Jeremy Hunt rules out mortgage support and capping food prices
The chancellor has ruled out mortgage bill support for fear it would increase inflation.
Answering questions in the House of Commons, Jeremy Hunt told MPs that “schemes which involve injecting large amounts of cash into the economy, right now will be inflationary”.
Despite expressing sympathy for people with higher mortgage costs he said, “we won’t do anything that would mean we prolong inflation“.
He had been asked by Tory MPs about reintroducing a “bold Conservative idea” of mortgage interest relief at source, otherwise known as Miras, a 1980s policy that gave mortgage holders tax relief on their interest payments.
Both Mr Hunt and the economic secretary to the Treasury, Andrew Griffith, said such a policy introduction would worsen inflation.
Please use Chrome browser for a more accessible video player
How will mortgage rises affect you?
Instead, Mr Hunt said he would meet the main mortgage lenders later this week, to ask them what help and flexibility they can offer to those struggling with expensive mortgages and householders in arrears.
The answers echo statements from Prime Minister Rishi Sunak and from Treasury sources who said the government goal of halving inflation would be derailed by financial supports for mortgage bills.
Mortgage payments have been consistently rising, particularly since May, when the consumer price index method of assessing inflation did not come down as far as expected and core inflation – the rate of price rises excluding the volatile food and energy sectors – increased to a 30-year-high.
As a result, it’s expected interest rates will be even higher than previously thought, as the Bank of England hikes its base interest rate to bring inflation down to 2%. The next likely rise will be made on Thursday.
Mortgage providers are already pricing in that increase in the rates they’re offering and on Monday the interest rate on the average two-year deal rose to 6.01%.
Price caps on food were also ruled out by Mr Hunt in the Commons on Tuesday, following the news that the rate of grocery inflation was 16.5% over the four weeks to 11 June.
“I don’t believe capping prices is the right long term solution”, he said, but added he will be meeting regulators next week, “to talk further about what needs to be done with respect to supermarkets”, he said.
Business
‘Knock-back for London’ as AstraZeneca sells shares directly on rival New York Stock Exchange
One of the UK’s most valuable listed companies is to sell its shares directly on the rival New York Stock Exchange, in a move described as a “knock back for London”.
While AstraZeneca will maintain its headquarters in the UK and its primary stock listing on the London Stock Exchange, the news can be seen as a move away from London.
“Although there has been no suggestion that AstraZeneca is imminently going to up sticks and move its primary listing from London, there may be some nervousness this morning around the risk that the UK market might lose one of its largest constituents,” said Russ Mould, the investment director of investment platform AJ Bell.
Read more:
AstraZeneca exit is a frightening prospect for the City and the government
The news “does at least hint at the possibility of a more dramatic shift at some point in the future”, Mr Mould said.
There may also be relief that AstraZeneca is not moving from the London Stock Exchange altogether.
“I think there is probably relief that it’s not pursuing a primary listing in New York, but the decision is hardly a ringing endorsement of London,” said Neil Wilson, the UK investor strategist at investment platform Saxo Markets.
“It reflects the fundamental, structural issues in the UK for the largest globally-oriented stocks – the depth and liquidity of its capital markets is falling short of what’s on offer across the pond.”
“It’s also a bit of a knock-back for London”, Mr Wilson said.
Please use Chrome browser for a more accessible video player
Why is the UK economy so volatile?
Why is this happening?
The Cambridge-based pharmaceutical company said the decision to sell shares directly on the New York Stock Exchange – rather than the previous less straightforward system of using American depository receipts – has been made to allow it “to reach a broader mix of global investors” and “make it even more attractive for all our shareholders”.
“The US has the world’s largest and most liquid public markets by capitalisation, and the largest pool of innovative biopharma companies and investors,” the company said in an announcement to investors.
AstraZeneca’s share price was up 0.7% on the news.
Jaguar Land Rover (JLR) has announced it will partially resume manufacturing “in the coming days” after nearly a month in the wake of a cyber attack.
The luxury car-making plants have paused production since 31 August. The cyber attack halted car-making across the supply chain, with staff off work as a result.
Money latest: Five parts of UK defying housing market
More than 33,000 people work directly for JLR in the UK, many of whom are on assembly lines in the West Midlands, with the largest facility located in Solihull, and a plant in Halewood on Merseyside.
Roughly 200,000 more are employed by several hundred companies in the supply chain, who rely on JLR orders as their biggest client.
“As the controlled, phased restart of our operations continues, we are taking further steps towards our recovery and the return to manufacture of our world-class vehicles,” a company spokesperson said.
The shutdown was said to last until at least 1 October.
Please use Chrome browser for a more accessible video player
Are we in a cyber attack ‘epidemic’?
“Today we are informing colleagues, retailers and suppliers that some sections of our manufacturing operations will resume in the coming days,” the company added, days on from the partial restart of its IT systems, which allowed supplier payments to recommence.
“We know there is much more to do, but the foundational work of our recovery is firmly underway, and we will continue to provide updates as we progress.”
Over the weekend, the government said it would underwrite a £1.5bn five-year loan guarantee to JLR.
The promise came as the head of the influential Business and Trade Committee of MPs wrote to Chancellor Rachel Reeves, warning small firms reliant on JLR, “may have at best a week of cashflow left to support themselves” with “urgent” action needed to support businesses.
JLR was just the latest business to be the subject of a cyberattack.
Harrods, the Co-Op, and Marks and Spencer, are among the companies that’ve struggled in the past year with such attacks.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment12 months agoHere are the best electric bikes you can buy at every price level in October 2024