British homeowners face soaring mortgage interest payments

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    British homeowners face soaring mortgage interest payments

    Mortgages are ALREADY getting more expensive: NatWest, HSBC and Barclays ALL put up rates just hours after Budget… as experts warn that Bank of England could be forced to increase interest rates as soon as NEXT WEEK

    • Analysis suggests homeowners should prepare for biggest rise in interest payments since financial crisis
    • OBR says rising inflation may prompt Bank of England to hike interest rates from 0.1% to 0.75% by end of 2023
    • Forecasters say this would have a massive knock on effect on amount of interest mortgage payers have to pay
    • Expert tells homeowners to cut back on unnecessary spending and make overpayments while rates are low
    • ** Are you trying to get a mortgage but concerned about rising rates? Please email: tips@dailymail.com ** 

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    What would a 13% rise in mortgage interest payments mean?

    ** Are you trying to get a mortgage but concerned about rising rates? Please email: tips@dailymail.com ** 

    The Office for Budget Responsibility said rising inflation may prompt the Bank of England to put up interest rates from the current 0.1 per cent to 0.75 per cent by the end of 2023.

    The forecasters said this would see the amount homeowners pay in mortgage interest soar by 13 per cent in 2023. This would be followed by a rise of 5.4 per cent the year after.

    VARIABLE-RATE MORTGAGES 

    Analysis looked at how the average mortgage borrower on a variable rate mortgage had an interest rate of 3.26 per cent in August 2021, according to the latest Bank of England data.  

    A borrower with an average-price house of £264,244 and a 25-year, 80 per cent Loan To Value (LTV) at this rate would see their monthly interest payment rise 13 per cent from £326.72 a month to £369.19 a month in 2023.

    That is an extra £42.47 a month or £510 a year.

    FIXED-RATE MORTGAGES 

    A borrower on a 2 per cent fixed rate mortgage with a £264,244 home and a 25-year, 80 per cent LTV mortgage would be paying £191.52 a month in interest. 

    A 13 per cent increase in 2023 would see this rise to £216.41 a month, so an extra £24.90 a month or £299 a year.

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    Mortgage interest rates already started going up today amid warnings that Britain’s homeowners face soaring payments in the coming year – with brokers advising them to make overpayments now while rates are still low.

    Barclays said today it was hiking rates by up to 0.35 percentage points on a range of fixed-rate mortgages and Halifax today announced rises of up to 0.20 percentage points on a handful of products from November 1.

    HSBC also said its rates would go up, and NatWest has increased rates on a range of its fixed deals by 0.1 per cent since Chancellor Rishi Sunak spoke yesterday, and TSB said they would be increasing their rates tomorrow.

    One expert said it was ‘another, unwanted squeeze on the family budget’, while another said homeowners should get on a fixed rate now, with those on a variable rate expected to feel the impact of inflation the greatest.

    Forecasts produced by the Office for Budget Responsibility (OBR) alongside Mr Sunak’s Budget yesterday suggested homeowners will have to prepare for the biggest hike in interest payments since the financial crisis.

    This is because, according to the Treasury-funded public body, rising inflation may prompt the Bank of England to put up interest rates from the current 0.1 per cent to 0.75 per cent by the end of 2023. The OBR also said that in a worst-case scenario, interest rates would hit 3.5 per cent by then. 

    The forecasters said even a 0.75 per cent interest rate would have a huge knock on effect on the amount of interest mortgage payers have to pay.

    They said that it would see the amount paid in mortgage interest soar by 13 per cent in 2023 – followed by another rise of 5.4 per cent the year after.  

    Lewis Shaw, a mortgage expert at Shaw Financial Services in Mansfield, Nottinghamshire, urged calm today but also told MailOnline that people should ‘talk to a broker, cut back on unnecessary spending, and make overpayments on your mortgage whilst rates are low’. 

    And Ashley Thomas, director at Magni Finance in London, added that he has seen ‘a number of lenders slightly increase their rates over the last week’ and it was ‘inevitable that rates will increase going forward’. 

    MoneySuperMarket said the OBR’s warnings ‘make for sobering reading, particularly for home owners with standard variable rate mortgages’. 

    Analysis by the Liberal Democrats – considering the 0.75 per cent interest rate rise – began by looking at how the average mortgage borrower on a variable rate mortgage had an interest rate of 3.26 per cent in August 2021, according to the latest data from the Bank of England. 

    A borrower with an average-price house of £264,244 and a 25-year, 80 per cent Loan To Value (LTV) at this rate would see their monthly interest payment rise 13 per cent from £326.72 a month to £369.19 a month in 2023. That is an extra £42.47 a month or £510 a year.

    Meanwhile a borrower on a 2 per cent fixed rate mortgage with a £264,244 home and a 25-year, 80 per cent LTV mortgage would be paying £191.52 a month in interest. A 13 per cent increase in 2023 would see this rise to £216.41 a month, so an extra £24.90 a month or £299 a year.

    Separately, MailOnline looked at a doomsday scenario of interest rates at 3.5 per cent by 2023 under the OBR’s worst-case possibility. If mortgage rates were to rise by the same level as the base rate by 2023, and it was at 3.5 per cent, homeowners could be paying hundreds of pounds more a month.

    For example, a household with a £200,000 mortgage on one of the cheapest rates available today, 0.9 per cent, is currently paying £745. Were the base rate to increase from 0.1 per cent to 3.5 per cent in 2023, and their mortgage by the same amount, the cost would rocket by £344 to £1,089.

    Lib Dem leader Sir Ed Davey warned that the expected rise is the biggest threat to homeowners since the 2008 financial crisis. He said it could see them struggling to make ends meet with rising inflation and mortgage costs at the same time.

    The figures were contained in documents published by the OBR alongside yesterday’s Budget. They use the OBR’s central forecast which would see interest rates rising to 0.75 per cent. 

    What 3.5% interest rates would mean for your mortgage

    Mortgage rate now Monthly payment – £200,000 mortgage Monthly payment – £500,000 mortgage  Rate on remortgage at same % LTV in 2023 (+3.4%) 2023 Monthly payment – £200,000 mortgage 2023 Monthly payment – £500,000 mortgage
    0.90% £745 £1,861 4.30% £1,089 £2,722
    1.50% £799 £2,000 4.90% £1,157 £2,894
    2.50% £897 £2,243 5.90% £1,276 £3,191
    3.50% £1,001 £2,503 6.90% £1,401 £3,502

    If mortgage rates were to increase by the same level as the base rate by 2023, and the latter hit the Office for Budget Responsibility’s worst-case scenario of 3.5 per cent, homeowners could be paying hundreds of pounds more a month.

    For example, a household with a £200,000 mortgage on one of the cheapest rates available today, 0.9 per cent, is currently paying £745. Were the base rate to increase from 0.1 per cent to 3.5 per cent in 2023, and their mortgage by the same amount, the cost would rocket by £344 to £1,089.

    For those with larger loans, the cost increases would be even more dramatic. Take the example of a young family who just bought their first home in the South East with a £500,000 mortgage. 

    As they did not have a large deposit, they are currently on a higher mortgage rate of 3.5 per cent. Were that to rise by the same level as the base rate in 2023, their monthly payment would soar from £2,503 today to £3,502 – just shy of £1,000.

    If the homeowners had built up more equity in their property during their last fixed term and could put down a larger deposit when they remortgaged, they would probably be able to decrease their rate slightly. However, their monthly payments would still be far more expensive than they are today.

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    According to the OBR, rising inflation may prompt the Bank of England to put up interest rates from the current 0.1 per cent to 0.75 per cent by the end of 2023. The forecasters said this would have a massive knock on effect on the amount of interest mortgage payers have to pay. They say it would see the amount people pay in mortgage interest soar by 13 per cent in 2023

    According to the OBR, rising inflation may prompt the Bank of England to put up interest rates from the current 0.1 per cent to 0.75 per cent by the end of 2023. The forecasters said this would have a massive knock on effect on the amount of interest mortgage payers have to pay. They say it would see the amount people pay in mortgage interest soar by 13 per cent in 2023

    Forecasts produced by the Office for Budget Responsibility alongside yesterday's Budget suggest rising inflation may prompt the Bank of England to put up interest rates from the current 0.1 per cent to 0.75 per cent by the end of 2023

    Forecasts produced by the Office for Budget Responsibility alongside yesterday’s Budget suggest rising inflation may prompt the Bank of England to put up interest rates from the current 0.1 per cent to 0.75 per cent by the end of 2023

    This MoneySavingExpert analysis looks at how two-year mortgage and swap rates compare, going back to pre-pandemic

    This MoneySavingExpert analysis looks at how two-year mortgage and swap rates compare, going back to pre-pandemic

    The Institute for Fiscal Studies has said that over the next five years, real household disposable income is expected to grow by 0.8 per cent per year, which is significantly below the historical average. But growth had been weak in the decade before the pandemic began, meaning average incomes are now forecast to be 28 per cent (£9,000 per capita) below the pre-2008 trend

    The Institute for Fiscal Studies has said that over the next five years, real household disposable income is expected to grow by 0.8 per cent per year, which is significantly below the historical average. But growth had been weak in the decade before the pandemic began, meaning average incomes are now forecast to be 28 per cent (£9,000 per capita) below the pre-2008 trend

    They warn interest rates could rise even higher. The forecasters said the rises are on the cards because a ‘wage spiral’ or energy shock could drive inflation to a three-decade high of more than 5 per cent next year.

    It said this would force the Bank of England to raise interest rates – a move which would have major repercussions for mortgage holders.

    We’re worried about our home loan, say musicians paying £1,200 a month on a two-year 2% fixed rate

    By AMELIA CLARKE 

    With a current fixed mortgage rate of just two per cent, classical musicians Lucy and Matthew Knight worry they could be hit by rising inflation when the time comes to renegotiate.

    Lucy and Matthew Knight (pictured with their one-year-old daughter, Darcey) fear they will be hit by rising inflation

    Lucy and Matthew Knight (pictured with their one-year-old daughter, Darcey) fear they will be hit by rising inflation

    The couple are paying around £1,200 a month for their mortgage on their detached house – more than they were prior to the pandemic as they took advantage of a mortgage holiday.

    With interest rates predicted to reach 5 per cent, they fear it ‘would definitely have implications’ once their 2 per cent fixed rate comes to an end in a year, as they would end up paying significantly more than they had planned to.

    Mrs Knight, 34, an English National Opera singer, said: ‘We’re on a five year fixed rate mortgage so the inflation rate could affect us later down the line when re-mortgage.’

    She and her 35-year-old husband, a trombonist for the Philharmonic Orchestra, lost all their income during the pandemic and started their own business, Treble and Trumpet, which records classical nursery rhymes for little ones, while stuck at home with their new baby, Darcey.

    With a house to renovate, soaring energy bills and the cost of living rising, the couple, of Great Missenden, Buckinghamshire, were waiting expectantly to see if Government announcements would benefit them.

    Mrs Knight said it was ‘disappointing’ no green initiatives were announced, as running their household is not going to get any cheaper.

    They moved out of London and bought their current home aiming to renovate it to make it as eco-friendly as possible.

    They got as far as insulating and rewiring their new home before the pandemic hit and they were left without the funds to continue their project.

    Their electricity bills with renewable energy company Bulb have doubled in the last month and they had hoped to install solar panels in an attempt to reduce this. However, they have been holding off on the £8,000 to £10,000 expenditure.

    They had hoped for green home initiatives from the Government to aid them in their attempt to become more eco-friendly, but have been left without the help they were looking forward to.

    Mrs Knight said: ‘We weren’t eligible for the Self Employed Income Support Scheme as there were such strict guidelines, so we were part of the three million self-employed who did not get any help.

    ‘After a difficult few years where the music industry has been hit hard by the pandemic, we were hoping for green initiatives to make the cost of living cheaper in the long run and it’s disappointing. During the pandemic we set up the business to work from home but with rising energy costs it would have been nice to see something from the government that acknowledges running a business from home costs more now. 

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    The predicted rise is due to a combination of record house prices and years of rock-bottom interest rates.

    Sir Ed said: ‘The Chancellor has created the perfect storm. It is now the worst time in a generation to be a homeowner.

    ‘British homeowners face the toxic cocktail of interest rate rises, house prices surges, and council tax hikes just around the corner.

    ‘This ghastly forecast should send a shiver down the Chancellor’s spine. The way he brushed off the cost of living crisis in the budget was careless and completely out of touch with the country. If he can’t get a grip on this cost of living crisis, how on earth is he going to cope with a mortgage crisis?

    ‘People who work hard and play by the rules deserve a fair deal. Enough is enough, it is time to scrap the tax hikes and solve this cost of living crisis to defuse this ticking mortgage timebomb.’  

    Among those concerned by rising inflation are classical musicians Lucy and Matthew Knight, who have a 2 per cent fixed-rate mortgage – and fear they will be hit by rising inflation when they have to renegotiate in a year.

    The couple, who live in a detached house in Great Missenden, Buckinghamshire, with one-year-old daughter Darcey, pay around £1,200 a month.

    But with interest rates predicted to reach 5 per cent, their next deal could cost significantly more.

    Mrs Knight, 34, an English National Opera singer, said: ‘We were also hoping for green initiatives to make the cost of living cheaper in the long run, and it’s disappointing.’

    MailOnline heard from a series of mortgage experts about the situation today, with Mr Thomas saying: ‘We have seen a number of lenders slightly increase their rates over the last week. It is inevitable that rates will increase going forward, as they have been very low for a long time.

    ‘The fixed rates are still very competitive. You can secure a rate below 1 per cent depending on your situation, so it is definitely worth considering a fixed rate. 

    ‘If you are on the lender’s Standard Variable Rate and you have no plans to move or overpay, you would save a significant amount securing a fixed option whilst the rates are low.’

    Dominik Lipnicki, director of Your Mortgage Decisions, based in Market Deeping, Cambridgeshire, said: ‘We have already seen lenders such as NatWest reacting to yesterday’s budget and increasing rates. 

    ‘Whilst the increases may sound modest, for many borrowers already suffering from inflation, higher energy and fuel prices, this will be yet another, unwanted squeeze on the family budget. 

    ‘What will further worry borrowers is that Rishi Sunak started his budget speech by effectively giving a green light to the Bank of England to do what they have to in terms of managing inflation and that may well result in a base rate hike in the short to medium term, pushing mortgage rates even higher.’

    Jo Thornhill, money expert at MoneySuperMarket, told MailOnline: ‘Yesterday’s warnings from the OBR about rising interest rates and inflation make for sobering reading, particularly for home owners with standard variable rate (SVR) mortgages who could see their monthly payments rise significantly if the OBR’s predictions play out.

    ‘If you’re looking to cushion yourself against the risk of price rises, it’s worth shopping around for a new mortgage deal. If you’re on a standard variable rate, consider moving onto a fixed rate deal. Now is a great time to be doing this with a range of 1.5 per cent to 2 per cent deals available, while the past four months have seen the availability of deals with rates lower than 1 per cent quadruple.

    ‘There are good deals currently available for all types of homeowners whether you’re a first time buyer or re-mortgaging. And, as is always the case, the lower your loan to value rate, the more likely it is that you’ll be able to unlock some of the lowest interest rate deals.

    ‘Before switching, make sure you familiarise yourself with the terms of your existing mortgage and the one you’re considering. This is really important because changing providers can come with costs such as legal and booking fees. You should also think carefully about whether you can afford the monthly repayments.’

    And Martijn Van Der Heijden, chief executive of mortgage broker, lender and digital home-buying service Habito, said: ‘Heavy signals from BoE has left many economists predicting a rate rise this year in order to curb inflation.

    ‘This adds to the squeeze household finances are already seeing with increased energy and food prices as well as increases in National Insurance payments.

    ‘Lenders have already been seen to be increasing their rates – NatWest upped theirs overnight, whilst TSB are increasing theirs tomorrow – albeit by small amounts so far, 0.10 per cent increases.

    ‘Borrowers who are on a variable rate will feel the impact of inflation the greatest, even if the rate increases by as little as 0.25 per cent, this could see their repayments shoot up by hundreds of pounds a year, so it’s worth looking at all the options.

    ‘For savvy homeowners, now is the time to fix, as for those on long-term fixes, rising inflation effectively eats into the value of their mortgage debt and offers protection from any further rises down the line.’

    Simon Gammon, managing partner of mortgage broker Knight Frank Finance, told the Financial Times: ‘We do expect interest rates to rise. Whether it’s this side of Christmas or just after, time will tell, but it’s imminent.

    ‘Therefore my advice to anyone who is looking to borrow or needs to review their mortgage product in the next six to nine months is do it now, because you could end up locking in a product that you won’t have access to at Christmas time or in spring. Now is the time to move.’ 

    Chancellor Rishi Sunak stops at a stand at Bury Market in Greater Manchester today, one day after his Budget announcement

    Chancellor Rishi Sunak stops at a stand at Bury Market in Greater Manchester today, one day after his Budget announcement

    In a stark assessment alongside the Budget, the Office for Budget Responsibility (OBR) said its central forecast is for headline CPI to peak at 4.4 per cent in the second quarter of year

    In a stark assessment alongside the Budget, the Office for Budget Responsibility (OBR) said its central forecast is for headline CPI to peak at 4.4 per cent in the second quarter of year

    In both scenarios, CPI inflation could go up to 5.4 per cent, with the OBR saying that the Bank of England base rate would need to soar to 3.5 per cent from the low of 0.1 per cent now

    In both scenarios, CPI inflation could go up to 5.4 per cent, with the OBR saying that the Bank of England base rate would need to soar to 3.5 per cent from the low of 0.1 per cent now

    And Robert Payne, co-founder of Bristol-based Langley House Mortgages, told MailOnline: ‘There is no doubt that rates will rise. The base rate is the lowest it has ever been and it is simply not sustainable.

    What a rate rise means

    What is the bank rate?

    Also known as the base rate, this is the Bank of England’s benchmark interest rate that banks and other financial institutions use to price their loans and savings rates.

    Where is it now?

    The bank rate is still at an all-time low of 0.1 per cent, where it was cut to in March 2020, in order to help ward off pandemic-induced economic crisis. It has been at or below 0.75 per cent ever since the aftermath of the financial crisis in February 2009.

    Is it about to go up and why?

    Markets and economists think so. The Bank of England is supposed to set the bank rate to control inflation, and prevent it going above 2 per cent. However, as the economy has been in the doldrums for many years, inflation has not been a threat. 

    This year however, with the sudden economic recovery from lockdown, the surging oil price and the various supply chain blockages it has returned with a vengeance. Inflation is now at 3.1 per cent and set to go higher. 

    Money markets and economists say there is a good chance that the BoE could raise rates in November and almost certainly in December.

    What changed yesterday?

    Accompanying the Autumn Budget, the Office for Budget Responsibility forecasts showed inflation peaking at 4.4 per cent in the second quarter next year and to average 4 per cent over 2022. 

    Rishi Sunak also said he had written to BoE Governor Andrew Bailey to remind him of the importance of controlling inflation.

    So rates are going up?

    Yes it is just a question of when and how much. Initial rises are likely to be cautious: to just 0.25 per cent or 0.50 for the bank rate. It seems odds-on we’ll get a hike by the endof the year.

    The OBR warned that inflation could go even higher – above 5 per cent – and in in a worst-case scenario the implied interest rates that would be required to get inflation back down would be a bank rate of 3.5 per cent. 

    What difference will that make to me?

    Even in the best-case scenario, mortgage rates will start to creep up and the best current mortgage deals will start to be pulled.

    If you are on a variable rate deal or a tracker you could see an increase in monthly payment very soon after any rate hike. If you are on a fixed deal then, you are protected until it expires. But it does mean some of the best deals that are around now might not be by the time you come to arrange a new mortgage.

    What can I do?

    If you are on a variable rate – especially if it is an expensive standard variable rate – you might want to think about applying for a two or even a five-year fixed rate while they are cheap. Those on fixed rate deals already can apply for a new rate six months before their mortgage expires so it might pay to start looking now.

    But at least savings rates will start to rise?

    We can hope. But it is really up to banks how quickly and how much they pass on rate rises in the form of better savings rates. Historically, they have been much quicker to hike mortgage rates than savings rates.

     

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    ‘Reducing rates is a weapon in the Government’s armoury to combat economic challenges but that weapon is firing the last of its ammunition and it can’t continue for much longer.

    ‘There is no specific deadline for when rates will rise and each lender will choose when to amend their product offering but it’s likely to be imminently, so if your current deal expires in the next six months it is worth speaking to a broker now to lock a new rate in.’ ‘

    He also spoke about the options available and told how some people might want to look at longer-term fixed rates.

    Mr Payne said: ‘We’ve seen a big increase in longer-term fixed rates being taken up as people look to take advantage of the low rates before they inevitably rise.

    ‘Five-year fixed rates tend to be the most popular option as many don’t feel comfortable being tied in for longer than that. 

    ‘Personally, I feel that longer term fixes are undersold and could be suitable for many borrowers, especially given that there are some ten-year fixed rates with five-year early repayment charges, which give ultimate security and flexibility.’

    Meanwhile Mr Shaw, from Shaw Financial Services, urged caution over circulating rumours that mortgage rates would be going up at midnight, saying ‘it’s not going to happen’.

    He told MailOnline: ‘That’s not how lenders work. They certainly never move in unison as they’re always trying to outmanoeuvre one another rather than price fix the market which would see them all hauled over the coals by the regulator.’

    Mr Shaw added: ‘Will mortgage payments rise by a third? Absolutely not. If that happened there would be repossessions and an economic hit of such magnitude it would make 2008 look like a walk in the park.

    ‘If people are currently on their lender’s standard variable rate then it would be a good idea to look to remortgage on to a better deal and lock in for maybe five years depending on their circumstances.

    ‘I expect mortgage rates to rise in the event of a Bank of England rise but this is will be marginal and as long as people take the necessary steps with a bit of financial planning and management it shouldn’t really hurt too much.’

    He continued: ‘At the moment rates are still at historically low prices and even if they were to jump in unison across the board by 0.5 to 1 per cent, they’d still be better than most rates from the last 25 years.’

    Mr Shaw advised people to ‘talk to a broker, cut back on unnecessary spending, and make overpayments on your mortgage whilst rates are low’. 

    Karthik Srivats, co-founder of mortgage lender Ahauz which specialises in helping first-time buyers get on the property ladder, said: ‘A whole generation of borrowers has grown up in a climate of super-low interest rates, so the threat of steady increases will have many anxiously reaching for their calculators.

    ‘Older borrowers will remember a time in the 1970s when interest rates climbed as high as 17 per cent causing hardship for millions, but that’s not something we expect to see again. Far more likely is a gradual increase over time rather than any sudden spike.

    ‘And while rates will continue to remain low by historical standards, would-be first-time buyers will still feel like they’re in the firing line.

    ‘This spectre of increased borrowing cost comes at a time of soaring energy bills, higher National Insurance contributions, and the end of the government’s furlough scheme. Not to mention ever increasing house prices and stringent affordability tests when shopping for a mortgage.

    ‘Fixing your mortgage rate now while the best bargains are still on offer will seem like common sense to many. Moving from a variable to a fixed rate allows borrowers to insulate themselves against future hikes meaning they can budget better for the future.’

    And Imran Hussain, director at Harmony Financial Services in Nottingham, told MailOnline: ‘It should come as no surprise to anyone unless one has been living under a rock that rates have been low for a long time and will rise eventually.

    ‘One thing that should be certain is that they will not increase astronomically to rates which some may remember from the 80s where the average rate was 16.63 per cent. 

    Public sector net borrowing will be lower than had been expected in March, thanks to the improved overall economic picture

    Public sector net borrowing will be lower than had been expected in March, thanks to the improved overall economic picture

    Public sector debt does not rise as high under the latest OBR projections

    Public sector debt does not rise as high under the latest OBR projections 

    The tax burden is going to its highest level since the Second World War, despite Rishi Sunak's promise that he wants to cut it

    The tax burden is going to its highest level since the Second World War, despite Rishi Sunak’s promise that he wants to cut it 

    ‘What lenders have been doing recently is being ultra-competitive for those borrowers with 25 per cent or higher in deposit or equity as this allows lenders to balance their risk and currently, any rate changes have been nominal such typically 10bps, which in plain English is 0.1 per cent, and for borrowers already tied into fixed rates there is no need to panic as they will remain unaffected until re-mortgage time.’

    Budget 2021: key points

    • Rishi Sunak said he was creating ‘a stronger economy for the British people’
    • He warned of continuing challenges from Covid 
    • Office for Budget Responsibility says inflation expected to average 4 per cent over the next year, was 3.1 per cent in September.
    • Sunak: ‘The pressures caused by supply chains and energy prices will take months to ease.’ 
    • Vehicle excise duty for HGVs frozen for a year  
    • Suspension of HGV levy extended for another year 
    • OBR says economy will return to pre-Covid levels at the turn of the year, earlier than expected
    • Forecast 6.5 per cent growth this year, up from 4 per cent, then 6 per cent in 2022. 
    • But lower rates of 2.1 per cent in 2023, 1.3 per cent in 2024 and 1.6 per cent in 2025 
    • Unemployment forecast to peak at 5.2 per cent, lower than expected 
    • Foreign aid budget will go back up to 0.7 per cent on GDP by 2024/2025, having been cut to 0.5 per cent
    • Every Whitehall department will get a ‘real terms rise in overall spending’ as part of the Spending Review, amounting to £150 billion
    • Borrowing as a percentage of GDP is forecast to fall, from 7.9 per cent this year to 3.3 per cent next year, then 2.4 per cent, 1.7 per cent, 1.7 per cent and 1.5 per cent in the following years. 
    • A levy will be placed on property developers with profits over £25 million at a rate of 4 per cent to help create a £5 billion fund to remove unsafe cladding 
    • The national minimum wage will increase from £8.91 to £9.50 from April next year. 
    • NHS gets an extra £6billion to pay for new equipment and new facilities to clear Covid backlog. 
    • Brownfield sites covering the equivalent of 2,000 football pitches could be turned into plots for housing as part of a £1.8billion injection. 
    • A £2.6billion pot of funding set up to help children with special educational needs and disabilities. 
    • Levelling up transport outside of London will benefit to the tune of nearly £7billion, paying for a range of projects, including tram improvements. 
    • The Department of Health and Social Care will receive £5billion over the next three years to fund research and development in areas such as genome sequencing and tackling health inequalities. 
    • A cash injection of £3billion will be given to both post-16 education but also to adults later in life. 
    • £850million spent over three years to ‘breathe life’ back into cultural hotspots like London’s V&A museum, Tate Liverpool and Imperial War Museum Duxford
    • Ageing Border Force vessels will be replaced by new cutters as part of a £700million investment to improve the safety of Britain’s borders. 
    • An 8 per cent cut to the Universal Credit taper rate meaning working recipients keep more benefit cash 
    • He outlined the ‘most radical simplification of alcohol duties for over 140 years’ that cuts number of rates paid from 15 to six
    • The stronger the drink the higher the rate, as some high-percentage beverages are ‘under-taxed’
    • New ‘small producer relief’ to include small cidermakers and other producers making alcoholic drinks of less than 8.5% alcohol by volume (ABV).
    • ‘Draught relief’ – a new, lower rate of duty on draught beer and cider.  
    • Fuel duty rise cancelled for the 12th year in a row 

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    Meanwhile Joshua Gerstler, a chartered financial planner and owner at the Orchard Practice in Borehamwood, Hertfordshire, told MailOnlinbe: ‘It’s important not to panic and to not feel pressured into making a rushed decision. 

    ‘I have not yet seen any changes in mortgage rates as a result of the budget and do not expect to. They are more likely to be impacted by interest rate expectations. Even if mortgage rates do increase, they are still extremely low and there are some great deals to be had.’

    And Nicholas Christofi, managing director of London-based Sirius Property Finance, told MailOnline: ‘Very few mortgages are linked to the Bank of England base rate as a result of the credit crunch and so any movement is unlikely to immediately impact the consumer. 

    ‘When this movement does materialise lenders may start to follow suit, so those on a variable rate could see an increase in the cost of their mortgage repayments.

    ‘But this is no cause for panic, mortgage rates ebb and flow and while there may increase, this is not a return to the 1990s. Mortgage rates will remain near to historic lows and regulations have dictated for some time that new borrowers are ‘stretch tested’ before being granted a loan to avoid any financial turmoil.

    ‘For those who may be concerned, fixed-rate deals are still extremely cheap compared to historic costs, but there’s certainly no need to feel pressured into locking one in today.’

    Scott Taylor-Barr, financial adviser at Carl Summers Financial Services in Newport, Shropshire, added: ‘Interest rates have been setting record low after record low for a few years now, so a rise is going happen. The questions are when and by how much? 

    ‘The Bank of England have stated many times that when they increase the base rate it will be in small increments and over a long period of time, as the economy is unlikely to tolerate a large jump in the base rate, especially given all the other factors businesses and individuals are currently facing. 

    ‘That being said, there is actually not a direct link between the base rate at the Bank of England and the retail interest rates most households have. So it could be that mortgage interest rise, even if the base rate doesn’t, or they could rise at a different pace.

    ‘It is equally conceivable that competitive pressures mean that retail interest rates rise at a slower rate than the Bank of England rate. It will all come down to how much the base rate rises, what the big High Street banks do and where any given lender is sourcing the funds they are lending out as mortgages. Ultimately any borrower knows that rates can rise at any time and we have had it very good, for a very long time.’

    And Rhys Schofield, managing director at Peak Mortgages and Protection in Belper, Derbyshire, said: ‘There have been some slight increases in some lenders rates over the last few weeks but this seems to be independent of the Budget. It just isn’t sustainable in the long term to offer borrowing rates in some cases below 1 per cent. 

    ‘Funnily enough there seems to be more movement on lenders offering ‘green mortgages’ with better rates for energy efficient homes that are actually likely to save some consumers money.’

    It comes after the Government’s financial watchdog yesterday warned a ‘wage spiral’ or energy shock could drive inflation to a three-decade high of 5.4 per cent next year and force the Bank of England to take drastic action on interest rates in a move which would have major repercussions for mortgage holders. 

    In a stark assessment alongside the Budget, the OBR said its central forecast is for headline CPI to peak at 4.4 per cent in the second quarter of the year, far above the current 3.1 per cent, and more than double the Bank’s 2 per cent target.

    But it warned that data since the document was prepared suggests that a figure of 5 per cent could be more realistic.

    Such a high level of inflation would likely trigger the Bank to hike interest rates in a move which could see monthly mortgage payments increase by as much as a third. 

    Government spending is going to continue higher than it was before the pandemic as a proportion of GDP

    Government spending is going to continue higher than it was before the pandemic as a proportion of GDP

    The scenarios with a huge spike in inflation would have knock-on effects for the wider economy, the OBR said

    The scenarios with a huge spike in inflation would have knock-on effects for the wider economy, the OBR said 

    The OBR put forward two scenarios where the situation could get dramatically worse – with either a ‘mild wage spiral’ developing or continuing pressure on energy and product prices.

    £187bn China loans threat to British banks 

    British banks could be the most vulnerable to an economic meltdown in China, according to Bank for International Settlements data.

    UK lenders are the largest creditors to China, the Basle-based group found, with around £187bn of loans tied up in the country at the end of June – up by more than 20pc since the end of 2019.

    The numbers are likely to worry analysts and the Bank of England amid fears of a debt crisis in China. Concerns about the financial strength of property giant Evergrande, which is struggling under crippling debts of £220bn, have sent shockwaves through China’s property sector.

    Two of the biggest international banks in China, HSBC and Standard Chartered, are British and listed in London.

    The global financial system has become increasingly exposed to Beijing as its growth has exploded.

    China’s rebound from the pandemic was swifter than in the West. Covid first emerged in the city of Wuhan, which went into lockdown in January 2020. But China’s recovery has stuttered recently, with weaker GDP growth and faster inflation than many expected.

    The spotlight has been on the country’s embattled property developers for several weeks after debt-stricken Evergrande Real Estate began teetering on the brink of collapse. Concerns have been mounting that if Evergrande, which owns properties in 280 cities, fails it could drag the property market with it.

    By mid-2021, international banks had around £705bn in exposure to China, the Bank for International Settlements said. The UK could have an additional £29bn tied up in China, mostly through other debt deals.

    The US had around £101bn by the end of June, while Japan had £72bn.

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    In both, CPI inflation could go up to 5.4 per cent, with the OBR saying that the Bank of England base rate would need to soar to 3.5 per cent from the low of 0.1 per cent now.

    Such a shift would cause huge pain for homeowners who would face surging mortgage costs.

    A family with a £150,000 25-year mortgage could see monthly repayments increase from £759 to £1,060 – if the current gap between the Standard Variable Rate and the Bank’s interest rate was maintained.

    Rising interest rates would also result in ‘fiscal consequences’ for the Government because the cost of servicing the £2.2trillion public debt mountain would rise. 

    Unveiling his Budget yesterday, Rishi Sunak said he was renewing the Bank of England’s core duty to keep inflation under control.

    ‘I have written to the Governor of the Bank of England today to reaffirm their remit to achieve low and stable inflation,’ he said.

    The OBR said: ‘In both scenarios, a further sharp and persistent increase in costs means inflation peaks at 5.4 per cent (1 percentage point above our central forecast and the highest rate in three decades) and then falls back more slowly than in our central forecast.

    ‘Based on a simple monetary policy rule, Bank Rate in our scenario reaches 3.5 per cent (its highest since November 2008), thereby suppressing demand and moderating inflationary pressures, but even so it still takes a year longer for inflation to return to the target than in our central forecast.

    ‘At its peak, the impact of this vigorous monetary tightening prevents a further 2 to 3 percentage point rise in inflation, and without it the price level would be some 6 to 8 per cent higher at the scenario horizon.’

    The OBR’s central forecast upgraded growth for this year from the 4 per cent it suggested in March to 6.5 per cent – less than some had hoped but still enough to return to pre-Covid levels of activity. 

    Next year GDP is expected to be 6 per cent, lower than the 7.3 per cent at the last set of figures.

    Critically the ‘scarring’ – long-term damage to the economy – is now only thought to be 2 per cent rather than 3 per cent.

    The watchdog also now forecasts that unemployment will peak at 5.2 per cent, a fraction of what had been anticipated at the height of the crisis.

    ‘Today’s Budget does not draw a line under Covid. We have challenging months ahead,’ Mr Sunak said. ‘But today’s Budget does begin the work of preparing a new economy post-Covid.’

    Jonathan Gillham, chief economist at PwC, said: ‘This rapid recovery must be viewed through the lens of inflation which is largely being ‘imported’ from overseas.

    ‘This is because some countries have not opened up as rapidly as the UK, are still in lockdowns and have less access to vaccines, so there are supply chain shortages.

    ‘Also, energy prices have risen sharply, again, as key production and extraction facilities are not at full capacity.

    ‘There is increased competition for scarce resources. Inflation forecasts for 2022 have more than doubled since the last forecast peaking at 4.4 per cent in the second quarter of 2022.’

    The bounceback and enormous furlough support is also helping the UK jobs market weather the pandemic, with the OBR now expecting the unemployment rate to peak at 5.2 per cent, down from 5.6 per cent previously and the 12 per cent initially feared.

    Mr Sunak outlined a raft of new fiscal rules, called the Charter for Budget Responsibility, which will look to ensure day-to-day spending is no longer funded via borrowing and for underlying debt – currently around 100 per cent of GDP – to fall.

    The OBR said the improved fiscal outlook means the Chancellor is on track to meet his new goal for underlying debt to fall by 2024-25.

    This is thanks to sharply lower borrowing expected in each year under the forecasts, with the OBR now saying it believes borrowing will drop to £183 billion or 7.9 per cent of GDP in 2021-22, down from the 10.3 per cent or £234 billion previously predicted and almost half the record £320 billion amassed in 2020-21 after a mammoth £315 billion of emergency pandemic support.

    Borrowing will then drop to £83 billion or 3.3 per cent of GDP next year, then decline gradually to 2.4 per cent, 1.7 per cent and 1.7 per cent in the following years before reaching £44 billion or 1.5 per cent in 2026-27.

    This would leave borrowing at the forecast horizon 1 per cent of GDP lower than it was before the pandemic struck, and the lowest level for 25 years, according to the OBR.

    A Barclays spokesman said today: ‘We regularly review our product offering and make changes – where necessary – to ensure we continue to deliver a high level of service to the mortgage broker community and their clients. 

    ‘As a result of a recent review, some products across our Residential and Buy to Let ranges have seen price changes. These changes will come into effect from Friday, October 29.’

    The change in rates from TSB is understood to have been agreed and approved last week, and therefore came before yesterday’s Budget announcements.

    ** Are you trying to get a mortgage but concerned about rising rates? Please email: tips@dailymail.com ** 

    Rishi squeezes the middle earners: Experts say families earning around £30,000 will bear the brunt of tax rises in Sunak’s ‘Boris Budget’ that leave MILLIONS worse off as tax burden hits highest level for SEVENTY YEARS and public spending for FORTY

    • Rishi Sunak was pictured surrounded by crowds of drinkers outside the Two Chairmen in Westminster 
    • Used Budget to set out new Draught Relief policy which will see beer and cider duty reduced by five per cent
    • He added that overhaul to duty would deliver ‘most radical simplification of alcohol duties for over 140 years’
    • Elsewhere, the Chancellor poured cash into schools, hospitals and Boris Johnson’s ‘levelling up’ agenda 

    By David Wilcock, Whitehall Correspondent and Harry Howard For Mailonline and Jason Groves, Political Editor For The Daily Mail 

    How will middle-income families be affected by Rishi’s spending?

    The Resolution Foundation painted a bleak picture of the impact of the Budget on middle earners.

    According to the Office for National Statistics the median household income was £29,900 in the financial year before the pandemic hit.

    The Resolution Foundation of the Budget said that the Chancellor’s spending would benefit the poorest fifth of households by 2.9 per cent next April, but a 0.4 per cent income loss to middle earners and a 1.5 per cent loss to the richest fifth of households.

    In the longer term, by the middle of the decade middle earners will be taking a two per cent hit and high earners a 3.1 per cent hit. 

    While there were some measures like the fuel duty freeze and reform of alcohol taxes that will help with household bills, they are more than offset by previously announced plans to increase National Insurance to pay for social care, the RF found.

    Meanwhile the Institute for Fiscal Studies said middle-earners would lose an average of £180 per year.

    In a stark indication of the economic issues that have blighted the past decade it noted: ‘A middle earner is likely to be worse off next year than this as high rates of inflation and tax rises more than negate small average wage increases. 

    ‘This of course comes on top of a decade of historically feeble increases in real incomes. The gap between what we might have expected on the basis of pre financial crisis trends and what is actually happening is staggering. 

    ‘Average gross earnings could have been some 40 per cent higher had pre crisis trends continued.’

     

     

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    Rishi Sunak tightened his grip on Britain’s squeezed middle with a Budget that will see it bear the brunt of tax rises for a splurge of public spending, experts said today.

    They warned millions of people will be left worse off under plans unveiled by the Chancellor yesterday, with no realistic prospect of taxes falling in future, experts warned today.

    The Chancellor faced a backlash over his big-spending economic plan as it was revealed all strata of society will end up paying more in the middle of a cost of living crisis.

    Experts said the scale of the spending he announced yesterday would see the state expand to its biggest size since the late 1970s, before Margaret Thatcher conducted a decade of reform to bring it under control.  

    The Institute for Fiscal Studies said middle-earners would lose an average of £180 per year, while inflation and a freeze in personal tax allowances meant that one in nine workers was now a higher-rate taxpayer. The rate was one in 30 in 1991.

    And the Resolution Foundation warned that middle-income households – usually defined as those earning around £30,000 a year – would take a large hit to pay for a strong of investment decisions in the wake of the Covid pandemic. 

    It revealed families will pay an extra £3,000 in taxes during the course of Boris Johnson’s premiership at a time of low growth and stagnating wage growth – a figure disputed by Downing Street today.

    ‘The Government is squaring the circle of a smaller economy post-pandemic but also planning to spend slightly more with big tax rises’, the Foundation said.

    ‘Small tax cuts were announced including business rate discounts, a lower ”bank surcharge”, reduced alcohol duty and (yet another) fuel duty freeze, but the big picture is of fast-rising receipts. 

    ‘National insurance and Income Tax rises kick in next April, while Corporation Tax will rise from 19 per cent to 25 per cent the following year. 

    By 2026-27, tax as a share of the economy will be at its highest level since 1950 (36.2 per cent), amounting to an increase per household since Boris Johnson became Prime Minister of around £3,000. 

    ‘Higher taxes will largely fall on middle- and higher-income households. ‘ 

    Meanwhile the Institute for Fiscal Studies said that surging inflation could wipe out any increases in benefits for the worst off  unveiled yesterday.

    Mr Sunak sought to reassure Tory MPs last that he aims to cut taxes before the next election after unveiling his Budget. In a meeting of the 1922 Committee of Tory backbenchers he said he wanted to use ‘every marginal pound’ in the future to lower taxes rather than increase spending.

    But the IFS’s Paul Johnson today painted a bleak picture, saying: ‘A ”Boris Budget” means more tax and spend.   

    This may sit oddly with a Chancellor who said in his Budget speech that his ”goal is to reduce taxes”. 

    ‘But it should not be a surprise given that he is trying to combine fiscal conservatism with an ageing society and stubbornly slow-growing economy. Low tax conservatism is not what the Government has in store for post-pandemic Britain.’

    He added: ‘With, in the words of the OBR inflation quite possibly hitting its ”highest rate in the UK for three decades” millions will be worse off in the short term.

    ‘Next April benefits will rise by just over 3 per cent, but inflation could easily be at 5 per cent. That will be a real, if temporary, hit of hundreds of pounds a year for many benefit recipients….

    ‘We are not at 1970s levels of inflation, but we are now experiencing enough inflation that real pain will be felt as low income households – most of whom have next to nothing in the way of financial assets – wait more than a year for their incomes to catch up. For some in work that may never happen.’ 

    The IFS said in its comprehensive Budget analysis on Thursday that Mr Sunak has taken the state to the levels ‘not seen in normal times since the days of Geoffrey Howe’, Margaret Thatcher’s first chancellor.

    Mr Johnson stressed that Mr Sunak was doing this with ‘almost entirely a set of policy choices unrelated to the pandemic’ by responding to Government departments having been ‘starved of funding for a decade’ under austerity.

    The Institute for Fiscal Studies said middle-earners would lose an average of £180 per year.

    The Institute for Fiscal Studies said middle-earners would lose an average of £180 per year.

    Resolution Foundation graphic showing how Budget changes announced by the Chancellor will affect household income in the coming financial year, from the lowest on the left to the richest on the right

    Resolution Foundation graphic showing how Budget changes announced by the Chancellor will affect household income in the coming financial year, from the lowest on the left to the richest on the right 

    Resolution Foundation graphic showing how Budget changes announced by the Chancellor will affect household income, from the lowest on the left to the richest on the right, by the middle of the decade

    Resolution Foundation graphic showing how Budget changes announced by the Chancellor will affect household income, from the lowest on the left to the richest on the right, by the middle of the decade

    The Chancellor signalled to Tory backbenchers that tax cuts would come before the next election after he made changes that will increase the burden on everyday Britons to to its highest level in 70 years.

    The Chancellor signalled to Tory backbenchers that tax cuts would come before the next election after he made changes that will increase the burden on everyday Britons to to its highest level in 70 years.

    The IFS's Paul Johnson today painted a bleak picture, saying: 'A ''Boris Budget'' means more tax and spend... low tax conservatism it is not what the Government has in store for post-pandemic Britain'

    The IFS’s Paul Johnson today painted a bleak picture, saying: ‘A ”Boris Budget” means more tax and spend… low tax conservatism it is not what the Government has in store for post-pandemic Britain’

    The IFS showed how public spending has grown since Boris Johnson became prime minister in 2019

    The IFS showed how public spending has grown since Boris Johnson became prime minister in 2019

    The IFS said in its comprehensive Budget analysis on Thursday that Mr Sunak has taken the state to the levels 'not seen in normal times since the days of Geoffrey Howe', Margaret Thatcher's first chancellor.

    The IFS said in its comprehensive Budget analysis on Thursday that Mr Sunak has taken the state to the levels ‘not seen in normal times since the days of Geoffrey Howe’, Margaret Thatcher’s first chancellor.

    How the tax rises announced in the budget break  down

    How the tax rises announced in the budget break  down

    In a stark assessment alongside the Budget, the Office for Budget Responsibility (OBR) said its central forecast is for headline CPI to peak at 4.4 per cent in the second quarter of year

    In a stark assessment alongside the Budget, the Office for Budget Responsibility (OBR) said its central forecast is for headline CPI to peak at 4.4 per cent in the second quarter of year

    Elsewhere in his keynote speech, the Chancellor poured cash into schools, hospitals and Boris Johnson's 'levelling up' agenda – declaring the Tories were now 'the real party of public services'

    Elsewhere in his keynote speech, the Chancellor poured cash into schools, hospitals and Boris Johnson’s ‘levelling up’ agenda – declaring the Tories were now ‘the real party of public services’

    Downing Street said the analysis by the Resolution Foundation was ‘not a fair reflection’ of the fiscal situation ‘because it appears to include business and employer taxes and those aren’t directly applicable to households’.

    ‘The same report also shows that Government policies are set to boost incomes for those at the bottom of the distribution, that higher taxes will mostly impact the middle to higher income households,’ the PM’s spokesman told reporters.

    ‘The decisions made by this Government will give households nearly £500 per year extra on average, with the poorest receiving more than £1,000, and that’s before we factor in things like wage growth.’

    The Chancellor poured cash into hospitals and Boris Johnson’s ‘levelling up’ agenda – declaring the Tories were now ‘the real party of public services’.

    There was also more money for an increase in the minimum wage to £9.50-per-hour, and he eased a cut to Universal Credit by tweaking the taper rate to lessen the impact on the working poor. 

    But the Resolution Foundation (RF) also said the poorest fifth in the country will be around £280 a year worse off as a result of the £20 cut to Universal Credit.

    Researchers said three-quarters of households on UC will be worse off as a result of the changes, even with new tapering rules and a rise announced by Chancellor Rishi Sunak.

    Shadow chancellor Rachel Reeves said: ‘The Tories have no plan to tackle the cost of living crisis, no plan to shift the unfair taxes they’ve hit working people with and no plan for growth.

    ‘This was an out of touch, high tax, low growth Budget from a Conservative government that would rather waste billions of pounds of taxpayer cash than give households a VAT cut on their heating bills heading into winter.’

    Mr Sunak was coy on television today, telling Sky News it was his ‘ambition is to lower taxes for people’ and refusing to confirm he would cut income tax. He later told the BBC ‘in general you do have to pay for the things you do’.

    But he went on to Tell LBC: ‘Taxes are higher as a result of what’s happened over the last 12 months – I’m not happy. I want to reduce taxes on people.’ 

    The Office for Budget Responsibility (OBR) said the Budget would leave the overall tax burden at its highest since the final period of Clement Attlee’s post-war Labour administration 70 years ago. 

    Paul Johnson, a respected economist at the Institute for Fiscal Studies, told the BBC today that large tax rises were coming, adding: ‘I think the worry for the Chancellor is that he was very upbeat, he talked about a new age of optimism. But the high levels of inflation going forward, the fact there are very big tax rises coming and the growth is still pretty poor means we are not going to feel it.

    ‘The average incomes are barely going to rise over the next years and indeed on the forecast yesterday, average earners will be worse off next year than they are this year, so this is not going to feel great.’ 

    He added: ‘I would be very surprised if the tax burden in a decade’s time is less than it is now, indeed I wouldn’t be at all surprised if it is more.’

    Mr Sunak has sought to reassure Tory MPs that he aims to cut taxes before the next election after unveiling his Budget.

    He told ITV’s Peston programme that he and the PM had a shared commitment to tax cuts.

    ‘We’re both committed to it, the Prime Minister and I want to do it for people, and that’s why we did it today, we cut taxes for those in the lowest pay, to help them right now and we want to lower the burden of taxation, as I said in my speech I want to see taxes going down by the end of Parliament,’ Mr Sunak said.

    In an attempt to reassure nervous Conservatives, Mr Sunak earlier told the Commons: ‘By the end of this Parliament, I want taxes to be going down not up.’ 

    The Chancellor used an improved economic outlook to set out £150 billion of departmental spending as well as help for people on low incomes to tackle the rising cost of living.

    The Chancellor was mobbed last night as he headed to the pub hours after giving booze duty the biggest shake-up in 140 years by cutting the price of ale and prosecco in a £150billion Budget spending spree. Rishi Sunak was pictured surrounded by crowds of drinkers outside the Two Chairmen in Westminster late on Wednesday evening after delivering his speech in the House of Commons in the afternoon

    The Chancellor was mobbed last night as he headed to the pub hours after giving booze duty the biggest shake-up in 140 years by cutting the price of ale and prosecco in a £150billion Budget spending spree. Rishi Sunak was pictured surrounded by crowds of drinkers outside the Two Chairmen in Westminster late on Wednesday evening after delivering his speech in the House of Commons in the afternoon

    Rishi’s punt on pubs 

    The Chancellor was mobbed last night as he headed to the pub hours after giving booze duty the biggest shake-up in 140 years by cutting the price of ale and prosecco in a £150billion Budget spending spree. 

    Rishi Sunak was pictured surrounded by crowds of drinkers outside the Two Chairmen in Westminster late on Wednesday evening after delivering his speech in the House of Commons in the afternoon.   

    The Chancellor used his Budget to set out a new Draught Relief policy which will see beer and cider duty reduced by five per cent. 

    He said that amounted to the biggest cut on the tax on beer in 50 years and the ‘biggest cut to cider duty since 1923’. 

    The Chancellor added that his overhaul to duty would deliver the ‘most radical simplification of alcohol duties for over 140 years’, resulting in a ‘simpler, fairer and healthier’ system. 

    In a separate announcement, the Chancellor also announced that a planned increase in duty on spirits, wine, cider and beer due to take effect from midnight last night had been cancelled.

    Describing pubs as ‘the home of British community life for centuries’, he offered them help to ‘bounce back’ after the pandemic.

    He said he was taking advantage of Brexit to deliver the £3billion tax cut to ease the cost of living.

    National debt heads towards £2.5trillion 

    Some Tory grandees last night questioned the decision to embark on even higher spending at a time when the national debt is already heading towards £2.5trillion.

    But Mr Sunak said investing in a more innovative, high-skilled economy is ‘the only sustainable path to individual prosperity’. 

    And he vowed to start bringing taxes down by the end of this Parliament, saying it was time for the Tories to start making the ‘moral’ case for a smaller state.

    Late last night, he went further in an address to Tory MPs – promising that every spare pound would now be diverted to a war chest designed to deliver tax cuts before the election. 

    The Chancellor was boosted yesterday as the Office for Budget Responsibility (OBR) forecast that UK growth will now be 6.5 per cent this year – much higher than its previous forecast. 

    It means the economy is now expected to recover to pre-pandemic levels by the end of this year – six months faster than expected. 

    The Chancellor said Britain still faced ‘challenging months ahead’ – with inflation a looming threat.

    But he said it was now time to start ‘preparing for a new economy post-Covid… an economy of higher wages, higher skills and rising productivity. 

    ‘Of strong public services, vibrant communities and safer streets. An economy fit for a new age of optimism.’

    His consumer-friendly package of giveaways included a fuel duty freeze, a reform of alcohol taxes that will cut the price of many popular drinks, a major business rates cut for shops and pubs and reform of Universal Credit to help the lowest paid.

    However, yesterday’s official forecasts also warned that inflation could soar past 5 per cent next year, the highest in three decades. 

    And the OBR modelled an increase in interest rates from 0.1 per cent to 3.5 per cent by 2023 – a move that would add hundreds of pounds a month to a typical mortgage.

    Yesterday’s Budget and Spending Review represented an uneasy compromise between the Chancellor and Prime Minister. Improved economic forecasts left the Chancellor with an extra £50billion a year to spend. 

    But Mr Johnson insisted the bulk of the windfall should be spent on shoring up public services after the pandemic and delivering his levelling up agenda. 

    Other measures which will please voters include the helping of the high street on business rates and the giving of support to 2million of the lowest paid

    Other measures which will please voters include the helping of the high street on business rates and the giving of support to 2million of the lowest paid

    One ally of Mr Sunak said: ‘It was the Chancellor’s Budget, but it was the Prime Minister’s spending review.’ 

    However, in a highly personal section of his speech yesterday, the Chancellor said it was time for the Tories to start making the ‘moral’ case for lower taxes and a smaller state.

    Hinting at rumoured tensions with the PM, he said: ‘By the end of this Parliament, I want taxes to be going down, not up.’ 

    The OBR said Mr Sunak had now presided over the biggest increase in taxes since the Black Wednesday debacle three decades ago.

    The Chancellor said he disliked the tax hikes but had no choice in the wake of the pandemic. Last night he told Tory MPs he had ‘set a clear and unambiguous intent to begin the process of reducing taxes’.

    But some party grandees said cuts should have started immediately. Ex-Cabinet minister David Davis said higher taxes would ‘undoubtedly’ depress growth and employment. 

    The Institute for Fiscal Studies said plans that focused on public services, benefits and wages meant the Chancellor’s plans were ‘more similar to Gordon Brown’s than to George Osborne’s’.

    Shadow Chancellor Rachel Reeves said the Budget measures were ‘not enough’ to help families facing a cost-of-living crisis and told Mr Sunak: ‘The Conservatives are now the party of high taxation.’ 

    Announcing the booze duty cut, The Chancellor said drinkers would save 3p per pint – the biggest tax cut to beer in 50 years.

    The cost of English sparkling wine, prosecco and champagne will also fall, potentially cutting the cost by 53p a bottle.

    However, the cuts will not take effect until February 2023.

     

    In both scenarios, CPI inflation could go up to 5.4 per cent, with the OBR saying that the Bank of England base rate would need to soar to 3.5 per cent from the low of 0.1 per cent now

    In both scenarios, CPI inflation could go up to 5.4 per cent, with the OBR saying that the Bank of England base rate would need to soar to 3.5 per cent from the low of 0.1 per cent now

    The headline CPI rate of inflation was 3.1 per cent in September, down slightly from the 3.2 per cent recorded in August. However, the Bank of England expects it to top 4 per cent in the coming months

    The headline CPI rate of inflation was 3.1 per cent in September, down slightly from the 3.2 per cent recorded in August. However, the Bank of England expects it to top 4 per cent in the coming months 

    Public sector net borrowing will be lower than had been expected in March, thanks to the improved overall economic picture

    Public sector net borrowing will be lower than had been expected in March, thanks to the improved overall economic picture

    The tax burden is going to its highest level since the Second World War, despite Rishi Sunak's promise that he wants to cut it

    The tax burden is going to its highest level since the Second World War, despite Rishi Sunak’s promise that he wants to cut it 

    VICTORIA BISCHOFF: This was the budget that literally leaves pensioners out in the cold… and young families will feel the pinch, too

    Family finances are being pushed to breaking point. A perfect storm of relentless bill and price hikes, along with looming tax rises, means households are on the cusp of the biggest spending squeeze in a decade.

    Inflation is now predicted to soar to as high as 5 per cent next year. Yet few workers will receive big enough pay rises to counter this.

    And this means the pound in their pocket will simply not stretch as far.

    Energy bills could soon rocket by an eye-watering £400 for the average household, after gas prices went through the roof. 

    Petrol prices are at a record-high, despite a 12-year freeze on fuel duty.

    Food prices are spiralling ahead of Christmas. 

    And if interest rates rise as expected, it could also push up mortgage costs for homeowners who are not on fixed deals.

    A National Insurance hike for workers next April, together with the freezing of income tax bands, will then pile yet more pressure on to overburdened budgets.

    Rishi Sunak (pictured) failed to mention the word 'pensioner' once in his hour-long Budget speech yesterday

    Rishi Sunak (pictured) failed to mention the word ‘pensioner’ once in his hour-long Budget speech yesterday

    But of all households, few are facing a tougher time than the millions of pensioners on fixed incomes.

    Yet Rishi Sunak failed to mention the word ‘pensioner’ once in his hour-long Budget speech yesterday. 

    In fact, it’s fair to say retirees are likely to wake up this morning feeling utterly abandoned.

    There was just nothing in the Budget for them. Reforms to Universal Credit won’t help them, and neither will the increase in the living wage. 

    Yet it is widely recognised that pensioners are almost always hit hardest by rising prices.

    How your household will be affected by the Budget depending on your total income (listed top, horizontally) and family arrangement (listed left, vertically)

    How your household will be affected by the Budget depending on your total income (listed top, horizontally) and family arrangement (listed left, vertically) 

    This is because for those aged 65 and above, food and energy costs represent a far bigger proportion of their typical household spending – largely because they spend more time at home and so need the heating on more.

    These bills account for around 18 per cent of their typical monthly budget compared to 11 per cent for those under 30, according insurer Aviva.

    So it is a particularly scary time for the millions of people who rely on the state pension to make ends meet – especially the poorest who have no other income.

    But after the triple-lock promise was axed, the state pension is now expected to increase by only 3.1 per cent in April. 

    This might sound generous on the surface, but it works out at just a meagre £5.55 a week rise in the full new state pension to £185.15.

    And it will not come close to matching rising inflation. 

    The state pension is one of the worst in the developed world, as a percentage of a person’s pre-retirement take-home pay.

    Had it risen in line with earnings, it would have increased by 8 per cent. 

    This was a missed opportunity to give pensioners a real boost and help keep it in line with the soaring in the cost of living.

    All but the poorest have already lost their free TV licence.

    Yet the Chancellor couldn’t even find it within himself to increase any of the vital benefits that help the most vulnerable pensioners with energy bills, such as the winter fuel payment, cold weather payment or warm homes discount.

    On top of this, rising prices mean private pension pots are at risk of running out faster.

    Savers have already suffered more than a decade of rock-bottom rates and there is now not a single account that can match let alone beat inflation. 

    Even Rishi’s long-awaited ‘world first’ green bond turned out to be a damp squib, offering just 0.65 per cent interest to savers who tie up their cash for three years. 

    Investing is now the only way to prevent savings from being eroded by inflation – but this may involve taking greater risks than many feel comfortable with.

    Of course, the Chancellor cannot help everyone. And the Government is under pressure to tighten its belt.

    But for the millions of pensioners desperate for some reassurance they have not been forgotten, this Budget only delivered bitter disappointment. 

    They have been left out in the cold – quite literally.

    STEPHEN GLOVER: This was a Boris Johnson’s Budget splurge… but Rishi Sunak’s Tory instincts mean there’s a big fight ahead

    There were two voices present in yesterday’s Budget statement, two political figures locked in an occasionally uncomfortable embrace.

    One of them was the man who delivered the speech, Rishi Sunak. He did so with aplomb and elegance, and a mastery of detail. It is he who has burnt the midnight oil, and made the sums add up.

    But this wasn’t the address he would have made if left to his own devices. The impulse behind this high-spending Budget came from our boosterish Prime Minister, who has an inclination to splash the cash — and a political interest in doing so.

    For the time being, Boris Johnson has bent Mr Sunak to his will. This was a Budget that the world would have accepted without surprise if it had been unveiled by a Labour Chancellor. 

    And for the most part — until the very end, when he seemed to disown much of what he had previously said — Mr Sunak announced countless spending increases with apparent conviction, even gusto.

    Prime Minister Boris Johnson (right) with Chancellor of the Exchequer Rishi Sunak during a visit to Fourpure Brewery in Bermondsey, London, after Sunak delivered his Budget to the House of Commons

    Prime Minister Boris Johnson (right) with Chancellor of the Exchequer Rishi Sunak during a visit to Fourpure Brewery in Bermondsey, London, after Sunak delivered his Budget to the House of Commons 

    The Chancellor (Pictured) has reduced what he called the ‘tax on work’, whereby working people on Universal Credit pay 63p on every extra pound they earn. This will be reduced to 55p, and nearly two million families will keep, on average, an extra £1,000 a year

    The Chancellor (Pictured) has reduced what he called the ‘tax on work’, whereby working people on Universal Credit pay 63p on every extra pound they earn. This will be reduced to 55p, and nearly two million families will keep, on average, an extra £1,000 a year

    Many of the Thatcherite economic orthodoxies that have dominated the Tory Party for the past 40 years have been jettisoned. Under Boris Johnson, the Conservatives are becoming a high-spending, high-tax party.

    Consider Mr Sunak’s boast that the Budget’s total departmental spending will go up over this Parliament by an enormous £150 billion. He informed MPs that this was the largest increase this century, amounting to 3.8 per cent a year in real terms.

    I can think of few, if any, recent Tory chancellors who would have crowed about raising public expenditure so rapidly. The Labour benches were often stunned into silence. They might have been listening to one of their own.

    Huge sums of money are, no doubt rightly in many cases, being thrown at the NHS, new roads, railways, housing, cladding, the courts, schools, museums and galleries in a comprehensive repudiation of the austerity promoted by David Cameron and George Osborne.

    Even foreign aid will revert to 0.7 per cent of GDP by the end of this Parliament — diverting several billion pounds of taxpayers’ money overseas which might have been spent, or saved, at home.

    At the same time, although there were welcome concessions for drivers and drinkers, as well as short-term help over business rates, there was nothing in the way of significant tax reductions for ordinary people.

    Hardly surprising, given that the Chancellor had already announced sharp increases in National Insurance, which will take effect next April. Companies will have to face their own share of the pain when Corporation Tax rates soar in 2023.

    The upshot, as the Chancellor wryly noted, is that ‘taxes are rising to their highest level as a percentage of GDP since the 1950s’. Actually, most economists reckon that we have not been so squeezed for taxation since 1948, when Labour was in power.

    Admittedly, the enormous expenditure resulting from the pandemic has put the Government in an economically parlous position. It is choosing to get out of it by boosting public spending — and raising taxes.

    This is a new kind of Tory government such as we haven’t seen for nearly half a century. Boris Johnson’s determination to ‘level up’ necessitates higher spending on infrastructure, as well as offering a helping hand to the lower paid.

    Mr Sunak’s (Pictured) boast that the Budget’s total departmental spending will go up over this Parliament by an enormous £150 billion. He informed MPs that this was the largest increase this century, amounting to 3.8 per cent a year in real terms

    Mr Sunak’s (Pictured) boast that the Budget’s total departmental spending will go up over this Parliament by an enormous £150 billion. He informed MPs that this was the largest increase this century, amounting to 3.8 per cent a year in real terms

    So the Chancellor has reduced what he called the ‘tax on work’, whereby working people on Universal Credit pay 63p on every extra pound they earn. This will be reduced to 55p, and nearly two million families will keep, on average, an extra £1,000 a year. This is obviously a thoroughly good thing.

    But whether Boris Johnson’s high-spend, high-tax recipe will be as beneficial to the country in the longer term is quite another matter. He hopes it will placate his ‘Red Wall’ former Labour voters, and give the Tories another handsome majority at the next election.

    It may well do so. This was a Budget with a clever eye on an election in a couple of years. The increase in the national living wage to £9.50 an hour, and the ending of the public sector pay freeze, were other measures partly calculated to please ‘Red Wall’ voters.

    But what happens after the election? Much as I may want the Tories to win it, I don’t want every policy to be subordinated to that overriding aim. One depressing aspect of the Budget was the very modest growth forecasts produced by the independent Office for Budget Responsibility (OBR).

    Following a post-pandemic rebound this year and next, the OBR foresees much slower growth of only 1.3 per cent in 2024 and 1.6 per cent in 2025, which are low by almost any historical yardstick. 

    Granted, all such forecasts, whether by the OBR or anyone else, invariably turn out to be wide of the mark. Nonetheless, it is striking that the OBR should think our prospects for growth in the medium term are so abysmal.

    My explanation is that a lower-tax economy — in which taxpayers and companies are allowed to keep more of their money — is much more likely to produce sustained economic growth. That is the lesson of Britain in the 1980s, and of countless other countries since then.

    And yet this is the path on which Mr Johnson has defiantly turned his back. For the time being Mr Sunak feels compelled to go along with his master. But there were hints in his statement that he is far from being wholly happy.

    For one thing, he mentioned the Prime Minister six times in his speech, which is a very unusual thing to do in a Budget statement. I can’t recall any Chancellor doing so before.

    He cited ‘the Prime Minister’s economy of higher wages, higher skills, and rising productivity’, and he lauded Mr Johnson’s ‘historic reforms to social care’. 

    Following a post-pandemic rebound this year and next, the OBR foresees much slower growth of only 1.3 per cent in 2024 and 1.6 per cent in 2025, which are low by almost any historical yardstick

    Following a post-pandemic rebound this year and next, the OBR foresees much slower growth of only 1.3 per cent in 2024 and 1.6 per cent in 2025, which are low by almost any historical yardstick

    Sucking up? Perhaps. Establishing that he recognises who is ‘top dog’ for now? Probably. But I suspect that Mr Sunak was also granting Boris Johnson authorship of policies which he knows could ultimately disappoint — and from which he may one day distance himself.

    In the Chancellor’s peroration, he came close to disavowing Boris’s high-taxation, high-spending tendencies when he spoke of ‘a different kind of moral dimension to the economic challenge we face now’.

    He suggested the State had grown too big — having just announced several measures which made it bigger — and asked: ‘Do we want to live in a country where the response to every question is: ‘What is the Government going to do about it?’ ‘

    Or, he wondered, should we ‘choose to recognise that government has limits? That government should have limits?’ Then he added: ‘My goal is to reduce taxes. By the end of this Parliament, I want taxes to be going down, not up.’

    As, no doubt, does Mr Johnson, and every sensible Tory — if there is enough money left in the kitty, as some economists believe there will be. But the Chancellor wasn’t merely expressing an aspiration. He was stating a fundamental belief.

    For the time being, he appeared to be saying, it will be done Boris Johnson’s way, but one day it will be done my way. When Rishi Sunak is stronger and tougher, there is going to be a big fight ahead.

    Welcome to the Two Rishis: One threw around cash, the other was sober and responsible. But ex-Chancellor NORMAN LAMONT reveals the crucial detail that will decide his fate

    No chancellor can ever foresee what dramatic events he may have to face, and certainly Rishi Sunak has faced a very deep challenge indeed – first a global pandemic and then a recession.

    He has handled the situation with great skill. But yesterday, as he delivered his budget, it seemed to me that we were watching a very polished double act – ‘The Two Rishis Show’.

    There was the expansive Rishi, leading us into a Promised Land flowing with milk and honey, exhilarated by his own optimism and by the increases in public spending he announced.

    And then, popping out from behind him from time to time, there was the fiscally responsible Rishi, the man with a reputation for caution, who says he wants to take away the Prime Minister’s credit card.

    No chancellor can ever foresee what dramatic events he may have to face, and certainly Rishi Sunak (pictured yesterday) has faced a very deep challenge indeed – first a global pandemic and then a recession. He has handled the situation with great skill

    No chancellor can ever foresee what dramatic events he may have to face, and certainly Rishi Sunak (pictured yesterday) has faced a very deep challenge indeed – first a global pandemic and then a recession. He has handled the situation with great skill

    Parts of his speech belonged to an electioneering Budget. Impressive and highly detailed proposals followed each other in rapid succession.

    We heard lots of references to an ‘infrastructure revolution’ and of course the big headline – an increase in public spending of £150billion by the end of the parliament.

    And he was careful to outline several measures that are possible only because of the benefits conferred by Brexit. 

    These include the simplification of taxes on alcohol, which ought to prove both popular and efficient, as well as changes to taxes on shipping. Here, he was reaping the advantages of Brexit and was rightly determined to make sure his audience knew about it.

    But after highlighting the largesse on offer, the more conservative Rishi stepped forward – not to dampen the euphoria but to make it clear that he will ensure that we live within our means. He announced new fiscal rules, to bind the Government to sustainable levels of borrowing.

    But yesterday, as he delivered his budget, it seemed to me that we were watching a very polished double act – ‘The Two Rishis Show’. There was the expansive Rishi, leading us into a Promised Land flowing with milk and honey. And then, popping out from behind him from time to time, there was the fiscally responsible Rishi, the man with a reputation for caution

    But yesterday, as he delivered his budget, it seemed to me that we were watching a very polished double act – ‘The Two Rishis Show’. There was the expansive Rishi, leading us into a Promised Land flowing with milk and honey. And then, popping out from behind him from time to time, there was the fiscally responsible Rishi, the man with a reputation for caution

    The charter for these rules will be presented to the House for a full vote, which is probably a crafty way of trying to trap Labour into a guarantee of responsible behaviour.

    For many Conservative MPs, the most important part of the speech – what they were waiting for – came when the Chancellor declared he was not comfortable with keeping taxes at their highest level since the Attlee Labour government.

    Government spending now accounts for more than half the economy, he said. It’s plain that goes against all Conservative instincts. By the next election he wants to see tax falling. 

    The question one has to ask is whether this is consistent with the spending announcements. There’s one statistic above all that has to be considered. 

    Former Chancellor Norman Lamont (pictured) writes that a Chancellor can never ignore the relationship between national debt and national income

    Former Chancellor Norman Lamont (pictured) writes that a Chancellor can never ignore the relationship between national debt and national income

    A Chancellor can never ignore the relationship between national debt and national income – how much the country borrows each year, against its gross domestic product, or how much money it generates.

    At the moment, the stock of debt is forecast this year to be 85 per cent of GDP. Next year, it will be up, at 85.4 per cent… and up again, the following year, peaking at 85.7 per cent.

    In theory, if the Chancellor’s predictions are right, the national debt will start to stabilise and fall. For that to happen we must have a really substantial growth of our economy.

    But the Office for Budget Responsibility predicts that growth at the end of the survey period will be less than 2 per cent. 

    The Chancellor also warned us of rising inflation, which was 3.3 per cent in September and is forecast to average 4 per cent next year. 

    Inflation, as older readers will remember only too well, is profoundly unpopular. It can lead to the phenomenon of stagflation – slower growth plus inflation.

    The only real counter to inflation lies in the hands of the Governor of the Bank of England, Andrew Bailey. The Bank has the power to raise interest rates. But the Bank is independent of the Treasury – and Mr Bailey is not part of anybody’s double act.

    Interest rates are currently so low that the Bank may be reluctant to raise them much above 1 per cent – too little to make a dent in inflation of 4 per cent.

    The Bank suggests the spike in inflation will be ‘transitional’. But how long is ‘transitional’? If international oil prices rise from $84 today to $100 a barrel and disruption to global supply chains continues beyond 2022, then high inflation could be with us for much more than just a few months.

    We all want to believe in the new, post-Covid ‘age of optimism’. Let us hope that the forecasts are right and it is the conservative Rishi Sunak – rather than his free-spending alter ego – who prevails.

    HENRY DEEDES: The sort of hell-for-leather spree a footballer’s wife might go on if her fella’s been caught in flagrante

    By Henry Deedes for the Daily Mail 

    As Rishi Sunak sat down to loud roars yesterday, row upon row of giddy eyeballs behind him began to bobble about in their sockets. Tory MPs were excited. 

    They rubbed their hands, they licked their chapped lips with undisguised glee. ‘More!’ they unisoned. ‘Moooorrrre!’

    The Chancellor smiled bashfully and swatted away their adulation. It was as though some big cat dandy had just plonked himself down in a nightclub and announced the drinks were on him.

    Rishi’s Budget turned out to be another wallet-busting spendathon. The sort of hell-for-leather spree a footballer’s wife might go on after her fella’s been caught in flagrante with another popsy.

    More money for schools, more for transport, more for prisons… more, more, more! Heavens. So this is the sort of Big Spender Shirley Bassey warned us about.

    Splashing out: Rishi's Budget turned out to be another wallet-busting spendathon. The sort of hell-for-leather spree a footballer's wife might go on after her fella's been caught in flagrante. Pictured: Rishi Sunak in Parliament yesterday

    Splashing out: Rishi’s Budget turned out to be another wallet-busting spendathon. The sort of hell-for-leather spree a footballer’s wife might go on after her fella’s been caught in flagrante. Pictured: Rishi Sunak in Parliament yesterday

    Will such profligacy jolt our economy from its post-Covid snooze? Who knows. But one thing’s for sure, it sent the wind right up his opponents. Wily Rishi hadn’t just stolen their clothes, but ransacked the entire wardrobe and paraded them all down Whitehall.

    By the end, the opposition front bench simply sat in silence, arms folded. You could have been staring into a lifeless waiting room at a provincial train station.

    For years they’ve demanded a Treasury splurge. And here it was being delivered, not by some bearded, wonky-specced old Trot, but by an ex-Goldman Sachs millionaire who wears £90 flip-flops. It just ain’t fair!

    Mr Sunak spoke for just over 70 minutes. Originally we feared it would be far longer. He arrived carrying a speech as thick as a breeze block. Cue gasps of relief when we saw each page contained only about two dozen words. 

    Kick-off was delayed a few minutes while Deputy Speaker Dame Eleanor Laing issued the Government another rebuke over the amount of information leaked to the media. ‘Resign!’ yelled Labour MPs.

    Rishi shot Madam Deputy Speaker one of those choirboy looks intended to show it wouldn’t happen again.

    The Prime Minister wasn’t budging though. He shook his head and exhaled huffily in protest, a goofy mop of hair drooping over his face mask. ‘Ain’t done nuffink, yer honour.’

    Speaking of face coverings, the Conservative front bench was largely masked up again. Rishi wore a particularly sharp number. Sleek. Expensive-looking. Hermes probably. Only that icon of devil-may-care rebellion Jacob Rees-Mogg remained without.

    More money for schools, more for transport, more for prisons… more, more, more! Heavens. So this is the sort of Big Spender Shirley Bassey warned us about

    More money for schools, more for transport, more for prisons… more, more, more! Heavens. So this is the sort of Big Spender Shirley Bassey warned us about

    Sunak’s opening remarks were met with a barrage of away fan noise clearly designed to put him off his stride. Yet he powered on regardless. It’s notable how much more oomph he gives his words than at his admittedly impressive debut two years ago. Incidentally, he’s sprouted a few grey hairs since then. Hardly surprising.

    Soon he was into his groove and pinging off soundbites. He was building an economy ‘fit for a new age of optimism’, he said.

    He described the Conservatives as the ‘true party of public services’. Loyal cheers erupted from PPS Andrew Griffith (Arundel and South Downs), an ex-Sky boss who radiates ministerial ambitions.

    Not everything went down smoothly. A passage about green energy briefly sent us into a coma. Nor was an announcement that foreign aid would be restored met with much enthusiasm. 

    With Rishi now asserting himself over the chamber, Labour’s benches had quietly slipped into stasis. 

    The only sign of energy came from shadow energy minister Ed Miliband who kept busily trying to feed response lines to shadow chancellor Rachel Reeves, drafted in after Sir Keir Starmer had been forced to isolate.

    Loud cheers met changes on alcohol duty. Predictably not from the SNP. Och, they were moody.

    A curious note to finish. After the shamelessly boosterist statement, there came a slight row back.

    Rishi reminded everyone that it was not up to him to solve everyone’s problems. ‘Government has its limits,’ he said sombrely. He was committed to lower taxes. He wanted to reward work.

    Was he discreetly trying to let us know this was more the Prime Minister’s Budget than his? Certainly one for Westminster’s mischief makers to chew over.

    ‘Not enough’ was Reeves’s predictable response. Quelle surprise. You could suck the vaults dry and Labour will still demand more spending. 

    Still, she fared far better than her boss would have done. Even on one of his good days. Ms Reeves’ problem is her opponent never seems to have a bad one.

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    Published at Fri, 29 Oct 2021 01:23:08 +0000

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