Friday’s mini-budget that promised billions in tax cuts and a multi-billion pound energy price cap has seen the value of the pound plummet against foreign currencies.
The new prime minister and her chancellor’s decision to cut various taxes by a combined £45bn, alongside a cap on energy prices that will cost taxpayers £60bn has resulted in a loss of market confidence.
That loss of confidence in the government’s ability to pay back the billions they are spending means the Bank of England is likely to raise interest rates – in a desperate bid to bring down inflation.
This all has an effect on Britain’s day-to-day spending. Here, Sky News looks at who will suffer and who will benefit from the pound’s slump.
Petrol
Fuel is traded in dollars.
This means that a low pound will buy less fuel, forcing prices at UK forecourts to rise.
Drivers will have noticed a recent dip in prices at the pumps – compared with this summer when they approached £2 a litre for diesel.
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But the slump in value of the pound will likely wipe out that fall, which was a welcome relief for many.
According to the AA, a pound that equals $1.08 will mean an extra 13.5p per litre of petrol.
That would add around £7.50 to the cost of filling up an average 55-litre car, when factoring in VAT.
An AA spokesman added that had it not been for former Chancellor Rishi Sunak’s decision to cut fuel duty by 5p in March, motorists would have likely seen an even bigger increase in the price per litre – of around 18.5p.
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4:29
Why did the pound fall to a record low?
Energy
Gas is also traded in dollars and therefore also suffers from a poor exchange rate.
As with oil, wholesale prices have dropped internationally since the start of the war in Ukraine, but with a weak pound, similarly the UK won’t experience the benefits.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, tells Sky News: “At this stage, this won’t affect bill payers directly, because the energy price cap is set below international energy prices, so we’ll be paying less anyway.
“Instead it will have an impact on how much the guarantee will cost the government.”
The more the price cap costs the government, the less confidence the market will have in the government’s capacity to pay it back, causing the original problem to spiral further.
Food
Any goods imported to the UK from abroad will cost more when the pound is weaker.
According to the government’s most recent food security report, the UK imports around 45% of its food.
This has proven a major problem during the Ukraine war, with grain exports unable to leave the country for several months this year.
Along with the dollar, the pound is also faring badly against the Euro, which will mean European-grown fruit and veg prices will increase.
Produce grown further afield, such as bananas, will also go up.
Not all retailers will pass all of that cost onto their customers, however.
Supermarkets are often the last to increase their prices off the back of rising costs, as they try to remain affordable, and often buy stocks in advance to mitigate sudden market shocks.
But Ms Coles cautions: “Supermarkets have warned that although they are already absorbing a great deal of the increased costs of supply, they have to pass some of it on.”
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1:54
Why does the weak pound matter?
Tech
Most of our tech gadgets, such as smartphones and tablets, are manufactured abroad.
Apple, for example, is based in California, but uses parts manufactured in China and Taiwan.
Again, a week pound will mean these foreign-made products cost more in the UK.
Apple has already increased the price of its latest iPhone range. The iPhone 13 started at £949 when it launched last year. The iPhone 14 range is retailing at £1,099 – a 16% increase.
Holidays abroad
The most obvious place consumers will experience the slump in the pound is at the bureau de change.
Holidaymakers bound for the US will get particularly less for their money than they used to – but with the pound also down against the Euro, holidays to Europe will also be more expensive.
With the cost of fuel also on the rise, airlines and package holiday providers may also increase their prices to mitigate costs.
Mortgages
A weak pound means inflation – which is already at 10% – getting even higher.
When inflation is high, the Bank of England tries to bring it down by increasing interest rates.
This higher price of borrowing is designed to encourage people to borrow less, spend less, and save more.
Currently forecasts predict interest rates hitting 6% by November, which will mean huge increases in people’s mortgage repayments.
Halifax, the country’s largest mortgage provider, is removing fee-paying mortgages from Wednesday. These allow people to pay a fee in exchange for a lower interest rates.
The two million people in the UK already on tracker and variable mortgages will see far more of their monthly pay packet spent on repayments.
And those coming to the end of a fixed rate or hoping to buy for the first time will have fewer, more expensive deals to choose from.
“The issue is the fact that fixed rate mortgages don’t just depend on the rate today, they also depend on rate expectation,” Ms Coles explains.
“The dramatic overnight change in market expectations of future rates has ramped up the cost of doing business, and lenders are taking a break to reassess and reprice.”
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2:00
Why some mortgage providers are pulling products
Pensions
People approaching retirement could suffer from UK bonds – or gilts – being sold off in response to the pound’s fall.
Some investors automatically switch people’s pensions from stocks to government bonds as they get closer to retirement age, which will leave them with a smaller pot in the current climate.
Pensioners living abroad will also suffer notably – as their pensions are paid in pounds but their expenses are in stronger currencies.
UK exporters
British businesses that sell their products and services abroad will benefit from the pound’s slump as foreign buyers look to take advantage of cheaper prices.
This will see the FTSE 100 companies benefit, as much of their money is made overseas, Ms Coles says.
It could also provide much-needed help for smaller UK businesses struggling with the increased costs of Brexit.
Local tourism
More holidaymakers could be drawn to the UK from abroad by the promise of a cheaper holiday.
While Britons get less for their money at the bureau de change, inbound tourists will get more.
For example, a London hotel room that cost $200 (£186) at the start of 2022 now only costs $150.
Britons could also return to the ‘staycation’ trend seen during the COVID pandemic and also help boost the economy by supporting tourism and hospitality businesses at home.
Hedge funds
Hedge funds employ a strategy called ‘short selling’ or ‘shorting’ to take advantage of falling market prices.
It involves borrowing shares in a firm and selling them with a view to buying them back at a profit when prices fall.
Ms Coles says: “Plenty of hedge funds were shorting the pound before the fall – based on the belief that the markets had underestimated how long inflation would stick around for.
Ava was heading home from Pizza Hut when she found out her dad had been arrested.
Warning: This article includes references to indecent images of children and suicide that some readers may find distressing
It had been “a really good evening” celebrating her brother’s birthday.
Ava (not her real name) was just 13, and her brother several years younger. Their parents had divorced a few years earlier and they were living with their mum.
Suddenly Ava’s mum, sitting in the front car seat next to her new boyfriend, got a phone call.
“She answered the phone and it was the police,” Ava remembers.
“I think they realised that there were children in the back so they kept it very minimal, but I could hear them speaking.”
“I was so scared,” she says, as she overheard about his arrest.
Image: ‘Ava’ says she was ‘repulsed’ after discovering what her dad had done
“I was panicking loads because my dad actually used to do a lot of speeding and I was like: ‘Oh no, he’s been caught speeding, he’s going to get in trouble.'”
But Ava wasn’t told what had really happened until many weeks later, even though things changed immediately.
“We found out that we weren’t going to be able to see our dad for, well we didn’t know how long for – but we weren’t allowed to see him, or even speak to him. I couldn’t text him or anything. I was just wondering what was going on, I didn’t know. I didn’t understand.”
Ava’s dad, John, had been arrested for looking at indecent images of children online.
We hear this first-hand from John (not his real name), who we interviewed separately from Ava. What he told us about his offending was, of course, difficult to hear.
His offending went on for several years, looking at indecent images and videos of young children.
His own daughter told us she was “repulsed” by what he did.
But John wanted to speak to us, frankly and honestly.
He told us he was “sorry” for what he had done, and that it was only after counselling that he realised the “actual impact on the people in the images” of his crime.
By sharing his story, he hopes to try to stop other people doing what he did and raise awareness about the impact this type of offence has – on everyone involved, including his unsuspecting family.
John tells us he’d been looking at indecent images and videos of children since 2013.
“I was on the internet, on a chat site,” he says. “Someone sent a link. I opened it, and that’s what it was.
“Then more people started sending links and it just kind of gathered pace from there really. It kind of sucks you in without you even realising it. And it becomes almost like a drug, to, you know, get your next fix.”
John says he got a “sexual kick” from looking at the images and claims “at the time, when you’re doing it, you don’t realise how wrong it is”.
‘I told them exactly what they would find’
At the point of his arrest, John had around 1,000 indecent images and videos of children on his laptop – some were Category A, the most severe.
Referencing the counselling that he since received, John says he believes the abuse he received as a child affected the way he initially perceived what he was doing.
“I had this thing in my mind,” he says, “that the kids in these were enjoying it.”
“Unfortunately, [that] was the way that my brain was wired up” and “I’m not proud of it”, he adds.
John had been offending for several years when he downloaded an image that had been electronically tagged by security agencies. It flagged his location to police.
John was arrested at his work and says he “straight away just admitted everything”.
“I told them exactly what they would find, and they found it.”
The police bailed John – and he describes the next 24 hours as “hell”.
“I wanted to kill myself,” he remembers. “It was the only way I could see out of the situation. I was just thinking about my family, my daughter and my son, how is it going to affect them?”
But John says the police had given information about a free counselling service, a helpline, which he called that day.
“It stopped me in my tracks and probably saved my life.”
Image: ‘John’ thinks children of abusers should get more support
‘My world was crumbling around me’
Six weeks later, John was allowed to make contact with Ava.
By this point she describes how she was “hysterically crying” at school every day, not knowing what had happened to her dad.
But once he told her what he’d done, things got even worse.
“When I found out, it genuinely felt like my world was crumbling around me,” Ava says.
“I felt like I couldn’t tell anyone. I was so embarrassed of what people might think of me. It sounds so silly, but I was so scared that people would think that I would end up like him as well, which would never happen.
“It felt like this really big secret that I just had to hold in.”
“I genuinely felt like the only person that was going through something like this,” Ava says.
She didn’t know it then, but her father also had a sense of fear and shame.
“Youcan’t share what you’ve done with anybody because people can get killed for things like that,” he says.
“It would take a very, very brave man to go around telling people something like that.”
And as for his kids?
“They wouldn’t want to tell anybody, would they?” he says.
For her, Ava says “for a very, very long time” things were “incredibly dark”.
“I turned to drugs,” she says. “I was doing lots of like Class As and Bs and going out all the time, I guess because it just was a form of escape.
“There was a point in my life where I just I didn’t believe it was going to get better. I really just didn’t want to exist. I was just like, if this is what life is like then why am I here?”
Image: Professor Armitage says children of abusers should be legally recognised as victims
‘The trauma is huge for those children’
Ava felt alone, but research shows this is happening to thousands of British children every year.
Whereas suspects like John are able to access free services, such as counselling, there are no similar automatic services for their children – unless families can pay.
Professor Rachel Armitage, a criminology expert, set up a Leeds-based charity called Talking Forward in 2021.
It’s the only free, in-person, peer support group for families of suspected online child sex offenders in England. But it does not have the resources to provide support for under-18s.
“The trauma is huge for those children,” Prof Armitage says.
“We have families that are paying for private therapy for their children and getting in a huge amount of debt to pay for that.”
Prof Armitage says if these children were legally recognised as victims, then if would get them the right level of automatic, free support.
It’s not unheard of for “indirect” or “secondary” victims to be recognised in law.
Currently, the Domestic Abuse Act does that for children in a domestic abuse household, even if the child hasn’t been a direct victim themselves.
In the case of children like Ava, Prof Armitage says it would mean “they would have communication with the parents in terms of what was happening with this offence; they would get the therapeutic intervention and referral to school to let them know that something has happened, which that child needs consideration for”.
We asked the Ministry of Justice whether children of online child sex offenders could be legally recognised as victims.
“We sympathise with the challenges faced by the unsuspecting families of sex offenders and fund a helpline for prisoners’ families which provides free and confidential support,” a spokesperson said.
But when we spoke with that helpline, and several other charities that the Ministry of Justice said could help, they told us they could only help children with a parent in prison – which for online offences is, nowadays, rarely the outcome.
None of them could help children like Ava, whose dad received a three-year non-custodial sentence, and was put on the sex offenders’ register for five years.
“These children will absolutely fall through the gap,” Prof Armitage says.
“I think there’s some sort of belief that these families are almost not deserving enough,” she says. “That there’s some sort of hierarchy of harms, and that they’re not harmed enough, really.”
Image: ‘Ava’ started taking drugs after her dad’s arrest and ‘didn’t want to exist’
‘People try to protect kids from people like me’
Ava says there is simply not enough help – and that feels unfair.
“In some ways we’re kind of forgotten about by the services,” she says. “It’s always about the offender.”
John agrees with his daughter.
“I think the children should get more support than the offender because nobody stops and ask them really, do they?” he says.
“Nobody thinks about what they’re going through.”
Although Ava and John now see each other, they have never spoken about the impact that John’s offending had on his daughter.
Ava was happy for us to share with John what she had gone through.
“I never knew it was that bad,” he says. “I understand that this is probably something that will affect her the rest of her life.
“You try to protect your kids, don’t you. People try to protect their kids from people like me.”
Anyone feeling emotionally distressed or suicidal can call Samaritans for help on 116 123 or email jo@samaritans.org in the UK. In the US, call the Samaritans branch in your area or 1 (800) 273-TALK.
MasterChef presenter John Torode will no longer work on the show after an allegation he used an “extremely offensive racist term” was upheld, the BBC has said.
His co-host Gregg Wallace was also sacked last week after claims of inappropriate behaviour.
On Monday, Torode said an allegation he used racist language was upheld in a report into the behaviour of Wallace. The report found more than half of 83 allegations against Wallace were substantiated.
Torode, 59, insisted he had “absolutely no recollection” of the alleged incident involving him and he “did not believe that it happened,” adding “racial language is wholly unacceptable in any environment”.
Image: John Torode and Gregg Wallace in 2008. Pic: PA
In a statement on Tuesday, a BBCspokesperson said the allegation “involves an extremely offensive racist term being used in the workplace”.
The claim was “investigated and substantiated by the independent investigation led by the law firm Lewis Silkin”, they added.
“The BBC takes this upheld finding extremely seriously,” the spokesperson said.
“We will not tolerate racist language of any kind… we told Banijay UK, the makers of MasterChef, that action must be taken.
“John Torode’s contract on MasterChef will not be renewed.”
Australian-born Torode started presenting MasterChef alongside Wallace, 60, in 2005.
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1:11
Why Gregg Wallace says he ‘will not go quietly’
A statement from Banijay UK said it “takes this matter incredibly seriously” and Lewis Silkin “substantiated an accusation of highly offensive racist language against John Torode which occurred in 2018”.
“This matter has been formally discussed with John Torode by Banijay UK, and whilst we note that John says he does not recall the incident, Lewis Silkin have upheld the very serious complaint,” the TV production company added.
“Banijay UK and the BBC are agreed that we will not renew his contract on MasterChef.”
Earlier, as the BBC released its annual report, its director-general Tim Davie addressed MasterChef’s future, saying it can survive as it is “much bigger than individuals”.
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3:30
BBC annual report findings
Speaking to BBC News after Torode was sacked, Mr Davie said a decision is yet to be taken over whether an unseen MasterChef series – filmed with both Wallace and Torode last year – will be aired.
“It’s a difficult one because… those amateur chefs gave a lot to take part – it means a lot, it can be an enormous break if you come through the show,” he added.
“I want to just reflect on that with the team and make a decision, and we’ll communicate that in due course.”
Mr Davie refused to say what the “seriously racist term” Torode was alleged to have used but said: “I certainly think we’ve drawn a line in the sand.”
In 2022, Torode was made an MBE in the Queen’s Birthday Honours, for services to food and charity.
An inquiry into the case of a hospital worker who sexually abused dozens of corpses has concluded that “offences such as those committed by David Fuller could happen again”.
It found that “current arrangements in England for the regulation and oversight of the care of people after death are partial, ineffective and, in significant areas, completely lacking”.
Phase 2 of the inquiry has examined the broader national picture and considered if procedures and practices in other hospital and non-hospital settings, where deceased people are kept, safeguard their security and dignity.
During his time as a maintenance worker, he also abused the corpses of at least 101 women and girls at Kent and Sussex Hospital and the Tunbridge Wells Hospital before his arrest in December 2020.
His victims ranged in age from nine to 100.
Phase 1 of the inquiry found he entered one mortuary 444 times in the space of one year “unnoticed and unchecked” and that deceased people were also left out of fridges and overnight during working hours.
‘Inadequate management, governance and processes’
Presenting the findings on Tuesday, Sir Jonathan Michael, chair of the inquiry, said: “This is the first time that the security and dignity of people after death has been reviewed so comprehensively.
“Inadequate management, governance and processes helped create the environment in which David Fuller was able to offend for so long.”
He said that these “weaknesses” are not confined to where Fuller operated, adding that he found examples from “across the country”.
“I have asked myself whether there could be a recurrence of the appalling crimes committed by David Fuller. – I have concluded that yes, it is entirely possible that such offences could be repeated, particularly in those sectors that lack any form of statutory regulation.”
Sir Jonathan called for a statutory regulation to “protect the security and dignity of people after death”.
After an initial glance, his interim report already called for urgent regulation to safeguard the “security and dignity of the deceased”.
On publication of his final report he describes regulation and oversight of care as “ineffective, and in significant areas completely lacking”.
David Fuller was an electrician who committed sexual offences against at least 100 deceased women and girls in the mortuaries of the Kent and Sussex Hospital and the Tunbridge Wells Hospital. His victims ranged in age from nine to 100.
This first phase of the inquiry found Fuller entered the mortuary 444 times in a single year, “unnoticed and unchecked”.
It was highly critical of the systems in place that allowed this to happen.
His shocking discovery, looking at the broader industry – be it other NHS Trusts or the 4,500 funeral directors in England – is that it could easily have happened elsewhere.
The conditions described suggest someone like Fuller could get away with it again.