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Jeremy Hunt is considering raising capital gains tax and cutting the dividend allowance as he seeks to plug a £50bn gap in the country’s finances, reports say. In the wake of the disastrous micro-budget that ultimately saw Liz Truss become Britain’s shortest-serving prime minister, the chancellor warned again on Thursday that there were “difficult decisions” as the government sought to “restore stability”. Speaking after the Bank of England’s biggest rate rise since the 1980s, Mr Hunt said families and businesses were “on our minds” as he and Mr Sunak tried to close the “financial black hole black hole’ of the UK with spending cuts and tax rises. A source close to the chancellor confirmed that tax increases were being considered but said no decisions had yet been made – stressing that we are “two weeks away” from the much-anticipated autumn budget. Cuts to tax relief and capital allowances are the most likely to be given the go-ahead, but Treasury officials have also put an increase in the key rate on the table because of the scale of the deficit, the Daily Telegraph reported.
Basic points
Show latest update 1667549133
Will Northern Powerhouse Rail Spend Down?
Spending commitments such as Northern Powerhouse Rail are likely to be cut, business secretary Grant Shapps has hinted. He told the BBC: “The line itself can deliver a 33-minute journey from Manchester to Leeds, almost quadruple the capacity of that line and do it without having to wait another 20 years after delivering what it can do the upgrade. “It didn’t make much sense to go and blast new tunnels through the Pennines. “It is not true to say that we are not implementing what we said we would do to raise the level of the North.” Emily Atkinson 4 November 2022 08:05 1667547885
The Tory minister expects critical services to be protected in an autumn statement
A Tory minister said he expected “critical services to be protected” in the Autumn Statement amid warnings that any return to austerity would be “a gift to those who support children”. It comes as a report by the Commission for Young Lives warned that systems to protect young people are “not fit for purpose”. Asked whether the necessary budgets would be protected in the forthcoming spending review, Police Minister Chris Phillips said: “Well, obviously, we’ll have to wait and see what the chancellor says on November 17. “But I would expect, as the chancellor makes his decision in the coming weeks, critical services will be protected. Mr Philip assured the broadcaster that “it would certainly be a case that I would”, but adds that we will have to wait and see what Jeremy Hunt decides in a few weeks’ time. Emily Atkinson 4 November 2022 07:44 1667547063
It’s never a good idea to raise interest rates, says Andrew Bailey
It’s never a good idea to raise interest rates, the Bank of England governor said, but he sees the pain as necessary to spare the UK from bigger and more damaging actions further down the line. “If we don’t reduce inflation back to target and if we leave it at a point where we don’t have price stability, the situation gets much worse,” Andrew Bailey told Sky News. “The economy becomes more volatile, we would have much greater fluctuations in output, given that we would have much greater job losses. “And at the end of the day, I’m afraid that the action if we find ourselves in this situation that we have to take next to restore stability would be much greater and much more damaging. So it is critical that we take action.” Asked if the pain was necessary to prevent something worse, Mr Bailey replied: “Yes. Asked what it’s like to do this to people, he said: “I never feel good, I don’t think anyone should think that central bankers feel good about doing this. But it’s our job.” Emily Atkinson 4 November 2022 07:31 1667545833
Martin Lewis reveals how much mortgages will rise after interest rates rise
The money-saving specialist said tracker agreements would increase by around £40 a month (£480/year) for every £100,000 mortgage. This means someone with a £300,000 mortgage will pay an extra £1,440 a year. “The existing fixes won’t change, but when the new deals end they will be much more expensive,” Mr Lewis said. My colleague Matt Mathers reports: Namita Singh November 4, 2022 7:10 am 1667544633
Tesco is introducing a new 28p car charge at supermarkets across the UK
Tesco has introduced a charge of at least 28p for customers to charge their electric vehicles in their car parks. The supermarket has been Britain’s biggest provider of free electricity to electric car owners since it started opening charging points in its stores in 2018. With charging points in more than 550 of its UK stores, Tesco claims it has given customers enough electricity to travel around 86 million miles – the equivalent of circling the Earth’s surface nearly three and a half times. But now those wishing to charge their electric cars while shopping must pay at least 28p per kilowatt-hour (kWh) to do so, rising to 40p and 50p for the more powerful – and faster – 22kW and 50kW chargers respectively . Namita Singh November 4, 2022 6:50 am 1667543433
ICYMI: UN envoy warns Sunak of ‘worrying’ austerity cuts
Olivier de Schutter, the UN’s rapporteur on extreme poverty, said he was “extremely concerned” by the prospect of public spending cuts – as the prime minister tries to balance the books after the disastrous mini-budget. Mr Sunak is believed to be considering a 50-50 split of spending cuts and tax rises for the November 17 Budget as he and Chancellor Jeremy Hunt face a black hole of up to £50bn. My colleague Adam Forrest has more: Namita Singh November 4, 2022 6:30 am 1667542233
Editorial: The consequences of rising interest rates will be huge for the vulnerable
The consequences of a 0.75 per cent rise in interest rates will be huge for those exposed to them – mainly for the relatively small number of people who take out tracker mortgages and those who own businesses with tracker loans. Such an increase is likely to add £100 a month to a typical mortgage. Namita Singh November 4, 2022 6:10 am 1667541033
Expand free school meals to combat ‘catastrophic’ cost of living impact, health experts urge
The availability of free school meals must be extended to all children in universal credit households to combat the “devastating impact” of the cost of living crisis, ministers have said. More than 35 healthcare leaders and charity bosses have written to Chancellor Jeremy Hunt and Education Secretary Gillian Keegan demanding an “urgent” extension of the free school meals scheme to “improve children’s nutrition and protect their health”. Namita Singh4 November 2022 05:50 1667539833
Interest rates: Starmer warns of ‘Tory mortgage premium’
Labor leader Sir Keir Starmer said families now face “a Tory mortgage premium”, with the 0.75 point increase to 3 per cent in the Bank’s base rate likely to be passed on in the form of more expensive mortgage loans. As Chancellor Jeremy Hunt delivered a further signal of austerity measures to come in this month’s Autumn Statement, there were warnings from business not to repeat the mistakes of the early 2010s by cutting government investment. Our political editor Andrew Woodcock has more: Namita Singh November 4, 2022 5:30 am 1667538633
Pound falls after Bank of England rate hike
The pound has weakened after the Bank of England’s aggressive rate hike of 0.75 percentage points and warnings of a recession that could last two years. Sterling fell 1.4% to 1.123 against the US dollar and was 0.8% lower against the euro at 1.15. Namita Singh4 November 2022 05:10
title: “Uk Interest Rates Latest Hunt Weighing Up Capital Gains Tax Hike To Plug 50Bn Black Hole " ShowToc: true date: “2022-11-01” author: “Melida Davis”
Get the free Morning Headlines email for news from our journalists around the world
Sign up for our free Morning Headlines email
Jeremy Hunt is considering raising capital gains tax and cutting the dividend allowance as he seeks to plug a £50bn gap in the country’s finances, reports say. In the wake of the disastrous micro-budget that ultimately saw Liz Truss become Britain’s shortest-serving prime minister, the chancellor warned again on Thursday that there were “difficult decisions” as the government sought to “restore stability”. Speaking after the Bank of England’s biggest rate rise since the 1980s, Mr Hunt said families and businesses were “on our minds” as he and Mr Sunak tried to close the “financial black hole black hole’ of the UK with spending cuts and tax rises. A source close to the chancellor confirmed that tax increases were being considered but said no decisions had yet been made – stressing that we are “two weeks away” from the much-anticipated autumn budget. Cuts to tax relief and capital allowances are the most likely to be given the go-ahead, but Treasury officials have also put an increase in the key rate on the table because of the scale of the deficit, the Daily Telegraph reported.
Basic points
Show latest update 1667550427
Watch: Jeremy Hunt urges families to ‘balance the books’ as Bank raises rates
Jeremy Hunt urges families to ‘balance the books’ as Bank raises rates Emily Atkinson 4 November 2022 08:27 1667549133
Will Northern Powerhouse Rail Spend Down?
Spending commitments such as Northern Powerhouse Rail are likely to be cut, business secretary Grant Shapps has hinted. He told the BBC: “The line itself can deliver a 33-minute journey from Manchester to Leeds, almost quadruple the capacity of that line and do it without having to wait another 20 years after delivering what it can do the upgrade. “It didn’t make much sense to go and blast new tunnels through the Pennines. “It is not true to say that we are not implementing what we said we would do to raise the level of the North.” Emily Atkinson 4 November 2022 08:05 1667547885
The Tory minister expects critical services to be protected in an autumn statement
A Tory minister said he expected “critical services to be protected” in the Autumn Statement amid warnings that any return to austerity would be “a gift to those who support children”. It comes as a report by the Commission for Young Lives warned that systems to protect young people are “not fit for purpose”. Asked whether the necessary budgets would be protected in the forthcoming spending review, Police Minister Chris Phillips said: “Well, obviously, we’ll have to wait and see what the chancellor says on November 17. “But I would expect, as the chancellor makes his decision in the coming weeks, critical services will be protected. Mr Philip assured the broadcaster that “it would certainly be a case that I would”, but adds that we will have to wait and see what Jeremy Hunt decides in a few weeks’ time. Emily Atkinson 4 November 2022 07:44 1667547063
It’s never a good idea to raise interest rates, says Andrew Bailey
It’s never a good idea to raise interest rates, the Bank of England governor said, but he sees the pain as necessary to spare the UK from bigger and more damaging actions further down the line. “If we don’t reduce inflation back to target and if we leave it at a point where we don’t have price stability, the situation gets much worse,” Andrew Bailey told Sky News. “The economy becomes more volatile, we would have much greater fluctuations in output, given that we would have much greater job losses. “And at the end of the day, I’m afraid that the action if we find ourselves in this situation that we have to take next to restore stability would be much greater and much more damaging. So it is critical that we take action.” Asked if the pain was necessary to prevent something worse, Mr Bailey replied: “Yes. Asked what it’s like to do this to people, he said: “I never feel good, I don’t think anyone should think that central bankers feel good about doing this. But it’s our job.” Emily Atkinson 4 November 2022 07:31 1667545833
Martin Lewis reveals how much mortgages will rise after interest rates rise
The money-saving specialist said tracker agreements would increase by around £40 a month (£480/year) for every £100,000 mortgage. This means someone with a £300,000 mortgage will pay an extra £1,440 a year. “The existing fixes won’t change, but when the new deals end they will be much more expensive,” Mr Lewis said. My colleague Matt Mathers reports: Namita Singh November 4, 2022 7:10 am 1667544633
Tesco is introducing a new 28p car charge at supermarkets across the UK
Tesco has introduced a charge of at least 28p for customers to charge their electric vehicles in their car parks. The supermarket has been Britain’s biggest provider of free electricity to electric car owners since it started opening charging points in its stores in 2018. With charging points in more than 550 of its UK stores, Tesco claims it has given customers enough electricity to travel around 86 million miles – the equivalent of circling the Earth’s surface nearly three and a half times. But now those wishing to charge their electric cars while shopping must pay at least 28p per kilowatt-hour (kWh) to do so, rising to 40p and 50p for the more powerful – and faster – 22kW and 50kW chargers respectively . Namita Singh November 4, 2022 6:50 am 1667543433
ICYMI: UN envoy warns Sunak of ‘worrying’ austerity cuts
Olivier de Schutter, the UN’s rapporteur on extreme poverty, said he was “extremely concerned” by the prospect of public spending cuts – as the prime minister tries to balance the books after the disastrous mini-budget. Mr Sunak is believed to be considering a 50-50 split of spending cuts and tax rises for the November 17 Budget as he and Chancellor Jeremy Hunt face a black hole of up to £50bn. My colleague Adam Forrest has more: Namita Singh November 4, 2022 6:30 am 1667542233
Editorial: The consequences of rising interest rates will be huge for the vulnerable
The consequences of a 0.75 per cent rise in interest rates will be huge for those exposed to them – mainly for the relatively small number of people who take out tracker mortgages and those who own businesses with tracker loans. Such an increase is likely to add £100 a month to a typical mortgage. Namita Singh November 4, 2022 6:10 am 1667541033
Expand free school meals to combat ‘catastrophic’ cost of living impact, health experts urge
The availability of free school meals must be extended to all children in universal credit households to combat the “devastating impact” of the cost of living crisis, ministers have said. More than 35 healthcare leaders and charity bosses have written to Chancellor Jeremy Hunt and Education Secretary Gillian Keegan demanding an “urgent” extension of the free school meals scheme to “improve children’s nutrition and protect their health”. Namita Singh4 November 2022 05:50 1667539833
Interest rates: Starmer warns of ‘Tory mortgage premium’
Labor leader Sir Keir Starmer said families now face “a Tory mortgage premium”, with the 0.75 point increase to 3 per cent in the Bank’s base rate likely to be passed on in the form of more expensive mortgage loans. As Chancellor Jeremy Hunt delivered a further signal of austerity measures to come in this month’s Autumn Statement, there were warnings from business not to repeat the mistakes of the early 2010s by cutting government investment. Our political editor Andrew Woodcock has more: Namita Singh November 4, 2022 5:30 am
