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Jeremy Hunt has been accused of “picking the pockets of working people” after announcing billions worth of tax hikes in his Autumn Statement – as Britons face the biggest fall in disposable income on record.

The Office for Budget Responsibility (OBR), which checks the government’s fiscal plans and provides economic forecasts to go alongside them, has given a bleak assessment of the UK’s economic outlook.

The country is now in a recession, with more than half a million people forecast to lose their jobs while living standards crash as a result of rising prices.

Politics live: Britons face ‘staggering’ fall in disposable income

The spiralling cost of living will erode real wages and reduce living standards by 7% in total over the next two years, the OBR’s assessment said, wiping out the previous eight years’ growth, despite over £100bn of additional government support.

Paul Johnson, the head of the Institute for Fiscal Studies, said the figures were “simply staggering”.

“Simply staggering numbers in OBR report,” he said on Twitter.

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“Real Household Disposable Income per person to fall more than 7% over next two years. Biggest fall on record. Taking incomes down to 2013 levels.”

In his Autumn statement, Mr Hunt set out a package of around £30bn of spending cuts and £24bn in tax rises over the next five years.

The measures will see around 55% of households worse off, according to the Treasury’s own analysis.

Among the “difficult decisions” Mr Hunt said he was forced to make to curb inflation, he announced the cap on average household energy bills would increase from £2,500 to £3,000 from April.

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Sky’s economics and data editor Ed Conway takes a look at the key figures from the chancellor’s autumn statement.

But Mr Hunt said “this still means an average of £500 support for every household”, while there would also be additional cost-of-living payments for people on means-tested benefits, pensioner households and those on disability benefits.

In addition to rising energy bills, millions more Britons will pay more tax due to a freeze on income tax personal allowance, national insurance and inheritance tax thresholds.

Sometimes known as a “stealth tax”, the measure will drag more people into higher tax brackets, so is effectively a tax rise.

The Federation of Small Businesses (FSB) slammed the move, calling the budget “high on stealth-creation and low on wealth-creation”.

Some of the other main announcements from the Autumn Statement include:

  • The higher rate of tax threshold reduced to £125,140
  • Benefits and state pension to rise in line with inflation
  • Windfall tax extended until March 2028 and increased to 35%
  • Electric cars no longer exempt from car tax from April 2025
  • An extra £2.4bn per year on schools
  • NHS to get £3.3bn and adult social care £1bn next year and £1.7bn in 2024
  • Government spending will continue to increase in real terms every year for the next five years, but at a slower rate than previously planned.
  • Freeze on income tax personal allowance, national insurance and inheritance tax thresholds

A former Labour economist and policymaker, Torsten Bell, who was in the Treasury during the last financial crisis, has said the autumn statement could have been announced by the opposition.

But Labour branded it an “invoice to the economic carnage the government has created”.

Hunt a ‘scrooge who has not cancelled Bankers’ Christmas’

Shadow chancellor Rachel Reeves questioned the fairness of not abolishing nom-dom status, which she called a “tax-free income for millionaires”, and of lifting the cap on bankers’ bonuses while “urging wage restraint for everybody else”.

“He’s asking working people to take the hit with less money in their pockets in the run-up to Christmas, but also for years to come,” she said.

“But if you’re a banker, a non-dom, or a private equity manager, don’t worry – Scrooge hasn’t cancelled your Christmas.

“In the last hour, the Conservatives have picked the pockets of purses and wallets of the entire country as the chancellor has deployed a raft of stealth taxes taking billions of pounds from ordinary working people.

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Rachel Reeves said all the country got today was an invoice to the ‘carnage’ created by the government

“The country is sick of being ripped off by the Tories, we want our money back.”

Mr Hunt sought to blame Russia’s invasion of Ukraine for the “global energy crisis, a global inflation crisis and a global economic crisis” and said “we have risen to bigger challenges before”.

“We aren’t immune to these headwinds, but with this plan for stability, growth and public services, we will face into the storm,” he said.

But Green Party MP Caroline Lucas said the chancellor did not acknowledge the “elephant in the room”, which she said was “the economic catastrophe of Brexit”.

SNP Treasury spokeswoman Alison Thewlis also told MPs: “This is a UK so weak that no one would wish to join it. Scotland cannot be forced to stay in broke, broken, Brexit Britain.”

The OBR said in its forecast that the withdrawal from the EU had a “significant adverse impact” on UK trade, while a former Bank of England economist said this week that it had “permanently damaged” the economy and was the ultimate reason for many of the austerity measures announced today.

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The assessments from the OBR have been long awaited after the official forecasting body was not used during the tax-slashing September mini-budget, which spooked the markets, pushed up the cost of borrowing, sent the pound falling and forced the Bank of England to intervene to stop pension funds from collapsing.

Mr Hunt’s package is in stark contrast to his predecessor’s ill-fated plan, which analysis released on Monday found cost the UK £30bn – doubling the sum the Treasury said would have to be raised to plug the “black hole”.

But the pound has still dropped sharply against the US dollar as financial markets fret over warnings the UK is already in recession.

The Lib Dems blamed the problems on government incompetence, calling today’s announcement a “cost of chaos budget (that) will cause untold pain for everyone”.

But some of the measures announced have been welcomed.

Martin Lewis, the money saving expert, said: “I am very pleased that both benefits and the state pension are being increased by the 10.1% September inflation rate.

“It only happens from next April, and it will still be hard for many, but if it was less than this it would’ve been devastating.”

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‘The future is in our hands’ scientists say, as 2024 becomes first year to pass 1.5C global warming threshold

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'The future is in our hands' scientists say, as 2024 becomes first year to pass 1.5C global warming threshold

Last year was the warmest on record, the first to breach a symbolic threshold, and brought with it deadly impacts like flooding and drought, scientists have said.

Two new datasets found 2024 was the first calendar year when average global temperatures exceeded 1.5C above pre-industrial levels – before humans started burning fossil fuels at scale.

The record heat has not only has real-world implications, as it contributed to deadly flooding in Spain and vicious drought in places like Zambia in southern Africa.

It is also highly symbolic.

Countries agreed in the landmark Paris Agreement to limit warming ideally to 1.5C, because after that the impacts would be much more dangerous.

The news arrives as California battles “hell on earth” wildfires, suspected to have been exacerbated by climate change.

And it comes as experts warn support for the Paris goals is “more fragile than ever” – with Donald Trump and the Argentinian president poised to row back on climate action.

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What caused 2024 record heat – and is it here to stay?

Friends of the Earth called today’s findings from both the EU’s Copernicus Climate Change service and the Met Office “deeply disturbing”.

The “primary driver” of heat in the last two years was climate change from human activity, but the temporary El Nino weather phenomenon also contributed, they said.

The breach in 2024 does not mean the world has forever passed 1.5C of warming – as that would only be declared after several years of doing so, and warming may slightly ease this year as El Nino has faded.

But the world is “teetering on the edge” of doing so, Copernicus said.

Prof Piers Forster, chair of the UK’s Climate Change Committee, called it a “foretaste of life at 1.5C”.

Dr Gabriel Pollen, Zambia’s national coordinator for disasters, said “no area of life and the economy is untouched” by the country’s worst drought in more than 100 years.

Six million people face starvation, critical hydropower has plummeted, blackouts are frequent, industry is “decimated”, and growth has halved, he said.

Paris goal ‘not obsolete’

Scientists were at pains to point out it is not too late to curb worse climate change, urging leaders to maintain and step up climate action.

Professor Forster said temporarily breaching 1.5C “does not mean the goal is obsolete”, but that we should “double down” on slashing greenhouse gas emissions and on adapting to a hotter world.

The Met Office said “every fraction of a degree” still makes a difference to the severity of extreme weather.

Firefighters battle the Palisades fire as it burns during a windstorm on the west side of Los Angeles.
Pic: Reuters
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The California fires were whipped up by strong, dry winds and likely worsened by climate change. Pic: Reuters

Copernicus director Carlo Buontempo added: “The future is in our hands: swift and decisive action can still alter the trajectory of our future climate”.

Climate action is ‘economic opportunity’

Copernicus found that global temperatures in 2024 averaged 15.10°C, the hottest in records going back to 1850, making it 1.60°C above the pre-industrial level during 1850-1900.

The Met Office’s data found 2024 was 1.53C above pre-industrial levels.

The figures are global averages, which smooth out extremes from around the world into one number. That is why it still might have felt cold in some parts of the world last year.

Greenpeace campaigner Philip Evans said as “the world’s most powerful climate denier” Donald Trump returns to the White House, others must “take up the mantle of global climate leadership”.

The UK’s climate minister Kerry McCarthy said the UK has been working with other countries to cut global emissions, as well as greening the economy at home.

“Not only is this crucial for our planet, it is the economic opportunity of the 21st century… tackling the climate crisis while creating new jobs, delivering energy security and attracting new investment into the UK.”

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Picture shows baby girl moments after birth on packed migrant dinghy heading for Canary Islands

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Picture shows baby girl moments after birth on packed migrant dinghy heading for Canary Islands

Photographs have captured the moments after a baby girl was born on a packed migrant dinghy heading for the Canary Islands.

The small boat was carrying 60 people and had embarked from Tan-Tan – a Moroccan province 135 nautical miles (250km) away.

One image shows the baby lying on her mother’s lap as other passengers help the pair.

The boat’s passengers – a total of 60 people, including 14 women and four children – were rescued by a Spanish coastguard ship.

Coastguard captain Domingo Trujillo said: “The baby was crying, which indicated to us that it was alive and there were no problems, and we asked the woman’s permission to undress her and clean her.

“The umbilical cord had already been cut by one of her fellow passengers. The only thing we did was to check the child, give her to her mother and wrap them up for the trip.”

Pic: Salvmento Maritimo/Reuters

Spanish coast guards wearing white suits work on a rescue operation as they tow a rubber boat carrying migrants, including a newborn baby, off the island off the Canary Island of Lanzarote, in Spain, in this handout picture obtained on January 8, 2025. SALVAMENTO MARITIMO/Handout via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. NO RESALES. NO ARCHIVES. MANDATORY CREDIT
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Coastguards rescued all 60 people aboard the boat. Pic: Salvmento Maritimo/Reuters


The mother and baby were taken for medical checks and treated with antibiotics, medical authorities said.

Dr Maria Sabalich, an emergency coordinator of the Molina Orosa University Hospital in Lanzarote, said: “They are still in the hospital, but they are doing well.”

When they are discharged from hospital, the pair will be moved to a humanitarian centre for migrants, a government official said.

They will then most likely be relocated to a reception centre for mothers and children on another of the Canary Islands, they added.

Thousands of migrants board boats attempting to make the perilous journey from the African coast to the Spanish Canaries each year.

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In 2024, a total of 9,757 people died on the route, according to Spanish migration charity Walking Borders.

Mr Trujillo said: “Almost every night we leave at dawn and arrive back late.

“This case is very positive, because it was with a newborn, but in all the services we do, even if we are tired, we know we are helping people in distress.”

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It’s not ‘traditional’ wildfire season – so why have the California fires spread so quickly?

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It's not 'traditional' wildfire season - so why have the California fires spread so quickly?

A real-life drama is unfolding just outside Hollywood. Ferocious wildfires have ballooned at an “alarming speed”, in just a matter of hours. Why?

What caused the California wildfires?

There are currently three wildfires torching southern California. The causes of all three are still being investigated.

The majority (85%) of all forest fires across the United States are started by humans, either deliberately or accidentally, according to the US Forest Service.

But there is a difference between what ignites a wildfire and what allows it to spread.

However these fires were sparked, other factors have fuelled them, making them spread quickly and leaving people less time to prepare or flee.

The main culprit so far is the Santa Ana winds.

Follow live: Malibu residents told to get ready to flee

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LA residents face ‘long and scary night ahead’

What are Santa Ana winds?

So-called Santa Ana winds are extreme, dry winds that are common in LA in colder winter months.

The California Department of Forestry and Fire Protection warned strong Santa Ana winds and low humidity are whipping up “extreme wildfire risks”.

Winds have already topped 60mph and could reach 100mph in mountains and foothills – including in areas that have barely had any rain for months.

It has been too windy to launch firefighting aircraft, further hampering efforts to tackle the blazes.

These north-easterly winds blow from the interior of Southern California towards the coast, picking up speed as they squeeze through mountain ranges that border the urban area around the coast.

They blow in the opposite direction to the normal onshore flow that carries moist air from the Pacific Ocean into the area.

The lack of humidity in the air parches vegetation, making it more flammable once a fire is started.

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Wildfires spread as state of emergency declared

The ‘atmospheric blow-dryer’ effect

The winds create an “atmospheric blow-dryer” effect that will “dry things out even further”, said Daniel Swain, a climate scientist at University of California, Los Angeles (UCLA).

The longer the extreme wind persists, the drier the vegetation will become, he said.

“So some of the strongest winds will be at the beginning of the event, but some of the driest vegetation will actually come at the end, and so the reality is that there’s going to be a very long period of high fire risk.”

What role has climate change played?

California governor Gavin Newsom said fire season has become “year-round in the state of California” despite the state not “traditionally” seeing fires at this time of year – apparently alluding to the impact of climate change.

Scientists will need time to assess the role of climate change in these fires, which could range from drying out the land to actually decreasing wind speeds.

But broadly we know that climate change is increasing the hot, dry weather in the US that parches vegetation, thereby creating the fuel for wildfires – that’s according to scientists at World Weather Attribution.

But human activities, such as forest management and ignition sources, are also important factors that dictate how a fire spreads, WWA said.

Read more:
Terrifying firestorm tears through home of film stars
State of emergency as wildfires sweep through LA celebrity suburb

A U.S flag flies as fire engulfs a structure while the Palisades Fire burns during a windstorm on the west side of Los Angeles, California.
Pic: Reuters
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Pic: Reuters

Southern California has experienced a particularly hot summer, followed by almost no rain during what should be the wet season, said Professor Alex Hall, also from UCLA.

“And all of this comes on the heels of two very rainy years, which means there is plenty of fuel for potential wildfires.

“These intense winds have the potential to turn a small spark into a conflagration that eats up thousands of acres with alarming speed – a dynamic that is only intensifying with the warmer temperatures of a changing climate.”

The flames from a fire that broke out yesterday evening near a nature reserve in the inland foothills northeast of LA spread so quickly that staff at a care home had to push residents in wheelchairs and hospital beds down the street to a car park.

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