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Another of Prime Minister Rishi Sunak’s five key priorities for 2023 is in doubt as national debt reached 100% of GDP.

The third of the government’s five targets is to reduce the national debt but official figures from the Office for National Statistics (ONS) showed it increased in May to the highest in more than 60 years.

Public sector debt topped £2,567.2bn at the end of May, equivalent to 100.1% of GDP.

This means the public sector, excluding public sector banks, spent more than it received in taxes and other income and borrowed the shortfall.

GDP – or gross domestic product – is a key metric of economic output, tracking everything produced in an economy. The ONS said the 100% of GDP statistic should be treated as “highly provisional and likely to be revised” as it relies on GDP estimates from the independent finance analysts, the Office of Budget Responsibility.

During the COVID-19 pandemic there had been similar early estimates that the debt to GDP ratio had reached 100% but they were revised down when stronger GDP data replaced the forecasts.

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Borrowing is high after periods of large state spending, such as on wars or pandemic measures.

Due to the cost of energy schemes, benefit increases and staffing costs, the figures also showed the second-highest May borrowing since the ONS’s monthly records began in 1993.

Benefits payments increased in line with the inflation rate of 10.1% recorded in January.

In response to the announcement, Chancellor Jeremy Hunt said: “We rightly spent billions to protect families and businesses from the worst impacts of the pandemic and Putin’s energy crisis.

“But it would be manifestly unfair to leave future generations with a tab they cannot repay. That’s why we have taken difficult but necessary decisions to balance the books in order to halve inflation this year, grow the economy and reduce debt.”

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Trump-Putin summit starting to feel quite ‘Midnight Sun’ – as White House confirms location

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Trump-Putin summit starting to feel quite 'Midnight Sun' - as White House confirms location

It’s beginning to feel like “Midnight Sun” diplomacy.

In parts of Alaska, the sun doesn’t set in summer, casting light through the night but leaving you disorientated.

Ukraine latest: Zelenskyy reject’s Putin’s proposal

The Trump-Putin summit is pitched as “transparent” but it’s difficult to find any path to peace right now.

White House press secretary Karoline Leavitt has reduced it to a “listening exercise” where Donald Trump will seek a “better understanding” of the situation.

There isn’t much to understand – Russia wants territory, Ukraine isn’t ceding it – but Ms Levitt rejects talk of them “tempering expectations”.

It’s possible to be both hopeful and measured, she says, because Mr Trump wants peace but is only meeting one side on Friday.

It’s the fact that he’s only meeting Vladimir Putin that concerns European leaders, who fear Ukraine could be side-lined by any Trump-Putin pact.

Volodymyr Zelenskyy claims Mr Putin wants the rest of Donetsk and, in effect, the entire Donbas region in eastern Ukraine.

He’s ruled out surrendering that because it would rob him of key defence lines and leave Kyiv vulnerable to future offensives.

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‘Steps have been taken to remedy the situation’ in Pokrovsk

European leaders – including Sir Keir Starmer – will hold online talks with Mr Zelenskyy twice on Wednesday, on either side of a virtual call with Mr Trump and US Vice President JD Vance.

Their concerns may be getting through, hence the White House now framing the summit as a cautious fact-finding exercise and nothing more.

The only thing we really learned from the latest news conference is that the first Trump-Putin meeting in six years will be in Anchorage.

A White House official later confirmed it would be at Joint Base Elmendorf-Richardson, a US military facility.

Read more:
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Trump gaffe reveals how central Putin is to his narrative

The US base where the talks will take place. Pic: Reuters
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The US base where the talks will take place. Pic: Reuters

Alaska itself, with its history and geography, is a layered metaphor: a place the Russians sold to the US in the 1800s.

A remote but strategic frontier where the lines of ownership and the rules of negotiation are once again being sketched out.

On a clear day, you can see Russia from Alaska, but without Mr Zelenskyy in the room, it’s difficult to see them conquering any summit.

In the place where the sun never sets, the deal might never start.

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Explained: The land Ukraine could be forced to give up – and will Russia have to concede anything?

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Explained: The land Ukraine could be forced to give up - and will Russia have to concede anything?

Any agreement between Donald Trump and Vladimir Putin when they meet on Friday could leave Ukraine in an impossible position after three years of brutal, grinding war for survival.

There has been speculation the two leaders could agree a so-called ‘land for peace’ deal which could see Ukraine instructed to give up territory in exchange for an end to the fighting.

That would effectively be an annexation of sovereign Ukrainian territory by Russia by force.

Ukrainian President Volodymyr Zelenskyy said on Tuesday evening that Mr Putin wants the rest of Donetsk – and in effect the entire eastern Donbas region – as part of a ceasefire plan.

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Sky’s Michael Clarke explains in more detail what territories are under possible threat.

But the Ukrainian leader said Kyiv would reject the proposal and explained that such a move would deprive them of defensive lines and open the way for Moscow to conduct further offensives.

Russia currently occupies around 19% of Ukraine, including Crimea and the parts of the Donbas region it seized prior to the full-scale invasion in February 2022.

President Trump has said he hopes to get “prime territory” back for Ukraine, though it’s uncertain what President Putin would agree to.

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In this story, Sky News speaks to experts about what the highly-anticipated meeting between the Russian and American presidents could mean for the battlefield.

Donald Trump and Vladimir Putin are set to meet in Alaska. Pic: Reuters
Image:
Donald Trump and Vladimir Putin are set to meet in Alaska. Pic: Reuters

A ceasefire along the frontline?

The range of outcomes for the Trump-Putin meeting is broad, with anything from no progress to a ceasefire possible.

Polish Prime Minister Donald Tusk, for instance, said this week that he has “many fears and a lot of hope” for what could come out of it.

Military analyst Michael Clarke told Sky News that the summit “certainly won’t create peace, but it might create a ceasefire in place if Putin decides to be flexible”.

“So far he hasn’t shown any flexibility at all,” he added.

A ceasefire along the frontline, with minimal withdrawals on both sides, would be “structurally changing” and an “astonishing outcome”, he said.

However he doubts this will happen. Mr Clarke said a favourable outcome could be the two sides agreeing to a ceasefire that would start in two weeks time (for instance) with threats of sanctions from the US if Russia or Ukraine breaks it.

Read more:
What Trump’s Putin gaffe reveals about upcoming meeting

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President Zelenskyy: ‘Path to peace must be determined together’

Will Ukraine be forced to give up territory to Russia?

While President Trump’s attitude to Ukrainian resistance appears possibly more favourable from his recent comments, it’s still possible that Kyiv could be asked to give up territory as part of any agreement with Russia.

Moscow has been focussed on four oblasts (regions) of Ukraine: Luhansk and Donetsk (the Donbas), Zaporizhzhia and Kherson.

President Putin’s forces control almost all of Luhansk, but about 30% of the others remain in Ukrainian hands and are fiercely contested.

“Russian rates of advance have picked up in the last month, but even though they are making ground, it would still take years (three or more) at current rates to capture all this territory,” Matthew Savill, director of military sciences at the RUSI thinktank, told Sky News.

He says it “wouldn’t be surprising” if Russia tried to acquire the rest of the Donbas as part of negotiations – something that is “highly unattractive” for Ukraine that could leave them vulnerable in future.

This would include surrendering some of the ‘fortress belt’ – a network of four settlements including Kramatorsk and Sloviansk – that has held back Russian forces for 11 years.

Michael Clarke said this might well satisfy President Putin “for now”, but many believe that he would return for the rest of Ukraine – possibly after President Trump leaves office.

It’s unclear if President Volodymyr Zelenskyy could accept such a painful concession – or indeed, survive it politically – or if the wider Ukrainian public would support it in return for a pause in the fighting.

Would Russia have to return any territory to Ukraine?

The White House appears to have been briefing that it might, though the situation is very unclear.

Mr Savill added: “The Ukrainians might want to even up the situation in the north, by removing Russian incursions into Sumy and near Kharkiv, but of greater importance would be getting the Zaporizhzhia Nuclear Power Plant back under Ukrainian control, given how much it would contribute to Ukrainian power needs.”

It’s also possible that Russia could be willing to withdraw from the areas of Kherson region that it controls.

It’s “plausible” they could get the power plant back, Mr Clarke said, but Russia would likely insist on maintaining access to Crimea by land.

This would mean that cities Mariupol and Melitopol – would remain in Russian hands, with all that that entails for the people living there.

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What are West Bank settlements, who are settlers, and why are they controversial?

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What are West Bank settlements, who are settlers, and why are they controversial?

There are increasing reports of violence and intimidation by Israeli settlers in occupied Palestinian territory.

Sky News chief correspondent Stuart Ramsay has been inside the West Bank, where he’s found settlers feeling emboldened since the October 7 attack by Hamas on Israel.

With the government largely supporting them, they act with impunity and are in many ways enabled by Israel security forces.

But what are the settlements, and why are they controversial?

What are settlements?

A settlement is an Israeli-built village, town, or city in occupied Palestinian territory – either in the West Bank or East Jerusalem.

The largest, Modi’in Illit, is thought to house around 82,000 settlers, according to Peace Now.

There is also a growing movement of Israelis wanting to build settlements in Gaza.

Settlements are illegal under international law and have been condemned by the UN. They are, however, authorised by the Israeli government.

As well as official, government-approved settlements, there are also Israeli outposts.

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Israeli settlers attack Palestinian villages

These are established without government approval and are considered illegal by Israeli authorities. But reports suggest the government often turns a blind eye to their creation.

Israel began building settlements shortly after the 1967 Six-Day War.

The Etzion Bloc in Hebron, which was established that year, now houses around 40,000 people.

Read more:
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Israeli-Palestinian conflict: A century of war, heartbreak, hope
What is the two-state solution?

According to the Israel Policy Forum, the settlement programme is intended to protect Israel’s security, with settlers acting as the first line of defence “against an invasion”.

The Israeli public appears divided on the effectiveness of the settlements, however.

A Palestinian man walks next to a wall covered with sprayed Hebrew slogans. Pic: Reuters
Image:
A Palestinian man walks next to a wall covered with sprayed Hebrew slogans. Pic: Reuters

A 2024 Pew Research Centre poll found that 40% of Israelis believe settlements help Israeli security, 35% say they hurt it, and 21% think they make no difference.

Why are they controversial?

Israeli settlements are built on land that is internationally recognised as Palestinian territory.

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The activists trying to stop Israeli settlers

Sky News has spoken to multiple Palestinians who say they were forced out of their homes by Israeli settlers, despite having lived there for generations.

“They gradually invade the community and expand. The goal is to terrorise people, to make them flee,” Rachel Abramovitz, a member of the group Looking The Occupation In The Eye, told Sky News in May.

Settlers who have spoken to Sky News say they have a holy right to occupy the land.

American-born Israeli settler Daniel Winston told Sky’s chief correspondent Stuart Ramsay: “God’s real, and he wrote the Bible, and the Bible says, ‘I made this land, and I want you to be here’.”

Settlers make up around 5% of Israel’s population and 15% of the West Bank’s population, according to data from Peace Now.

How have things escalated since 7 October 2023?

Since the Hamas-led attacks on 7 October 2023 and Israel’s subsequent military bombardment of Gaza, more than 100 Israeli outposts have been established, according to Peace Now.

In May, Prime Minister Benjamin Netanyahu’s government approved 22 new settlements, including the legalisation of outposts that had previously been built without authorisation.

Settler violence against Palestinians has also increased, according to the UN, with an average of 118 incidents each month – up from 108 in 2023, which was already a record year.

The UK government has sanctioned two members of Mr Netanyahu’s cabinet, Itamar Ben-Gvir and Bezalel Smotrich, for “repeated incitements of violence against Palestinian civilians” – notably in the West Bank.

The UN’s latest report on Israeli settlements notes that in October 2024, there were 162 settler attacks on Palestinian olive harvesters, many of them in the presence of IDF soldiers.

Of the 174 settler violence incidents studied by the UN, 109 were not reported to Israeli authorities.

Most Palestinian victims said they didn’t report the attacks due to a lack of trust in the Israeli system; some said they feared retaliation by settlers or the authorities if they did.

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