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Here are the key points from Chancellor Rishi Sunak’s budget speech:

Economy - graphic for rolling budget coverage 27 October

• The chancellor says there are “challenging” months ahead, adding that inflation in September was 3.1% and is likely to rise further – the OBR expect it to average 4% over the next year

• Pressures caused by supply chains and energy crisis will “take months to ease”.

• Economy to return to its pre-COVID level at the turn of the year – an improvement on OBR forecasts revealed in March

• Economy expected to grow by 6% in 2022, and 2.1%, 1.3% and 1.6% over the next three years

• In July last year, at the height of the pandemic, unemployment was expected to peak at 12% but the OBR now expect it to peak at 5.2%

• Compared to 2020, wages have grown by 3.4%

Debt and borrowing - graphic for rolling budget coverage 27 October

• Underlying debt is forecast to be 85.2% of GDP this year

• It will reach 85.4% in 2022-23, before peaking at 85.7% in 2023-24

• It then falls in the final three years of the forecast from 85.1% to 83.3%

• Total departmental spending over this parliament will increase by £150bn, growing by 3.8% a year in real terms

NHS - graphic for rolling budget coverage 27 October

• Spending on healthcare to increase by £44bn to over £177bn by the end of this parliament

• Extra revenue from health and social care levy will go towards NHS and social care as promised

• Health budget will be the largest since 2010, with record investment in research and development, better screening, 40 new hospitals and 70 hospital upgrades

Crime - graphic for rolling budget coverage 27 October

• Mr Sunak says the budget funds an ambition to recruit 20,000 new police officers

• Extra £2.2bn for courts, prisons and probation services, including £500m to reduce the backlog in courts

• Programmes to tackle neighbourhood crime, reoffending, county lines crimes, violence against women and girls, victims’ services, and improved response to rape allegations

• £3.8bn for the “largest prison-building programme in a generation”

Housing - graphic for rolling budget coverage 27 October

• £11.5bn to build up to 180,000 affordable home – 20% more than the previous programme

• £1.8bn to bring 1,500 hectares of brownfield land into use

• £640m a year to help those who are rough sleepers and homeless

Cladding - graphic for rolling budget coverage 27 October

• £5bn to remove unsafe cladding from the highest risk buildings, partly funded by a residential property developers’ tax, which will be levied on developers with profits over £25m at the rate of 4%

Transport - graphic for rolling budget coverage 27 October

• £21bn for roads as part of a larger investment in transport

• £2.6bn for upgrades of over 50 local roads

• More than £5bn for road maintenance – enough to fill one million more potholes a year

• More than £5bn for buses, cycling and walking improvements

• HGV levy (previously suspended until August) will now be suspended until 2023

• Vehicle excise duty for heavy goods vehicles to be frozen

• Funding to improve lorry park facilities

Rail - graphic for rolling budget coverage 27 October

• £46bn investment in railways, with an integrated rail plan to be published soon

• £5.7bn for London-style transport settlements in Greater Manchester, Liverpool City Region, Tees Valley, South Yorkshire, West Yorkshire, West Midlands, West of England

Child services - graphic for rolling budget coverage 27 October

• £300m for parenting programmes for families, tailored services to help with perinatal mental health

• £150m to support training and development for early years workforce

• £200m for Supporting Families programme which helps families with varied needs

• Over £200m to continue the holiday activity and food programme

• £560m for youth services – enough to fund up to 300 youth clubs in England

• More than £200m to build or transform up to 8,000 community football pitches in the UK

• £2bn new funding to help schools and colleges, bringing total support (some already announced) to almost £5bn

• Restoring per pupil funding to 2010 levels in real terms, equivalent to a cash increase for every pupil of more than £1,500

• 30,000 new school places for children with special needs and disabilities

Business support - graphic for rolling budget coverage 27 October

• New 50% business rates discount for businesses in the retail, hospitality and leisure sectors, including pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms

• This will mean any eligible business can claim a discount up to a maximum of £110,000 – a tax cut worth almost £1.7bn

• Mr Sunak says that, together with small business rates relief, this means more than 90% of all businesses in these sectors will see a discount of at least 50%

Alcohol duty - graphic for rolling budget coverage 27 October

• An overhaul of alcohol duty, cutting the number of main duty rates from 15 to six – the stronger the drink, the higher the rate

• Small producer relief will extend the principle of small brewers’ relief to small cidermakers and others making alcoholic drinks of less than 8.5% ABV

• Sparkling wines will pay the same duty as still wines of equivalent strength, rather than the 28% they currently pay. Duty will also be cut for fruit cider

Fuel duty - graphic for rolling budget coverage 27 October

• Planned rise in fuel duty will be cancelled, meaning that – after 12 consecutive years of frozen rates, the average car driver will save a total of £1,900

Coronavirus - graphic for rolling budget coverage 27 October

• National living wage to increase next year by 6.6% to £9.50 an hour. For a full time worker, that’s a pay rise worth over £1,000

• This move will help more than two million of the lowest-paid workers, Mr Sunak says

Tax - graphic for rolling budget coverage 27 October

• Mr Sunak says his goal is to reduce taxes and the universal credit taper, which reduces financial support as people work more hours, is in his sights

• The rate is currently 63%, so for every extra £1 someone earns, their universal credit is reduced by 63p. Mr Sunak announces plans to cut this by 8 percentage points (from 63% to 55%). This will come into effect “within weeks”

• Work allowances being increased by £500 – combined with the change to the taper, this is a tax cut worth more than £2bn, he says. Nearly two million families will keep, on average, an extra £1,000 a year

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US-listed Ulta Beauty swoops on high street chain Space NK

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US-listed Ulta Beauty swoops on high street chain Space NK

A New York-listed company with a valuation of more than $21bn is to snap up Space NK, the British high street beauty chain.

Sky News has learnt that Ulta Beauty, which operates close to 1,500 stores, is on the verge of a deal to buy Space NK from existing owner Manzanita Capital.

Ulta Beauty is understood to have registered an acquisition vehicle at Companies House in recent weeks.

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The exact price being paid by Ulta was unclear on Thursday morning, although one source said it was likely to be well in excess of £300m.

Manzanita Capital, a private investment firm, engaged bankers at Raymond James to oversee an auction in April 2024.

The firm has owned Space NK for more than 20 years.

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Manzanita has also owned the French perfume house Diptyque and Susanne Kaufmann, an Austrian luxury skincare brand.

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Founded in 1993 by Nicky Kinnaird, Space NK – which is named after her initials – trades from dozens of stores and employs more than 1,000 people.

It specialises in high-end skincare and cosmetics products.

Manzanita previously explored a sale of Space NK in 2018, hiring Goldman Sachs to handle a strategic review, but opted not to proceed with a deal.

None of Ulta, Manzanita, Space NK and Raymond James could be reached for comment.

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Royal Mail to scrap second-class post on Saturdays and some weekdays

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Royal Mail to scrap second-class post on Saturdays and some weekdays

Royal Mail is to be allowed to scrap Saturday second-class stamp deliveries, under a series of reforms proposed by the communications regulator.

From 28 July, Royal Mail will also be allowed to deliver second-class letters on alternate weekdays, Ofcom said.

The post will still be delivered within three working days of collection from Monday to Friday.

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The proposals had already been raised by Ofcom after a consultation was announced in 2024, and the scale back was proposed early this year.

Royal Mail had repeatedly failed to meet the so-called universal service obligation to deliver post within set periods of time.

Those delivery targets are now being revised downwards.

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Rather than having to have 93% of first-class mail delivered the next day, 90% will be legally allowed.

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The sale of Royal Mail was approved in December

The target for second-class mail deliveries will be lowered from 98.5% to arrive within three working days to 95%.

A review of stamp prices has also been announced by Ofcom amid concerns over affordability, with a consultation set to be launched next year.

It’s good news for Royal Mail and its new owner, the Czech billionaire Daniel Kretinsky. Ofcom estimates the changes will bring savings of between £250m and £425m.

A welcome change?

Unsurprisingly, the company welcomed the announcement.

“It is good news for customers across the UK as it supports the delivery of a reliable, efficient and financially sustainable universal service,” said Martin Seidenberg, the group chief executive of Royal Mail’s parent company, International Distribution Services.

“It follows extensive consultation with thousands of people and businesses to ensure that the postal service better reflects their needs and the realities of how customers send and receive mail today.”

Citizens Advice, however, doubted whether services would improve as a result of the changes.

“Today, Ofcom missed a major opportunity to bring about meaningful change,” said Tom MacInnes, the director of policy at Citizens Advice.

“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.”

Acknowledging long delays “where letters have taken weeks to arrive”, Ofcom said it set Royal Mail new enforceable targets so 99% of mail has to be delivered no more than two days late.

Changing habits

Less than a third of letters are sent now than 20 years ago, and it is forecast to fall to about a fifth of the letters previously sent.

According to Ofcom research, people want reliability and affordability more than speedy delivery.

Royal Mail has been loss-making in recent years as revenues fell.

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In response to Ofcom’s changes, a government spokesperson said: “The public expects a well-run postal service, with letters arriving on time across the country without it costing the earth. With the way people use postal services having changed, it’s right the regulator has looked at this.

“We now need Royal Mail to work with unions and posties to deliver a service that people expect, and this includes maintaining the principle of one price to send a letter anywhere in the UK”.

Ofcom said it has told Royal Mail to hold regular meetings with consumer bodies and industry groups to hear their experiences implementing the changes.

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A pub a day to close this year, industry body warns as it calls for cut to tax burden

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A pub a day to close this year, industry body warns as it calls for cut to tax burden

An industry body has warned that the equivalent of more than one pub a day is set to close across Great Britain this year.

According to the British Beer and Pub Association (BBPA), an estimated 378 venues will shut down across England, Wales and Scotland.

This would amount to more than 5,600 direct job losses, the industry body warns. It has called for a reduction in the cumulative tax and regulatory burden for the hospitality sector – including cutting business rates and beer duty.

The body – representing members that brew 90% of British beer and own more than 20,000 pubs – said such measures would slow the rate at which bars are closing.

BBPA chief executive Emma McClarkin said that while pubs are trading well, “most of the money that goes into the till goes straight back out in bills and taxes”.

“For many, it’s impossible to make a profit, which all too often leads to pubs turning off the lights for the last time,” she said.

“When a pub closes, it puts people out of a job, deprives communities of their heart and soul, and hurts the local economy.”

She urged the government to “proceed with meaningful business rates reform, mitigate these eye-watering new employment and EPR (extended producer responsibility) costs, and cut beer duty”.

“We’re not asking for special treatment, we just want the sector’s rich potential unleashed,” she added.

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The government has said it plans to reform the current business rates system, saying in March that an interim report on the measure would be published this summer.

From April, relief on property tax – that came in following the COVID-19 pandemic – was cut from 75% to 40%, leading to higher bills for hospitality, retail and leisure businesses.

The rate of employer National Insurance Contributions also rose from 13.8% to 15% that month, and the wage threshold was lowered from £9,100 to £5,000, under measures announced by Rachel Reeves in the October budget.

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