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Prime Minister Liz Truss’s external adviser on the economy has told Sky News that the chancellor had “taken his eye off the ball” and “overstepped the mark” with his mini-budget.

Gerard Lyons, who is often referred to as Ms Truss’s favourite economist, said Chancellor Kwasi Kwarteng failed to adequately prepare the financial markets ahead of his announcement.

Speaking on The Take With Sophy Ridge, Mr Lyons said: “The chancellor, whilst he had focused on the general public and on British businesses, he had not really prepared the financial markets fully.

“And I think he had taken his eye off the ball slightly, shall we say, in having not prepared the markets for what he was doing in the budget and I felt that he overstepped the mark last week.

“So it was a combination of all three factors – the febrile markets because of the global backdrop, the actions of the Bank of England last Thursday, but let’s be in no doubt, it was primarily the mini-budget last Friday that triggered this latest series of events.”

Asked if he had had any conversations with Ms Truss or her team, Mr Lyons said he had “made my thoughts known”. He said he was “highlighting in my writing… about the febrile state of the markets and the need to keep the markets onside”.

Pushed on whether they had taken his advice, he said: “Well, sometimes people listen, sometimes they don’t, but there were positives that came out of it. But as we saw last Friday, there was just not enough in line with what the markets had been prepped for and were expecting.”

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Despite his remarks, Mr Lyons said the budget was “very positive in many respects”.

He said it was “very much on a pro-growth agenda” which was needed to “break out of this low-growth phrase”.

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‘Mini-budget not what the markets were expecting’

Mr Lyons’s remarks about the chancellor failing to prepare the financial markets were contrasted by a minister who told deputy political editor Sam Coates it was “bulls***t” to say market movement was related to the mini-budget announcement.

And on The Take with Sophy Ridge, chief secretary to the Treasury Chris Philp denied the government had any responsibility and said there would be no change of course.

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Chief Sec bullish on tax cuts

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“Getting Britain’s economy growing is so important. Important to raise wages and important to pay the tax bills of the future,” he said.

Mr Philp suggested benefits may not be hiked in line with spiralling inflation. He said a commitment by former chancellor Rishi Sunak to uprate benefits in line with inflation was under consideration amid reports different government departments have been asked to draw up plans for efficiency savings.

Mr Philp told ITV’s Peston: “We are going to look for efficiencies wherever we can find them.”

But he said the Treasury would not commit to an expected uprating of benefits in line with inflation.

Pressed about the decision, he said: “I am not going to make policy commitments on live TV, it is going to be considered in the normal way, we will make a decision and it will be announced I am sure in the first instance to the House of Commons.”

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On Wednesday the Bank of England was forced to launch an emergency government bond-buying programme to prevent borrowing costs from spiralling out of control and stave off a “material risk to UK financial stability”.

The Bank will buy as many long-dated government bonds as needed between now and 14 October in a bid to stabilise financial markets.

The announcement had an immediate effect on the market, with data showing 30-year bond yields fell back to 4.3%, having risen to levels above 5% not seen since 2002, earlier on Wednesday. There were similar falls for 20-year yields.

Ms Truss is expected to face public questioning about her economic plans for the first time on Thursday as she tours regional BBC radio stations in a morning round of interviews. Neither the prime minister nor the chancellor were anywhere to be seen or heard on the economy on Wednesday.

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Russian oil still seeping into UK – the reasons why sanctions are not working

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Russian oil still seeping into UK - the reasons why sanctions are not working

The Russian state has been making more money from its oil and gas industry in the past three months than in any comparable period since the early days of the Ukraine invasion, it has emerged.

The figures underline that despite the imposition of various sanctions on fossil fuel exports from Russia since February 2022, the country is still making significant sums from them. This is in part because rather than preventing Russia from exporting oil, gas and coal, they have simply changed the geography of the global fossil fuels business.

In the three months to April, Russia made a monthly average of 1.2 trillion rubles (£10.4bn) from its oil and gas revenues, according to Sky analysis of figures collected by Bloomberg.

That is the highest three-month average since April 2022.

It comes amid elevated oil prices and concerns that sanctions on Russia are failing to prevent the country earning money and waging war on Ukraine.

Before the invasion of Ukraine, the world’s biggest recipients of Russian oil experts were the European Union, the US and China. Since then, the UK, US and EU have banned the import of crude oil or refined products from Russia.

G7 nations have also introduced a price cap which aims to prevent any Western companies – from shipping firms to insurers – from assisting with any Russian oil exports for anything more than $60 a barrel.

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However, Russia continues to export just as much oil as it did before the invasion of Ukraine and the imposition of the price cap.

Sanctions experts say the price cap has been a qualified success, since it has slightly reduced the potential revenues enjoyed by the Kremlin, if it intends to ship that oil via most commercial ships. In response, Russia is reported to have built up a so-called “dark fleet” of ships carrying Russian oil without obeying those sanctions.

The top three destinations for Russian oil are now China, India and Turkey. The UK now imports considerably more oil and oil products from the Middle East than before, making it more reliant on the Gulf.

However, Russian fossil fuel molecules are still being exported to the UK, albeit indirectly, because the sanctions imposed by western nations do not cover oil products refined elsewhere.

The upshot is that Indian refineries are importing a record amount of oil from Russia, and Britain is importing a record amount of oil from Indian refineries – up by 176% since the invasion of Ukraine.

At least some Russian oil still powers the cars in Britain and the planes refilling in British airports, but because it is impossible to trace the fossil fuels molecule by molecule, it is hard to know precisely how much.

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‘No indication of malicious activity’ as e-gates back working at UK airports after travel chaos

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'No indication of malicious activity' as e-gates back working at UK airports after travel chaos

A “nationwide issue” with e-gates at airports has been resolved after causing travel chaos across the country, the Home Office has said.

It said the system was back up and running and there was “no indication of malicious cyber activity”.

Social media images and footage showed long queues at the passport scanning gates at several airports overnight.

Passengers also reported being held on planes after they landed, while others said the delays caused them to miss trains.

Queues at Gatwick Airport. Pic: Paul Curievici/PA
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Queues at Gatwick Airport. Pic: Paul Curievici/PA

Heathrow, Gatwick and Stansted airports were affected, as well as Manchester, Bristol and Southampton, along with Edinburgh, Glasgow and Aberdeen.

One passenger at Stansted Airport told Sky News they had missed several coaches to central London because of the issues, and only cleared the airport after nearly three hours in line.

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Travel chaos across UK airports

“Not much info given. No water handed out. Babies crying,” they said.

Another at Luton Airport said it took around 80 minutes from leaving their flight from Amsterdam to get through border control.

One traveller said they were held on their plane at Stansted for around an hour and a half after landing.

“We weren’t told much other than the e-gates were down but had no idea how long it would take,” they told Sky News.

“After that not much was said other than we couldn’t disembark till the other five planes ahead of us did.”

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Queues at Heathrow Airport
E-gates at Heathrow Airport
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Queues and closed e-gates at Gatwick Airport

‘No indication of malicious cyber activity’

A Home Office spokesperson said: “E-gates at UK airports came back online shortly after midnight.

“As soon as engineers detected a wider system network issue at 7.44pm last night, a large-scale contingency response was activated within six minutes.

“At no point was border security compromised, and there is no indication of malicious cyber activity.”

Queues seen at Manchester Airport. Pic: @GoggleBizTog
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Queues at Manchester Airport. Pic: @GoggleBizTog

The queue at Gatwick Airport. Pic: Paul Uwagboe/PA
Image:
The queue at Gatwick Airport. Pic: Paul Uwagboe/PA

E-gate system crashed last year

The disruption came after Border Force workers staged a four-day strike at Heathrow Airport in a dispute over working conditions last week.

The union said workers were protesting against plans to introduce new rosters, which they claim will see around 250 of them forced out of their jobs at passport control.

The UK’s e-gates system also crashed in May last year, causing long queues and several hours of delays for passengers.

At the time travel expert Paul Charles told Sky News underinvestment in the UK’s transport infrastructure had left these systems “hanging by a thread”.

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Renewable power reaches record 30% of global electricity

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Renewable power reaches record 30% of global electricity

Experts have hailed a “critical turning point” as renewable power generated a record-breaking 30% of the world’s electricity last year, new data has found.

It raises hopes that the peaking of global greenhouse gas emissions is on the horizon.

But there are concerns many countries are being held up in their switch to clean power because they cannot access the cash needed to fund it.

Last year’s renewable power “milestone” was driven by yet another booming year for wind and especially solar.

China, Brazil and the Netherlands led the way in terms of fast roll-outs, thinktank Ember said in its annual Global Electricity Review.

China alone accounted for 51% of new solar generation and 60% of new wind, even as it continued to build vast amounts of new coal power too.

Christiana Figueres, former United Nations climate chief, called 2023 a “critical turning point”.

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She said “outdated” fossil fuels now can’t compete with the “exponential innovations and declining cost curves in renewable energy and storage”.

“All of humanity and the planet upon which we depend will be better off for it,” she added.

In the last two decades, solar and wind have defied expectations and grown far faster than expected, surging from just 0.2% of global power generation in 2000 to 13.4% in 2023.

Dave Jones, Ember’s head of global insights, said the huge growth was due to “matured” policies and technologies and a plummet in costs.

The cost of solar power halved last year despite a surge in demand, thanks to an explosion in manufacturing capacity.

Meanwhile problems that had held up wind power – such as inflationary costs – began to resolve, unlocking more projects.

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China ramps up coal power despite pledge to control it

A ‘genuinely ambitious’ renewables target

At the COP28 climate summit in Dubai last year leaders pledged to triple renewable power capacity by 2030.

The “genuinely ambitious” target shows leaders are backing renewables, which are the “main tools that we have in the box today to deliver the big emissions reductions we need”, rather than riskier technology, such as that to remove carbon dioxide from the atmosphere, Mr Jones said.

Ember suggests the global burning of fossil fuels in the power sector probably peaked in 2023 and will start to fall this year, along with the pollution and emissions they bring.

As the power sector accounts for the largest share of global emissions, that means global emissions could start to fall soon too.

That is good news for curbing climate change, although scientists have repeatedly warned that emissions are not falling fast enough to limit global warming to agreed safer levels.

Mr Jones said the pace of emissions falls “depends on how fast the renewables revolution continues”.

Joab Okanda, a senior adviser for Christian Aid, based in Kenya, said the roll-out would be “so much faster with the right investment” in African nations, which often face much higher borrowing costs than other countries.

Hanan Morsy, deputy executive secretary and chief economist at the UN’s Economic Commission for Africa, said the continent holds “big potential in renewable energy”.

“Yet a dismally small share of less than 2% of global renewable energy investments are made on the continent. The continent can’t develop further without access to energy.”

He called for financial reforms to bring in affordable and new types of funding.

Financing the clean transition in developing nations, which have typically contributed the least to climate change, will be a key issue at this year’s UN climate summit, COP29 in Azerbaijan.

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