A massive election – well, two massive elections on either side of the Atlantic, and more elsewhere around the planet – followed by changes of government and plenty of economic milestones along the way. So let’s remind ourselves of some of the big moments of the year, in chart form.
We begin with the big economic picture. Growth. This time last year, the UK was (unbeknownst to us at the time) actually in recession. The news was only confirmed in the spring of this year, but for two successive quarters in the second half of last year, economic growth fell.
What’s equally intriguing is what happened next: a rapid bounce-back as gross domestic product increased by more than expected in the first two quarters of the year. Since then, it has tailed off markedly, causing some consternation in the Treasury.
Indeed, an initial estimate of 0.1 per cent growth in the third quarter of 2024 was revised down to zero growth – stagnation.
Still, interest rates are now finally on the way down. They were cut in August for the first time following the cost of living crisis, and are expected to fall further next year. However, the scale of those expected falls is considerably smaller now than before the Budget. Why? Because the government is planning to borrow and spend considerably more next year.
And while Labour insists this will not be visible on your pay check – and hence isn’t breaking their pre-election pledge – we will, as a nation, be paying considerably more in taxes as a result. Indeed, the tax burden, the total amount of tax incurred by the population as a percentage of GDP, is now heading up to the highest level on record. This is, it’s worth saying, a stark contrast with the costed measures Labour put in their manifesto.
Image: *There were two general elections in 1974 – in February and October
That brings us to the election itself – an election in which Labour rode to an extraordinary landslide, winning more than 400 seats for the first time since the glory days of Tony Blair. It represented an immense comeback for the party, following such a drubbing in 2019. However, there are some important provisos to note.
Chief among them is the fact that the party won the smallest share of the vote of any winning party in the modern era. This was not a landslide victory in terms of overall popular support.
Among the issues that has resounded this year, both before the election and after, was migration. This time last year the data suggested that net migration into the UK had peaked at just over 750,000.
But then, last month, new data brought with it a shocking revision. In fact, the Home Office had both undercounted the number of people coming into the country and overcounted the number leaving. The upshot was a new figure: in fact 906,000 more people had entered than departed in the year to last summer. Not just a new record – a totally gobsmacking figure.
The vast, vast majority of that migration was not the “small boats” so much has been made of but legal migration, more or less equally divided between work and study. It was to some extent the consequence of the post-COVID bounceback and, even more so, changes in government policy as post-Brexit migration rules came into force.
Another issue which came to light throughout the year was something else: the leakiness of Britain’s sanctions regime with Russia. While government ministers like to boast about how this is the toughest regime on Russia in history, our analysis found that sanctioned British goods are routinely being shipped into Russia via its neighbours in the Caucasus and Central Asia.
In a series of investigations, we tracked how this carousel works for the trade of cars, which get sent to countries like Azerbaijan before being shuffled around the Caucasus and entering Russia via Georgia and other routes. But that same carousel is likely being used for equipment like drone parts and radar equipment. We know it’s being sent to Russian neighbours. We know it’s ending up on the battlefield. The data tells a stark story about the reality of the sanctions regime – and helps illustrate how Russia is continuing to keep its forces armed and equipped with components from the West.
Marks & Spencer (M&S) has ordered hundreds of agency workers at its main distribution centre to stay at home as it grapples with the unfolding impact of a cyberattack on Britain’s best-known retailer.
Sky News has learnt that roughly 200 people who had been due to undertake shift work at M&S’s vast Castle Donington clothing and homewares logistics centre in the East Midlands have been told not to come in amid the escalating crisis.
Agency staff make up about 20% of Castle Donington’s workforce, according to a source close to M&S.
The retailer’s own employees who work at the site have been told to come in as usual, the source added.
“There is work for them to do,” they said.
M&S disclosed last week that it was suspending online orders as a result of the cyberattack, but has provided few other details about the nature and extent of the incident.
In its latest update to investors, the company said on Friday that its product range was “available to browse online, and our stores remain open and ready to welcome and serve customers”.
“We continue to manage the incident proactively and the M&S team – supported by leading experts – is working extremely hard to restore online operations and continue to serve customers well,” it added.
It was unclear on Monday how long the disruption to M&S’s e-commerce operations would last, although retail executives said the cyberattack was “extensive” and that it could take the company some time to fully resolve its impact.
Shares in M&S slid a further 2.4% on Monday morning, following a sharp fall last week, as investors reacted to the absence of positive news about the incident.
At that price, the company’s founder and chief executive, Will Shu, would be in line for a windfall of more than £170m.
Deliveroo further announced, before trading on Monday, that it had suspended its £100m share buyback programme.
The opening share price reaction took the value to 171p per share – still shy of the 180p on the table – and well under the 390p per share flotation price seen in 2021.
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Deliveroo’s shares have weakened nearly 50% since their market debut.
The deal is not expected to face regulatory hurdles as it provides DoorDash access to 10 new markets where it currently has no presence.
But a takeover would likely represent a blow to the City of London given the anticipated loss of a tech-focused player.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “If the deal is done at that price, the company will fail to shake off the ‘Floperoo’ tag it was saddled with after its disastrous IPO debut in 2021.
“Even though Deliveroo has finally broken through into profitable territory, the prolonged bout of indigestion around its share price has continued.
“The surge in demand for home deliveries during the pandemic waned just as competition heated up. Deliveroo’s foray into grocery deliveries has helped it turn a profit but it’s still facing fierce rivals.”
She added: “The DoorDash Deliveroo deal will be unappetising for the government which has been trying to boost the number of tech companies listed in London.
“If Deliveroo is purchased it would join a stream of companies leaving the London Stock Exchange, with too few IPOs [initial public offerings] in the pipeline to make up the numbers.”
A trade deal with the US is “possible” but not “certain”, a senior minister has said as he struck a cautious tone about negotiations with the White House.
Pat McFadden, the Chancellor of the Duchy of Lancaster, told Sunday Morning with Trevor Phillips there was “a serious level of engagement going on at high levels” to secure a UK-US trade deal.
However, Mr McFadden, a key ally of Sir Keir Starmer, struck a more cautious tone than Chancellor Rachel Reeves on the prospect of a US trade deal, saying: “I think an agreement is possible – I don’t think it’s certain, and I don’t want to say it’s certain, but I think it’s possible.”
He went on to say the government wanted an “agreement in the UK’s interests” and not a “hasty deal”, amid fears from critics that Number 10 could acquiesce a deal that lowers food standards, for example, or changes certain taxes in a bid to persuade Donald Trump to lower some of the tariffs that have been placed on British goods.
And asked about the timing of the deal – following recent reports an agreement was imminent – Mr McFadden said: “We’ll keep working with the United States and keep trying to get to an agreement in the coming weeks.”
As well as talks with the US, the UK has also ramped up its efforts with the EU, with suggestions it could include a new EU youth mobility scheme that would allow under-30s from the bloc to live, work and study in the UK and vice versa.
Mr McFadden said he believed the government could “improve upon” the Brexit deal struck by Boris Johnson, saying it had caused “an awful lot of bureaucracy and costs here in the UK”.
He said “first and foremost” on the government’s agenda was securing a food and agriculture and a veterinary agreement, saying it was “such an important area for the UK and an area where we’ve had so much extra cost and bureaucracy because of Brexit”.
He added: “But again, as with the United States, there’s no point in calling the game before it’s done. We’ve still got work to do, and we’re doing that work with our partners in the EU.”
The Cabinet Office minister also rejected suggestions the UK would have to choose between pursuing a trade deal with the US and one with the EU – the latter of which has banned chlorinated chicken in its markets – as has the UK – but which the US has historically wanted.
On the issue of chlorinated chicken, Mr McFadden said the government had “made clear we will not water down animal welfare standards with either party”.
“But I don’t agree that it’s some fundamental choice beyond where we have to pick one trading partner rather than another. I think that’s to misunderstand the nature of the UK economy, and I don’t think would be in our interests to put all our eggs in one basket.”
Also speaking to Trevor Phillips was Tory leader Kemi Badenoch, who said the government should be close to closing the deal with the US “because we got very close last time President Trump was in office”.
She also insisted food standards should not be watered down in order to get a deal, saying she did not reach an agreement with Canada when she was in government for that reason.
“What Labour needs to do now is show that they can get a deal that isn’t making concessions, so we can have what we had last month before the trade tariffs, and we need serious people doing this,” she said.