On the cusp of a golden era of AI innovation across the economy and the state, the UK government instead finds itself braced to keep a financial crisis at bay. It has only itself to blame for the fallout from the neophyte manner in which it took control of the G7 economy last year.
Rachel Reeves was cued up as the “Iron Chancellor of the Exchequer” as she stepped in as the first woman to run the UK Treasury in its 900-year history. Ms Reeves returned from China on Monday after pursuing important business that should open up longer-term channels of growth, but with little to offer for her immediate problems.
The mighty dollar is on a roll ahead of US president-elect Donald Trump’s inauguration next week. It has gained 10 pence on the UK pound since the US election on November 5, as the sterling dropped to $1.21 on Monday.
Ms Reeves appears to be in trouble, as the slide in the value of the pound has fed off a bond market wobble on her public spending plans. This has increased the government’s expenses to service the long-term debt and wiped out her claims to have a short-run cushion for expenditures.
This uncomfortable pinch-point means that answers are being demanded from Ms Reeves (and her boss, Prime Minister Keir Starmer) about what their vision for the economy is. Over the next few weeks, Ms Reeves will be asked to break her usual script and demonstrate some surety of touch in reassuring the markets. Otherwise, there could be a spiral.
The government’s credibility issue stems from the fact that Mr Starmer and Ms Reeves have been presented as a double act. In lockstep they pledged to deliver the highest growth, in gross domestic product terms, among G7 member nations. Instead, they are hobbled by the flat economy left by the Conservatives and the highest inflation in the G7.
Mr Starmer was on the stump at the weekend promising to inject AI into the UK’s veins, recognising the rapid pace with which the technology is advancing. The problem with this, as well as Ms Reeves’s discussions on financial services in China over the weekend, is that promises on the horizon are unlikely to move the needle for the first months of the new year.
That is where the Labour party has been found lacking on how to manage the British economy.
After winning big in the general election in July, Ms Reeves and Mr Starmer embarked on a political exercise to turn the page on the Conservative government’s mismanagement of the economy. They proclaimed a black hole in the public finances that ranged from £20 billion to £40 billion ($24.2 billion to $48.5 billion).
They repeatedly threw this attack line at the Tories, but what that did was break the public’s – and the market’s – confidence in the British economy. And by running with this strategy, Ms Reeves also failed to recognise that from July she owned the prospects of the national economy. The Conservatives were a dead letter in economic terms, blown away backwards in the wind. In the process, Ms Reeves starved the confidence of the very growth engine that she needed to cajole into higher gears.
The events of the past few months have been a textbook example of how political leadership can affect national economic performance. In a budget that sought to repair the lack of funds with the raising of extra taxes, Ms Reeves increased the payroll tax. But if the logic of a rapid AI switchover was real, surely taking more from employers for hiring staff was an ill-timed move given how that would lead to job cuts.
Rupert Soames of the Confederation of British Industry on Monday bluntly told Ms Reeves that she had fallen foul of the adage: “If you are in a hole stop digging.” Another big name in business, Manchester United shareholder Jim Ratcliffe, accused Ms Reeves of presiding over the de-industrialisation of the UK. His chemical plant in Scotland is closing this summer, having had the life squeezed out of it by “high energy prices and carbon taxes”.
Confidence in the UK economy barely exists, and Ms Reeves’s problem is partly that she oversold her own skills as a manager of the economic brief.
Still to come is Mr Trump’s inauguration and the subsequent delivery of his economic agenda, which would almost certainly include tariffs. There is also the overshoot in UK welfare and healthcare budgets that presents Ms Reeves with politically impossible choices. The government has a large majority, but few Labour MPs will be mentally equipped to stand over hard cuts designed to keep the budget on track for the markets.
On the sidelines of an investment conference that the UK government held before its tax-raising budget, one money manager told me that the government had the goodwill to increase spending by tens of billions of pounds. The caveat was that this increase in spending needed to be structured like an international investment package and made separate from extra day-to-day spending. Instead, Ms Reeves shovelled money into reforms of the existing services, plus additional wages for state workers. There was no nitty-gritty framework that tied more money to extra growth.
The time to get ahead of the markets was October, but instead there have been three months of increasing negativity. And as the global economy pivots to the strengthening dollar, Ms Reeves faces a very rough 2025.
About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
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The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
The years Ramadan fell in May
Eyasses squad
Charlie Preston (captain) – goal shooter/ goalkeeper (Dubai College)
Arushi Holt (vice-captain) – wing defence / centre (Jumeriah English Speaking School)
Olivia Petricola (vice-captain) – centre / wing attack (Dubai English Speaking College)
Isabel Affley – goalkeeper / goal defence (Dubai English Speaking College)
Jemma Eley – goal attack / wing attack (Dubai College)
Alana Farrell-Morton – centre / wing / defence / wing attack (Nord Anglia International School)
Molly Fuller – goal attack / wing attack (Dubai College)
Caitlin Gowdy – goal defence / wing defence (Dubai English Speaking College)
Noorulain Hussain – goal defence / wing defence (Dubai College)
Zahra Hussain-Gillani – goal defence / goalkeeper (British School Al Khubairat)
Claire Janssen – goal shooter / goal attack (Jumeriah English Speaking School)
Eliza Petricola – wing attack / centre (Dubai English Speaking College)
Analysis
Maros Sefcovic is juggling multiple international trade agreement files, but his message was clear when he spoke to The National on Wednesday.
The EU-UAE bilateral trade deal will be finalised soon, he said. It is in everyone’s interests to do so. Both sides want to move quickly and are in alignment. He said the UAE is a very important partner for the EU. It’s full speed ahead - and with some lofty ambitions - on the road to a free trade agreement.
We also talked about US-EU tariffs. He answered that both sides need to talk more and more often, but he is prepared to defend Europe's position and said diplomacy should be a guiding principle through the current moment.
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Veere di Wedding
Dir: Shashanka Ghosh
Starring: Kareena Kapoo-Khan, Sonam Kapoor, Swara Bhaskar and Shikha Talsania
Verdict: 4 Stars
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Mohammed bin Zayed Majlis
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Killing of Qassem Suleimani
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
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UAE fixtures
May 9, v Malaysia
May 10, v Qatar
May 13, v Malaysia
May 15, v Qatar
May 18 and 19, semi-finals
May 20, final
Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
Mohammed bin Zayed Majlis
Mohammed bin Zayed Majlis
Zayed Sustainability Prize
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MADAME%20WEB
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Zayed Sustainability Prize
Jordan cabinet changes
In
- Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
- Dr Bassam Samir Al Talhouni, Minister of Justice
- Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
- Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
- Falah Abdalla Al Ammoush, Minister of Public Works and Housing
- Basma Moussa Ishakat, Minister of Social Development
- Dr Ghazi Monawar Al Zein, Minister of Health
- Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
- Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth
Out
- Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
- Hala Noaman “Basiso Lattouf”, Minister of Social Development
- Dr Mahmud Yassin Al Sheyab, Minister of Health
- Yahya Moussa Kasbi, Minister of Public Works and Housing
- Nayef Hamidi Al Fayez, Minister of Environment
- Majd Mohamed Shoueika, Minister of Public Sector Development
- Khalid Moussa Al Huneifat, Minister of Agriculture
- Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
- Mounir Moussa Ouwais, Minister of Water and Agriculture
- Dr Azmi Mahmud Mohafaza, Minister of Education
- Mokarram Mustafa Al Kaysi, Minister of Youth
- Basma Mohamed Al Nousour, Minister of Culture
Getting%20there%20and%20where%20to%20stay
%3Cp%3EFly%20with%20Etihad%20Airways%20from%20Abu%20Dhabi%20to%20New%20York%E2%80%99s%20JFK.%20There's%2011%20flights%20a%20week%20and%20economy%20fares%20start%20at%20around%20Dh5%2C000.%3Cbr%3EStay%20at%20The%20Mark%20Hotel%20on%20the%20city%E2%80%99s%20Upper%20East%20Side.%20Overnight%20stays%20start%20from%20%241395%20per%20night.%3Cbr%3EVisit%20NYC%20Go%2C%20the%20official%20destination%20resource%20for%20New%20York%20City%20for%20all%20the%20latest%20events%2C%20activites%20and%20openings.%3Cbr%3E%3C%2Fp%3E%0A
Meatless Days
Sara Suleri, with an introduction by Kamila Shamsie
Penguin
MATCH INFO
Uefa Nations League
League A, Group 4
Spain v England, 10.45pm (UAE)
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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Killing of Qassem Suleimani
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
MATCH INFO
South Africa 66 (Tries: De Allende, Nkosi, Reinach (3), Gelant, Steyn, Brits, Willemse; Cons: Jantjies 8)
Canada 7 (Tries: Heaton; Cons: Nelson)
'The Ice Road'
Director: Jonathan Hensleigh
Stars: Liam Neeson, Amber Midthunder, Laurence Fishburne
2/5
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
