Jeremy Hunt has ripped up the UK government's medium-term fiscal plans in an attempt to drag markets back onside and rescue Liz Truss's ailing premiership.
He reversed almost all the measures set out in Kwasi Kwarteng's tax giveaway mini-budget which had resulted in the collapse of the pound and a spike in borrowing rates.
He dramatically scaled back support for household energy bills and ditched promised tax cuts, saying the country needed to generate confidence and stability before it could seek to grow the economy. He signalled public spending cuts are on the way.
The chancellor was installed on Friday after Ms Truss sacrificed Kwasi Kwarteng following weeks of market turmoil which have jeopardised her short tenure in Downing Street. Mr Kwarteng survived just 38 days as chancellor — the second shortest tenure in the post ever.
On Monday, Mr Hunt issued an emergency statement intended to reassure markets and set the government on a new course. He said the changes were to reduce “unhelpful speculation” about his planned changes which will be set out in full in two weeks' time.
The pound strengthened and UK government bonds rallied shortly after Mr Hunt laid siege to the mini-budget. Sterling rebounded by more than 1.2 per cent to 1.139 against the US dollar.
Yields on 30-year government bonds, or gilts, eased back further by around 10 per cent, as the new chancellor set out plans to shave off billions of government debt.
It is the start of what may be a particularly torrid week for UK assets, with the beleaguered Ms Truss battling to rescue her premiership as mutinous backbenchers plot to oust her.
In a televised address, Mr Hunt announced:
· The government will scrap plans to reduce the basic rate of income tax from 20 per cent to 19 per cent in April next year, a move that had been forecast would cost the Exchequer almost £5.3 billion ($5.92bn) in 2023-24.
· Help with energy bills for all households will only last until April, with Mr Hunt announcing a review to look at a “new approach” to target support at those worst off after that. While he had been expected to reverse some of the tax cuts, the change to the energy support scheme had been unexpected.
· The government will ditch plans for new VAT-free shopping for international tourists.
· Cuts to dividend tax rates and the reversal of off-payroll working reforms will not go ahead.
· The government will continue with its planned cut to stamp duty and its reversal of the 1.25 percentage point increase in national insurance contributions.
Mr Hunt said: “No government can control markets but every government can give certainty about the sustainability of public finances, one of the many factors that influence how markets behave.”
He warned more difficult decisions lie ahead on both tax and spending.
He said: “Growth requires confidence and stability and the United Kingdom will always pay its way.”
Regarding the basic rate of income tax, Mr Hunt said it will now stay at 20p until economic conditions allow a reduction.
The rate had been due to fall to 19p from April under Kwasi Kwarteng’s mini-budget, a year earlier than Rishi Sunak had planned.
“It is a deeply held Conservative value — a value that I share — that people should keep more of the money that they earn,” Mr Hunt said.
“But at a time when markets are rightly demanding commitments to sustainable public finances, it is not right to borrow to fund this tax cut.”
Ms Truss's fate could be sealed by the mood of markets in the wake of Mr Hunt's screeching reversal of the mini-budget and her own backbench MPs who fear their seats will be lost in a general election.
Ms Truss is Britain's fourth prime minister in six years, already battling to survive in Downing Street less than six weeks after she came to power promising bold tax cuts and deregulation to reignite economic growth.
Mr Hunt moved swiftly at the weekend to set out his new direction, with some MPs saying he was now the “de facto prime minister”.
There were concerns the markets would blow another hole in the UK's economic plans when they opened on Monday, the first day since the Bank of England withdrew its bond-buying support.
The battered pound and UK government bonds rallied on Monday ahead of Mr Hunt’s emergency statement after the Treasury issued a 6am statement saying Mr Hunt would announce further details of his plans this morning, followed by a statement in the House of Commons later in the day.
But analysts warned the positive market news might only provide a temporary reprieve.
“Trussenomics may have been ripped up and fed to the shredder but the author of the big gamble remains in power, and has the final say on the direction of travel,’’ said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“Investors are craving more stability but, given the flip-flopping we’ve had so far in her super-short tenure, economic policy uncertainty remains and that’s likely to be the key driver in the bond markets and on foreign exchange desks,” she said.
The Treasury said Mr Hunt's move — two weeks earlier than scheduled and coming after talks at the weekend between Mr Hunt and Ms Truss — was designed to “ensure sustainable public finances underpin economic growth”.
“Strong start by Jeremy Hunt as chancellor,” Mel Stride, the Conservative MP who chairs parliament's Treasury committee, said on Twitter ahead of Mr Hunt's statement.
“Gets what needs to be done and is acting fast. Surprising markets positively on the upside with an early statement to House of Commons today is a wise move. Message is: ‘We get what needs to be done and it’s being sorted.'”
Sir Roger Gale, a backbench Conservative MP, told Sky News: “I think Jeremy Hunt has taken on the job … on his own terms.
“He’s said he will do it, but he will only do it if he can do what he believes to be necessary to stabilise the markets, to stabilise the economy and to get the show back on track … There is real power in Downing Street, but it’s not in No 10, it’s in No 11.
“I think Jeremy Hunt is de facto prime minister at the moment.”
Former Tory chief whip Andrew Mitchell claimed Ms Truss has just two weeks left to save her premiership.
Pressed on whether Ms Truss would lead her party into the next general election, Mr Mitchell told Times Radio: “I think the next two weeks will be critical in determining the answer to that question.”
Labour's shadow chief secretary to the Treasury said Mr Hunt's move was “evidence of the panic in government”.
Pat McFadden told BBC Breakfast: “The reason [Mr Hunt] is doing this is because ministers are terrified of what happens when markets open this morning.
“It is testament how much chaos has been caused by Liz Truss since she became prime minister.”
The measures come as Ms Truss continues to fight to hold on to her leadership, with three Conservative MPs already breaking ranks to call on her to go.
Crispin Blunt, Andrew Bridgen and Jamie Wallis all called on the prime minister to quit on Sunday, while other senior figures within the parliamentary party expressed deep unease with her leadership but stopped short of calling for her to go.
UK Chancellor Jeremy Hunt - pictures
Boulder shooting victims
• Denny Strong, 20
• Neven Stanisic, 23
• Rikki Olds, 25
• Tralona Bartkowiak, 49
• Suzanne Fountain, 59
• Teri Leiker, 51
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• Kevin Mahoney, 61
• Lynn Murray, 62
• Jody Waters, 65
RESULT
Manchester City 5 Swansea City 0
Man City: D Silva (12'), Sterling (16'), De Bruyne (54' ), B Silva (64' minutes), Jesus (88')
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
UAE currency: the story behind the money in your pockets
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
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Wonka
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Abu Dhabi World Pro 2019 remaining schedule:
Wednesday April 24: Abu Dhabi World Professional Jiu-Jitsu Championship, 11am-6pm
Thursday April 25: Abu Dhabi World Professional Jiu-Jitsu Championship, 11am-5pm
Friday April 26: Finals, 3-6pm
Saturday April 27: Awards ceremony, 4pm and 8pm
Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
More on Quran memorisation:
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
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SPECS
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
The specs: 2018 Ducati SuperSport S
Price, base / as tested: Dh74,900 / Dh85,900
Engine: 937cc
Transmission: Six-speed gearbox
Power: 110hp @ 9,000rpm
Torque: 93Nm @ 6,500rpm
Fuel economy, combined: 5.9L / 100km
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Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
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more from Janine di Giovanni
Springtime in a Broken Mirror,
Mario Benedetti, Penguin Modern Classics
Ain Issa camp:
- Established in 2016
- Houses 13,309 people, 2,092 families, 62 per cent children
- Of the adult population, 49 per cent men, 51 per cent women (not including foreigners annexe)
- Most from Deir Ezzor and Raqqa
- 950 foreigners linked to ISIS and their families
- NGO Blumont runs camp management for the UN
- One of the nine official (UN recognised) camps in the region
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
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BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
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Fuel consumption: 10.6L/100km
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Price: From Dh650,000
ICC T20 Team of 2021
Jos Buttler, Mohammad Rizwan, Babar Azam, Aiden Markram, Mitchell Marsh, David Miller, Tabraiz Shamsi, Josh Hazlewood, Wanindu Hasaranga, Mustafizur Rahman, Shaheen Afridi
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Three ways to get a gratitude glow
By committing to at least one of these daily, you can bring more gratitude into your life, says Ong.
- During your morning skincare routine, name five things you are thankful for about yourself.
- As you finish your skincare routine, look yourself in the eye and speak an affirmation, such as: “I am grateful for every part of me, including my ability to take care of my skin.”
- In the evening, take some deep breaths, notice how your skin feels, and listen for what your skin is grateful for.
UAE currency: the story behind the money in your pockets
The 12 breakaway clubs
England
Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, Tottenham Hotspur
Italy
AC Milan, Inter Milan, Juventus
Spain
Atletico Madrid, Barcelona, Real Madrid
COMPANY%20PROFILE
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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)
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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”.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Company%20profile
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