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UK economic growth slowed in February following a sharp fall in the production of cars and computer goods

   News / 11 Apr 2022

Published: 11 April 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight


UK economic growth slowed in February following a sharp fall in the production of cars and computer goods. The Office for National Statistics(ONS) said the economy expanded by 0.1% compared with 0.8% in January. The fall in manufacturing was off-set by growth in the services sectorincluding areas such as tourism and travel. The ONS also said however that the UK economy is 1.5% above its pre-coronavirus pandemic level in February 2020.
 
Last week, Health Secretary Sajid Javid said there was a “moral” duty for people to pay more tax in the form of the rise in National Insurance to pay for the NHS and social care. However, the Sunday Times has now forced Javid to admit that he paid no UK tax on his overseas earnings for six years while he was a banker earning up to £3 million a year because he claimed non-domstatus between 2000 and 2006 as his father was born in Pakistan. In a statement issued on Saturday night, he also said he made money from an offshore trust while working at Deutsche Bank 20 years ago, but on becoming a minister in 2012 “decided to voluntarily collapse that trust, repatriate all assets to the UK and pay 50 per cent income tax on those assets” because it was “the right thing to do”. He insisted he had been domiciled in the UK throughout his “entire public life”. Meanwhile, some reports suggest Chancellor Rishi Sunakconsidered resigning because of attacks on his wife’s non-dom status last week. He said on Friday that questions over his wife's tax arrangements were politically motivated attempts to damage him, however a few hours later, Akshata Murty said she would start paying British tax on her foreign income.
 
Pensioners and benefits claimants will see the value of their payments fall to the lowest point in 50 years on Monday, anti-poverty campaigners say, because Britain is facing the worst cost of living crisis since 1972. Despite everyday prices rising as much as 8%, and gas and electricity bills almost doubling to £2,000 a year, the state pension and most other state benefits will rise by only 3.1% today.
 
Britain’s ‘money saving expert’ Martin Lewis warned yesterday that civil unrest over rising energy bills “isn’t far away” and repeated his call for more government intervention to protect people. Lewis said he was the most scared he has been for people’s finances since he founded his popular website in 2003, which offers advice on how to save money and which service providers – such as banks, phone, insurance and energy suppliers - are the most cost-effective.  In an interview with the Sunday Telegraph, he said: “We need to keep people fed. We need to keep them warm. If we get this wrong right now, then we get to the point where we start to risk civil unrest. When breadwinners cannot provide, anger brews and civil unrest brews – and I do not think we are very far off.” “I get all these messages from people tearing their hair out,” he added. “They don’t know how to make things add up.”
 
The World Bank is predicting that Ukraine’s economy is on course to contract by 45% this year because of the Russian invasion and the impact of a “deep humanitarian crisis.” The Washington-based development organisation said Russia would also fall into recession and many countries surrounding Ukraine would suffer severe hardship, with some pushed to seek outside help from international agencies to prevent them defaulting on existing debts.
 
UK hauliers carrying perishable goods are asking for priority to be given to them as they are forced to sit in long queues to cross into Europe at Dover, the BBC reports. Bad weather, the Easter holidays and P&O Ferries routes being suspended have led to congestion around the port, and the British Meat Processors Association said some of its members had waited for 24 hours or more to cross. A Department for Transport spokesperson said traffic management measures were under regular review but gave no indication that there would be a change made for those transporting perishable items. There have also been problems with broken down trains and a key IT system for custom checks at the UK's busiest port after Brexit. The Kent Resilience Forum, which manages emergency planning for the county, said traffic disruption around Dover is the worst it's been since 2020. The forum manages Operation Brock, the traffic management plan which allows lorries using the M20 into Dover between junctions eight and nine to use one side of the motorway, allowing other traffic to flow in both directions. It's been extended today to junction 11 to deal with the extra congestion. Operation Brock normally has the capacity for around 2,000 lorries, but it's now holding up to 4,000.
 
The Telegraph says airlines are bracing themselves for a £100m compensation bill because of Easter travel chaos at airports, which shows no sign of abating. Around 1,200 flights have been cancelled over the past week and a similar number are expected to be axed over the next seven days. Bosses have attacked Whitehall bureaucracy for long delays in completing counter-terrorism checks for new workers now Covid travel restrictions have been lifted. A spike in Covid-related staff absences has also been blamed. Consumer law stipulates passengers affected by cancellations must either be offered an alternative flight of their choice or they can claim at least £210, as can passengers delayed in excess of two hours.
 
Heathrow Airport, meanwhile, has recorded its busiest month since the start of the coronavirus pandemic. The west London airport said it was used by 4.2 million passengers in March, almost an eight-fold increase on the total during the same month in 2021.
 
Chemicals and energy giant Ineos has offered to drill a shale gas test site in the UK to demonstrate fracking can be done safely. Ineos founder and chairman Sir Jim Ratcliffe said: “The UK is in the midst of an energy crisis with ever increasing prices driving people into fuel poverty whilst giving huge sums of money to oppressive regimes. It’s a ridiculous situation with so much gas under our feet and we are today offering to drill a shale test site to show that a competent operator can be trusted to develop the technology safely. Shale gasfrom home could make us self-sufficient in 10 years and we need to re-examine this”. The Government has commissioned a review into the science around fracking, despite a moratorium on the process having been brought in over the tremors it caused. However, Ineos says this moratorium was imposed because the “science behind shale was totally ignored and politicians bowed to an extreme vocal minority.”
 
Buy-to-let landlords purchased one in every 10 properties (13.9%) sold across Great Britain in the first three months of 2022, the Hamptons monthly index shows. Investors bought 42,980 homes across the country, around £8.5bn worth of property, almost twice the figure (£4.6bn) recorded pre-COVID in the first three months of 2019. Appetite in property is on the rise as investors look to the highest yielding areas of the country to maximise their returns and hedge against inflation, Yahoo Finance UK says. So far this year, over two-thirds (71%) of investors bought in the 50% of highest yielding areas of the country, up from 57% a decade ago. Nearly three quarters (73%) of London-based landlords also bought their buy-to-lets outside the capital this year, where yields tend to be higher, up from less than a quarter (24%) a decade ago.
 
TalkTalk is facing a queue of potential suitors, according Sky News, among them FTSE 100 mobile and broadband conglomerate Vodafone and Comcast's UK subsidiary Sky.
 
The former head of Goldman Sachs in Malaysia has been convicted for helping to orchestrate one of the world's biggest financial corruption scandals. A US jury found Roger Ng guilty on all charges in the trial, which concerned the looting of billions of dollars from Malaysia's 1MDB sovereign wealth fund. He is the only Goldman Sachs banker to face a jury over the scandal, which rocked Malaysian politics and forced the bank to pay billions in fines.
 
Elon Musk has decided he will not sit on the board of Twitter, after all. He bought a 9.2% stake in the firm la couple of weeks’ ago, becoming the social media company’s largest shareholder, and was offered the position on Tuesday last week. Twitter will remain open to his input, CEO  Parag Agrawal said.


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