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Budgets are all about numbers.

In the coming 24 hours, we’ll be engulfed with all sorts of figures – about the state of the economy, about the size of the deficit, about the fiscal rules the new chancellor is planning to introduce in the coming months.

But in fact most budgets, this one included, can really be boiled down to the difference between two big numbers.

Politics live blog: Budget 2024 latest developments

Total government spending and total government receipts.

Right now the UK government is spending just over £1.2trn a year and bringing in just over £1.1trn in taxes and receipts.

In other words, this country is spending more than it generates in tax receipts.

So it has to borrow the difference.

That borrowing, also known as the deficit, is (as you’ve already probably worked out from the above numbers) around £100bn a year.

And politicians, including the chancellor, spend rather a lot of time fretting about the deficit.

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Indeed, the main objective of the various different fiscal rules they’ve imposed on themselves in recent decades has been to narrow the gap between those two big numbers.

Broadly speaking, the easiest way to do this is to cut something few people notice in the short run – government investment.

When he came into office in 2010, George Osborne cut a lot of parts of public spending, but he absolutely slashed the amount the public sector spent on buildings, infrastructure and machinery – capital spending.

Having lifted the total briefly after the pandemic, Jeremy Hunt was planning a similar fall in investment in the coming years.

Rachel Reeves has said repeatedly ahead of the budget that she plans to invest far more in the coming years.

This is a noble goal, given investment tends to benefit future generations, however, it will not be cheap in the short run.

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Indeed, keeping investment spending at current levels will cost roughly £30bn a year by the end of this decade.

So how does the chancellor square that with her fiscal rules?

Well, one part of the answer is that she’s planning to increase the revenues coming into the Exchequer, reportedly via higher national insurance charges for insurers.

But the other part of the answer is that she’s changing her fiscal rules as well.

Budget 2024: Rachel Reeves vs the fiscal rules

The long and the short of it is that Ms Reeves looks likely to choose a set of fiscal rules that ignore investment spending.

Both her updated debt rule and her current budget rule essentially omit capital spending – although they include debt interest costs, so she can’t just borrow willy-nilly.

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That might sound like fiscal jiggery-pokery, and some in the market fret that investors will soon take fright as a result.

Indeed, some suggest they already are, and point to the fact the UK’s cost of government borrowing – as measured by the benchmark 10-year bond yield – has risen from under 4% to nearly 4.3% in the past month alone.

However, this is a slight misreading of this market, which is as affected by global economic factors and central bank action as much as by UK budgetary policy.

Indeed, compare the recent changes in the UK’s borrowing rates with those in Germany and the US and British government bond yields are close to where they usually trade in the run up to a budget.

And they are far, far below where they were in the run-up to Liz Truss’s mini-budget.

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Even so, there are bound to be a few unexpected surprises and some relevant new data points in this fiscal event.

It is a budget after all.

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Advertising mogul Sorrell approached about S4 Capital deal

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Advertising mogul Sorrell approached about S4 Capital deal

Sir Martin Sorrell, the advertising mogul, has received a number of merger approaches for S4 Capital, the London-listed marketing services group he founded seven years ago.

Sky News can reveal that Sir Martin has been contacted in recent weeks by potential suitors including One Equity Partners, a US-based private equity firm which focuses on acquiring companies in the healthcare, industrials, and technology sectors.

This weekend, analysts suggested that One Equity would seek to combine S4 Capital with MSQ, a creative and technology agency group it bought in 2023.

Further details of the possible tie-up were unclear on Saturday, including whether a formal proposal had been made or whether S4 Capital might remain listed on the London Stock Exchange if a deal were to be completed.

S4 Capital is also understood to have attracted recent interest from other parties, the identities of which could not be immediately established.

In March 2024, the Wall Street Journal reported that Sir Martin had rebuffed several offers from Stagwell, an advertising group led by Mark Penn, a former adviser to President Bill Clinton.

New Mountain Capital, another American private equity firm, was also said at the time to have held talks about buying parts or all of S4 Capital.

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News of One Equity’s approach puts the venture founded by one of Britain’s most prominent business figures firmly in play after a torrid period in which it has been buffeted by macroeconomic headwinds and a number of accounting issues.

Sir Martin founded S4 Capital in 2018, months after his unexpected and acrimonious departure from WPP, the group he transformed from a manufacturer of wire baskets into the world’s largest provider of marketing services.

The businessman, who has voting control at S4 Capital, used his deep network of institutional relationships to raise money for an acquisition spree at S4, which included technology-focused agencies such as MediaMonks and MightyHive.

S4’s clients now include Alphabet, Amazon, General Motors, Meta, T-Mobile, and Walmart.

Sir Martin’s decision to target acquisitions in the digital content and programmatic media arenas reflected the priorities of what he described as a marketing services group for a new era.

At WPP, he was the architect of a now-widely replicated strategy to assemble hundreds of agency brands under one holding company.

By the time he stepped down, WPP was the owner of creative agency networks such as JWT and Ogilvy, while its media-buying muscle was channelled through the global subsidiary GroupM.

The latest approaches for S4 Capital come during a period of profound change in the global marketing services industry, as artificial intelligence dismantles practices and creative processes that had evolved over decades.

Sir Martin has spurned few opportunities to criticise his successor at WPP, Mark Read, as well as the wider advertising industry, in the seven years since he established S4 Capital.

Last month, WPP announced that Mr Read would be replaced by Cindy Rose, a senior Microsoft executive who has sat on the company’s board as a non-executive director since 2019.

“Cindy has supported the digital transformation of large enterprises around the world – including embracing AI to create new customer experiences, business models and revenue streams,” the WPP chairman, Philip Jansen, said.

“Her expertise in this landscape will be hugely valuable to WPP as the industry navigates fundamental changes and macroeconomic uncertainty.”

WPP has also forfeited its status as the world’s largest marketing services empire to Publicis, and will be shunted even further behind the sector’s biggest players once Omnicom Group’s $13.25bn (£9.85bn) takeover of Interpublic Group is completed.

At the time of Sir Martin’s exit from WPP in April 2018, the company had a market capitalisation of more than £16bn.

On Friday, its market value at its closing share price of 367.5p was just £4.23bn.

Last month, the advertising industry news outlet Campaign reported that WPP had held tentative discussions with the consulting firm Accenture about a potential combination or partnership, underscoring the pressure on legacy marketing services groups.

This weekend, it remained unclear how likely it was that Sir Martin would consummate a deal to combine S4 Capital with another industry player such as One Equity-owned MSQ.

Shares in S4 Capital closed on Friday at 21.2p, giving the company a market capitalisation of £140m.

The stock has fallen by nearly 60% during the last 12 months, and is more than 90% lower than its peak in 2022.

At one point, Sir Martin’s stake in S4 Capital was valued at close to £500m.

A spokeswoman for S4 declined to comment, while a spokesman for One Equity Partners said by email: “OEP is not commenting on this matter.”

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Visma owners close to picking banks for £16bn London float

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Visma owners close to picking banks for £16bn London float

The owners of Visma, one of Europe’s biggest software companies, are close to hiring bankers for a £16bn flotation that would rank among the London market’s biggest for years.

Sky News understands that Visma’s board and shareholders have convened a beauty parade of investment banks in the last fortnight ahead of an initial public offering (IPO) likely to take place in 2026.

Citi, Goldman Sachs, JP Morgan and Morgan Stanley are understood to be among those in contention for the top roles on the deal, City insiders said on Friday.

Several banks are expected to be appointed as global coordinators on the IPO as soon as this month.

Visma is a Norwegian company which supplies accounting, payroll, HR and other business software to well over one million small business customers.

It has grown at a rapid rate in recent years, both organically and through scores of acquisitions, and has seen its profitability and valuation rise substantially during that period.

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The business is now valued at about €19bn (£16.4bn) and is partly owned by a number of sovereign wealth funds and other private equity firms.

The majority of the company is owned by Hg, the London-based private equity firm which has backed a string of spectacularly successful companies in the software industry.

Visma’s owners’ decision to pick the UK ahead of competition from Amsterdam represents a welcome boost to the City amid ongoing questions about the attractiveness of the London stock market to international companies.

Rachel Reeves, the chancellor, used last month’s speech at Mansion House to launch a taskforce aimed at generating additional IPO activity in the UK.

Spokespeople claiming to represent Visma at Kekst, a communications firm, did not respond to a series of enquiries about the IPO appointments.

Hg also failed to respond to a request for comment.

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Carlyle to seize control of online retailer Very Group from Barclay family

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Carlyle to seize control of online retailer Very Group from Barclay family

The American investment giant Carlyle is preparing to take control of Very Group, one of Britain’s biggest online retailers, in a deal that will end the Barclay family’s long tenure at another major UK company.

Sky News has learnt that Carlyle, which is the biggest lender to Very Group’s immediate parent company, could assume ownership of the retailer as soon as October under the terms of its financing arrangements.

On Friday, sources said that Carlyle was expected to hold further talks in the coming weeks with fellow creditors including IMI, the Abu Dhabi-based vehicle which assumed part of Very Group’s debts in a complex deal related to ownership of the Telegraph newspaper titles.

Carlyle will probably end up holding a majority stake in Very Group, which has about 4.5 million customers, once it exercises a ‘step-in right’ which effectively converts its debt into equity ownership, the sources said.

Very Group – which is chaired by the former Conservative chancellor Nadhim Zahawi – borrowed a further £600m from Arini, a Mayfair-based fund, earlier this year as it sought to stave off a cash crunch and buy itself breathing space.

Precise details of the company’s capital and ownership structure will be thrashed out before the change of control rights are triggered at the beginning of October.

The Barclay family drew up plans to hire bankers to run an auction of Very Group earlier this year, but a process was never formally launched.

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Carlyle, which declined to comment, may hold onto the business for a further period before looking to offload it.

IMI is also likely to end up with an equity stake or a preferred position in the recapitalised company’s debt structure, sources added.

Prospective bidders for Very Group were expected to be courted on the basis of its technology-driven financial services arm as well as the core retail offering which sells everything from electrical goods to fashion.

Retail industry insiders have long speculated that the business was likely to be valued in the region of £2.5bn – below the valuation which the Barclay family was holding out for in an auction which took place several years ago.

Very Group – previously known as Shop Direct – is one of the UK’s biggest online shopping businesses, owning the Very and Littlewoods brands and employing 3,700 people.

It boasts well over £2bn in annual sales, with about one-fifth of that generated by its Very Finance consumer lending arm.

Mr Zahawi was appointed as the company’s chairman last year, days after he announced that he was standing down as the MP for Stratford-on-Avon at July’s general election.

He replaced Aidan Barclay, a senior member of the family which has owned the business for decades.

In the 39 weeks to 29 March, Very Group reported a 3.8% fall in revenue to £1.67bn, which it said included “a decrease in Littlewoods revenue of 15.1%, reflecting the ongoing managed decline of this business”.

Nevertheless, it said sales in its home and sports categories were performing strongly.

IMI’s position is expected to be pivotal to the talks about the future of the business, given Abu Dhabi’s status as an important global backer of buyout, credit and infrastructure funds such as those raised and managed by Carlyle.

The UAE vehicle is expected to emerge from the protracted saga over the Telegraph’s ownership with a 15% stake in the newspapers.

Under the original deal struck in 2023, RedBird and IMI paid a total of £1.2bn to refinance the Barclay family’s debts to Lloyds Banking Group, with half tied to the media assets and the other half – solely funded by IMI – secured against other family assets including part of Very Group’s debt pile.

The Barclays, who used to own London’s Ritz hotel, have already lost control of other corporate assets including the Yodel parcel delivery service.

A spokesman for Very Group declined to comment, while IMI also declined to comment.

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