from the 2017/2018 financial year.

The coalition said it made the system fairer for taxpayers and ensured households on benefits faced the same financial choices around having children as those not on benefits.

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David Cameron on the 2015 campaign trail
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David Cameron’s government introduced the cap, though he was out of office by the time it came in

What is Labour’s position on the cap?

The party has long been divided over the issue, with Sir Keir Starmer ruling out scrapping the cap in 2023.

He then said Labour wanted to remove it, but only when fiscal conditions allowed.

Following Labour’s landslide victory last July, the prime minister refused to bow to pressure within his party, and suspended seven MPs for six months for voting with the SNP to scrap the cap.

Ministers have toed the party line for months, but the narrative started to shift in May, with Sir Keir reported to have asked the Treasury to see how scrapping it could be funded.

The publication of Labour’s child poverty strategy was delayed from the spring to autumn, fuelling speculation the government wants to use the next budget to scrap the cap.

Then the education secretary told Sky News on 27 May lifting the cap is “not off the table” – and “it’s certainly something that we’re considering”.

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Why did Labour delay their child poverty strategy?

How many children does the cap affect?

Government figures show one in nine children (1.6m) are impacted by the two-child limit.

In the first three months Labour were in power, 10,000 children were pulled into poverty by the cap, the Child Poverty Action Group found.

In May, it said another 109 children are pulled into poverty each day by the limit, adding to the 4.5 million already in poverty.

The Resolution Foundation said the cap would increase the number of children in poverty to 4.8 million by the next election in 2029-30.

Torsten Bell, the foundation’s former chief executive and now a Labour Treasury minister, said scrapping the cap would lift 470,000 children out of poverty.

Torsten Bell.
Pic: Dimitris Legakis/Athena Pictures/Shutterstock
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Torsten Bell has warned against keeping the cap. Pic: Dimitris Legakis/Athena Pictures/Shutterstock

How much would lifting the cap cost the taxpayer?

The cap means for every subsequent child after the first two, families cannot claim benefits worth £3,455 a year, according to the Institute for Government.

It estimates removing the limit would cost the government about £3.4bn a year – equal to roughly 3% of the total working-age benefit budget.

It is also approximately the same cost as freezing fuel duties for the next parliament.

Research has found the indirect fiscal impacts of lifting the cap could be higher, as some data shows investing in young children can pay for itself by causing better outcomes for them later in life.

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Donald Trump says he will postpone 50% tariffs on EU until July

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Donald Trump says he will postpone 50% tariffs on EU until July

Donald Trump says he will delay the imposition of 50% tariffs on goods entering the United States from the European Union until July, as the two sides attempt to negotiate a trade deal.

It comes after the president of the European Commission, Ursula von der Leyen, said in a post on social media site X that she had spoken to Mr Trump and expressed that they needed until 9 July to “reach a good deal”.

The US president had last Friday threatened to bring in the 50% tariffs from 1 June, as European leaders said they were ready to respond with their own measures.

But Mr Trump has now said that date has been put back to 9 July to allow more time for negotiations with the 27-member bloc, with the phone call appearing to smooth over tensions for now at least.

Speaking on Sunday before boarding Air Force One for Washington DC, Mr Trump told reporters that he had spoken to Ms Von der Leyen and she “wants to get down to serious negotiations” and she vowed to “rapidly get together and see if we can work something out”.

The US president, in comments on his Truth Social platform, had reignited fears last Friday of a trade war between the two powers when he said talks were “going nowhere” and the bloc was “very difficult to deal with”.

Mr Trump told the media in Morristown, New Jersey, on Sunday that Ms Von der Leyen “just called me… and she asked for an extension in the June 1st date. And she said she wants to get down to serious negotiation”.

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“We had a very nice call and I agreed to move it. I believe July 9th would be the date. That was the date she requested. She said we will rapidly get together and see if we can work something out,” the US president added.

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Shortly after, he wrote on Truth Social: “I agreed to the extension – July 9, 2025 – It was my privilege to do so.”

On his so-called “liberation day” last month, Mr Trump unleashed tariffs on many of America’s trade partners. But since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.

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Much of his most incendiary rhetoric on trade has been directed at Brussels, though, even going as far as to claim the EU was created to rip the US off.

Responding to his 50% tariff threat, EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.

“We stand ready to defend our interests.”

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