UK economy returns to growth

Published

8 months ago

March 13, 2024

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Growth returned in the UK economy in January, according to official figures.

The measure of everything produced in the UK – a metric called gross domestic product (GDP) – rose 0.2%, the Office for National Statistics (ONS) said.

It’s the first official economic growth announcement since a recession was declared last month as there were two successive three-month periods of negative economic growth.

When looked at over a three month period, GDP fell 0.1% up to January, compared to the three months to October, showing the economy is still struggling.

But the overall growth in January could mean the recession is the shortest ever in UK history, if the trend continued into February and March.

The main reason the economy grew was down to the customer-facing services industry, the ONS said, which expanded 0.2% in January and makes up a large chunk of the economy. Services are the largest part of the UK economy, comprising four fifths of output.

It was also a good month for construction with output having increased 1.1% over the month. Housebuilders had a good month after being subdued for much of the last year, the ONS said.

Acting against the growth was falling TV and film production and the “often erratic pharmaceutical industry”, it added as production yields also dropped.

When broadened out over a three month period, however, building output fell 0.9% and no growth was recorded in the services sector.

The data, however, is just an estimate and is subject to revision.

Figures are routinely revised as more information becomes available. It’s possible the recession could be revised out of existence when the ONS announces February GDP sums and reassesses economic performance.

Strong retail sales had been reported for the first month of the year, of significance as they measure the largest expenditure across the UK economy.

Responding to the data, Chancellor Jeremy Hunt said:

“While the last few years have been tough, today’s numbers show we are making progress in growing the economy – part of which makes it possible to bring down national insurance contributions by £900 this coming year.

“But if we want the rate of growth to pick up more we need to make work pay which means ending the unfairness of taxing work twice.”

TUC general secretary Paul Nowak said:

“The Conservatives have turned Britain into a stagnation nation. Our economy is barely growing, real wages are still worth less than in 2008 and the only thing shooting up is household debt.”

“We need a proper economic plan to turn the country around – not just short-term Tory gimmicks. That means a real industrial strategy. And it means making sure that our fiscal framework supports government investment in our crumbling infrastructure and public services.”

Politics

Coinbase CEO to meet with Trump to discuss personnel appointments — WSJ

Published

3 hours ago

November 18, 2024

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Coinbase CEO to meet with Trump to discuss personnel appointments — WSJ

Before US Election Day, Brian Armstrong said Coinbase was “prepared to work” with either a Kamala Harris or Donald Trump administration.

Politics

Row over how many farms will be affected by inheritance tax policy – as PM doubles down ahead of farmers protest

Published

4 hours ago

November 18, 2024

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Row over how many farms will be affected by inheritance tax policy - as PM doubles down ahead of farmers protest

Sir Keir Starmer has insisted the “vast majority of farmers” will not be affected by changes to Inheritance Tax (IHT) ahead of a protest outside parliament on Tuesday.

It follows Chancellor Rachel Reeves announcing a 20% inheritance tax that will apply to farms worth more than £1m from April 2026, where they were previously exempt.

But the prime minister looked to quell fears as he resisted calls to change course.

Speaking from the G20 summit in Brazil, he said: “If you take a typical case of a couple wanting to pass a family farm down to one of their children, which would be a very typical example, with all of the thresholds in place, that’s £3m before any inheritance tax is paid.”

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The comments come as thousands of farmers, including celebrity farmer Jeremy Clarkson, are due to descend on Whitehall on Tuesday to protest the change.

And 1,800 more will take part in a “mass lobby” where members of the National Farmers’ Union (NFU) will meet their MPs in parliament to urge them to ask Ms Reeves to reconsider the policy.

Speaking to broadcasters, Sir Keir insisted the government is supportive of farmers, pointing to a £5bn investment announced for them in the budget.

He said: “I’m confident that the vast majority of farms and farmers will not be affected at all by that aspect of the budget.

“They will be affected by the £5bn that we’re putting into farming. And I’m very happy to work with farmers on that.”

Sir Keir’s spokesman made a similar argument earlier on Monday, saying the government expects 73% of farms to not be affected by the change.

Environment, Farming and Rural Affairs Secretary Steve Reed said only about 500 out of the UK’s 209,000 farms would be affected, according to Treasury calculations.

However, that number has been questioned by several farming groups and the Conservatives.

Government figures ‘misleading’

The NFU said the real number is about two-thirds, with its president Tom Bradshaw calling the government’s figures “misleading” and accusing it of not understanding the sector.

The Country Land and Business Association (CLA) said the policy could affect 70,000 farms.

Conservative shadow farming minister Robbie Moore accused the government last week of “regurgitating” figures that represent “past claimants of agricultural property relief, not combined with business property relief” because he said the Treasury does not have that data.

Agricultural property relief (APR) currently provides farmers 100% relief from paying inheritance tax on agricultural land or pasture used for rearing livestock or fish, and can include woodland and buildings, such as farmhouses, if they are necessary for that land to function.

Farmers can also claim business property relief (BPR), providing 50% or 100% relief on assets used by a trading business, which for farmers could include land, buildings, plant or machinery used by the business, farm shops and holiday cottages.

APR and BPR can often apply to the same asset, especially farmed land, but APR should be the priority, however BPR can be claimed in addition if APR does not cover the full value (e.g. if the land has development value above its agricultural value).

Mr Moore said the Department for the Environment, Farming and Rural Affairs (DEFRA) and the Treasury have disagreed on how many farms will be impacted “by as much as 40%” due to the lack of data on farmers using BPR.

Lib Dem MP Tim Farron said last week1,400 farmers in Cumbria, where he is an MP, will be affected and will not be able to afford to pay the tax as many are on less than the minimum wage despite being asset rich.

Politics

Cabinet split over assisted dying as Education Secretary Bridget Phillipson latest to reveal she will vote against bill

Published

4 hours ago

November 18, 2024

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Cabinet split over assisted dying as Education Secretary Bridget Phillipson latest to reveal she will vote against bill

A split is emerging in the cabinet, with Education Secretary Bridget Phillipson revealing she will join several of her colleagues and vote against the bill to legalise assisted dying.

Ms Phillipson told Sky News she will vote against the proposed legislation at the end of this month, which would give terminally ill people with six months to live the option to end their lives.

She voted against assisted dying in 2015 and said: “I haven’t changed my mind.

“I continue to think about this deeply. But my position hasn’t changed since 2015.”

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MPs will be given a free vote on the bill, so they will not be told how to vote by their party.

The topic has seen a split in the cabinet – however, Prime Minister Sir Keir Starmer has yet to reveal how he will vote on 29 November.

Ms Phillipson joins some other big names who have publicly said they are voting against the bill

These include Deputy PM Angela Rayner, Health Secretary Wes Streeting, Justice Secretary Shabana Mahmood and Business Secretary Jonathan Reynolds.

Border security minister Angela Eagle is also voting against the bill.

Senior cabinet members voting in favour of assisted dying include Energy Secretary Ed Miliband, Science Secretary Peter Kyle, Work and Pensions Secretary Liz Kendall, Culture Secretary Lisa Nandy, Northern Ireland Secretary Hilary Benn, Transport Secretary Louise Haigh and Welsh Secretary Jo Stevens.

The split over the issue is said to be causing friction within government, with Sir Keir rebuking the health secretary for repeatedly saying he is against the bill and for ordering officials to review the costs of implementing any changes in the law.

Sky News’ deputy political editor Sam Coates has been told Morgan McSweeney, the PM’s chief of staff, is concerned about the politics of the bill passing.

He is understood to be worried the issue will dominate the agenda next year and, while he is not taking a view on the bill, he can see it taking over the national conversation and distracting from core government priorities like the economy and borders.

Details of the bill were published last week and include people wanting to end their life having to self-administer the medicine.

It would only be allowed for terminally ill people who have been given six months to live.

Two independent doctors would have to confirm a patient is eligible for assisted dying and a High Court judge would have to give their approval before it could go ahead.