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Public borrowing in the financial year to date is £30.6bn less than predicted by the Office for Budget Responsibility (OBR), according to the last set of official figures before next month’s budget.

The Office for National Statistics (ONS) reported a £5.4bn surplus for the chancellor in January – aided by the highest January figure for self-assessment income tax receipts since monthly records began in 1999 of £21.9bn.

It took borrowing in the 2022/23 financial year so far to £116.9bn, the number-crunchers reported.

While the sum is well down on what the OBR forecast at the time of the autumn statement, the government has consistently argued that now is not the time to splash the cash despite the headwinds from the cost of living crisis.

It has cited the cost of energy bill support for households and businesses on the back of the COVID era aid that saw borrowing hit record levels.

Jeremy Hunt, however, is under pressure from critics to find more money for the NHS, fund higher public sector pay settlements in the face of widespread strikes and extend the current level of the energy support scheme beyond March.

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Tory backbenchers are particularly keen for the tax burden to fall as the party languishes behind Labour in the polls.

But there was no change in tone from Mr Hunt in his response to the ONS figures.

“We are rightly spending billions now to support households and businesses with the impacts of rising prices – but with debt at the highest level since the 1960s, it is vital we stick to our plan to reduce debt over the medium-term”, the chancellor said in a statement.

“Getting debt down will require some tough choices, but it is crucial to reduce the amount spent on debt interest so we can protect our public services.”

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The ONS data showed that public sector net debt stood at almost £2.5trn.

The impact of inflation on the cost of servicing government debt also remained clear to see at £6.7bn in January alone.

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It was the highest figure for that month since records began in 1997.

Financial experts said that the boost from income tax receipts in January was exacerbated by energy costs coming in lower than predicted.

Economists at KPMG estimated that the Energy Price Guarantee was now likely to cost only around half of the OBR’s £12.8bn forecast in 2023-24, thanks to lower wholesale energy prices.

“However, this will be largely offset by the new Energy Bills Discount Scheme for businesses, with an estimated cost of £5.5bn, providing little near-term relief against a backdrop of wider spending pressures,” they said.

Economist Ruth Gregory at Capital Economics said of the report: “January’s public finances figures suggest the chancellor may have scope for some giveaways in his budget on 15th March.

“But with the OBR poised to slash its medium-term economic growth forecasts, any hopes the chancellor might be able to give away a significant amount of money, while sticking to his previous debt-reduction plans, may be disappointed.”

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M&S and Kingfisher among suitors circling Homebase stores

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M&S and Kingfisher among suitors circling Homebase stores

Marks & Spencer (M&S) and the owner of B&Q have expressed an interest in taking over dozens of stores operated by Homebase, the DIY chain which fell into administration this month.

Sky News has learnt M&S and Kingfisher are among the retailers which are circling the remaining Homebase estate of close to 50 outlets, ahead of a deadline for offers on Friday.

The two companies are said to be preparing offers for between 20 and 25 sites, raising the possibility that hundreds of jobs can be saved.

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Roughly 2,000 jobs were put at risk by Homebase’s collapse, with administrators said to have been working hard over the last fortnight to rescue as many as possible.

Property industry sources said Home Bargains, the privately owned homewares retailer, was also in the mix to acquire a small number of Homebase sites.

About 70 of the DIY chain’s stores, along with its brand and e-commerce operation, were sold to the owner of The Range in a pre-pack deal.

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The Range, founded by Chris Dawson, has also taken on around 1,600 Homebase employees.

Teneo had been running a sale process for Homebase prior to its appointment as administrator.

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The process comes at a time when retailers are facing intensifying cost pressures in the wake of the Budget, with Kingfisher and M&S warning about the impact in recent weeks.

M&S and Kingfisher declined to comment.

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Latest sign of struggling industry as car production falls for eighth month in a row – SMMT

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Latest sign of struggling industry as car production falls for eighth month in a row - SMMT

UK car production has slowed, according to industry figures, in the latest sign of a struggling sector.

For the eighth month in a row UK car manufacturing fell, according to data from the Society of Motor Manufacturers and Traders (SMMT).

October saw 15.3% fewer cars roll off factory lines than the same month a year ago, meaning 14,037 fewer cars were made last month compared to October 2023.

The impact of this reduced production could be visible in the last week from the announcement of 800 job cuts from Ford UK and Vauxhall‘s Luton plant closure.

Part of the blame for the closure was placed on government electric car sales targets by Stellantis, Vauxhall’s parent company.

Pressure has been on UK car producers to meet the government’s electric car mandate.

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Under the mandate, financial penalties are currently levied against makers if zero-emission vehicles make up less than 22% of all sales. This will rise to 80% of all sales by 2030 and 100% by 2035.

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But the sales have not lived up to the targets and are less than the forecasts made at the time the 2030 target was devised. Instead of the intended 22% of all car sales being fully electric at present just 18.7% of cars are.

Following complaints from the sector facing £1.8bn in fines for missing targets and £4bn in discounts to make electric vehicles (EVs) more appealing ending in April next year, as well as longstanding calls for more support, a review into the mandate was announced.

Today’s figures show production for both the UK and for export declined, with the biggest fall (17.6%) in vehicles leaving the country.

The vast majority of vehicles (80%) are shipped abroad with half going to Europe.

Car maker problems are not unique to the UK as European manufacturers are also facing weaker EV demand than anticipated and competition from Chinese imports.

High borrowing costs and more expensive raw materials have compounded the problem.

On Friday, Bosch – the world’s biggest car parts supplier – reported the loss of 5,500 jobs, predominantly in Germany.

Less than a month ago Volkswagen revealed plans to shut at least three factories in Germany and lay off tens of thousands of staff.

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FCA to give companies extra 48 hours in ‘name and shame’ compromise

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FCA to give companies extra 48 hours in 'name and shame' compromise

The City watchdog is to give companies it is investigating an additional window to contest allegations as it seeks to defuse the months-long row over its so-called ‘name and shame’ proposals.

Sky News has learnt that the Financial Conduct Authority (FCA) plans to disclose on Thursday that it will allow the subjects of enforcement probes a 48-hour window to assess the contents of its announcements before they are made public.

Under the proposals, the FCA would give companies ten days’ notice that they were being investigated, at the end of which it could decide to proceed with the announcement, triggering the extra 48-hour window.

The revised plan represents a climbdown from the regulator after a fierce backlash from the City and politicians which started earlier this year.

Jeremy Hunt, the then chancellor, was among those who criticised the FCA’s stance.

In recent weeks, the watchdog’s chair, Ashley Alder, and chief executive Nikhil Rathi, have acknowledged flaws in the original plan and signalled that they would water it down.

They have argued that the principle of naming and shaming will act as an effective regulatory deterrent.

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The Treasury and Sir Keir Starmer have put Britain’s economic regulators on notice that they need to adopt a pro-growth approach to their mandates.

Mr Rathi, who threw his hat into the ring for the soon-to-be-vacant cabinet secretary’s post, is expected to step down when his first five-year term expires next autumn.

The FCA declined to comment.

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