UK

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailBritain will suffer the highest inflation of the G7 group of advanced economies this year and next, new forecasts show.The Organisation for Economic Co-operation and Development (OECD) lowered its predictions for headline UK inflation to an average of 2.8 per cent in 2024 and 2.4 per cent in 2025, from the 2.9 per cent and 2.5 per cent respectively forecast in November.But this would still see the UK suffer the highest level of inflation of all the G7 countries, which include Canada, Italy, Japan, Germany, France and the US, in both 2024 and 2025.The OECD also downgraded its forecasts for Britain’s economic growth, meaning the UK economy will be the third-worst performer this year. Just France and Germany are expected to grow less than Britain, while Britain’s economy will grow at the same rate as Italy. The latest figures are a fresh headache for Rishi Sunak as the general election, expected this autumn, approaches. It means the country will be going to the polls amid a period of sluggish economic performance and inflation still above the Bank of England’s 2 per cent target. Jeremy Hunt and Rishi Sunak will hope next month’s Budget can revive Britain’s sluggish economy Jeremy Hunt is expected to cut taxes in a bid to spur growth with next month’s Budget, but he has warned his scope for lowering the tax burden is limited.The Liberal Democrats said that “yet again the Conservative government is top of the table for price rises and near the bottom for economic growth”.Treasury spokesperson Sarah Olney said: “Conservative ministers trashed our economy and left families to clear up their mess. This verdict on their economic performance is yet more proof the prime minister and his chancellor aren’t fit to hold the key to the Treasury.”In 2024, The OECD is predicting that UK inflation to be above Canada at 2.6 per cent, France at 2.7 per cent, Germany at 2.6 per cent, Italy at 1.8 per cent, Japan at 2.6 per cent and the United States at 2.2 per cent.And while the OECD said inflation is projected to be back to target across most G20 countries by the end of next year, it warned over the risk to inflation globally from geopolitical tensions and the Red Sea shipping disruption.It also downgraded its UK growth forecast for 2023 to 0.3 per cent from 0.5 per cent previously predicted in November, but held firm on its forecasts for Britain’s gross domestic product (GDP) to expand by 0.7 per cent in 2024 and 1.2 per cent in 2025.The OECD said central banks could start to lower interest rates in 2024 and sooner than it had predicted in November, although it warned that monetary policy must be “prudent”.It added that it is “too soon to be sure that underlying price pressures are fully contained”.High geopolitical tensions are a significant near-term risk to activity and inflation, particularly if the conflict in the Middle East were to disrupt energy marketsOECD secretary-general Mathias Cormann said: “Monetary policy needs to remain prudent, though central banks could start to lower interest rates this year, provided that inflation continues to ease.”The organisation flagged concerns over the Israel-Gaza conflict and attacks on ships in the Red Sea by Houthi rebels, which has seen US and UK forces respond with strikes against the rebels.“High geopolitical tensions are a significant near-term risk to activity and inflation, particularly if the conflict in the Middle East were to disrupt energy markets,” it said.“A widening or escalation of the conflict could disrupt shipping more extensively than presently expected, intensify supply bottlenecks, and push up energy prices if traffic is interrupted in the key routes for the transport of oil and gas from the Middle East to Asia, Europe and the Americas,” it added.The Bank of England last week also flagged worries over the Red Sea attacks in affecting the outlook for inflation, though it said the impact to the UK has so far been small.The Bank signalled on Thursday as it kept interest rates at 5.25 per cent that it could start thinking about cutting borrowing costs this year, though it also stressed the job of reining in inflation is not done.In its latest report, the OECD said global central bank policies “should remain restrictive for some time to come”, suggesting that policymakers should not cut rates too quickly or too far.Its growth forecasts see the UK with the joint third weakest expansion of the G7 countries, falling far short of the 2.1 per cent pencilled in for the US.Germany is set for the weakest expansion in the G7 this year, at just 0.3 per cent, followed by France at 0.6 per cent and then both the UK and Italy at 0.7 per cent, according to the OECD. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailSome local authorities have yet to confirm funding for childcare providers to deliver on the government’s promised expansion, education secretary Gillian Keegan has said.Rishi Sunak previously admitted that his pledge to expand free childcare in England has hit trouble, as ministers scramble to get a grip on the roll-out ahead of an April deadline.As first revealed by The Independent in December, there are major problems with funding, staff shortages and nursery closures.Ms Keegan admitted she cannot guarantee the pledge to provide more free hours – but said she is leaning on councils in England “very hard” to publish funding rates ahead.“The vast majority of them have already – but there’s a small number that haven’t and this is causing a bit of friction in the system. I am leaning on them very, very hard,” she told LBC.Childcare providers have reported being unable to commit to offering places for parents of two-year-olds in April, as they remain in the dark about final funding rates.Education secretary Gillian Keegan When challenged on whether she can guarantee that parents will be able to access funding, Ms Keegan said: “I’m very confident in this programme.”She added: “I’m very confident that your 15 hours for two-year-olds will be available in April. The only reason I say I can’t guarantee is strictly it’s tens and tens of thousands of businesses all across the country who are actually delivering it.”The new policy enables eligible working parents of two-year-olds to claim 15 hours of free childcare for 38 weeks of the year from April.And from September 2025, working parents who have children under five will be able to claim 30 hours of free childcare for 38 weeks per year.Mr Sunak admitted last month that there were “practical issues”, after it emerged that IT flaws which have stopped some parents from accessing the necessary code to apply for state-funded hours. Eligible parents will be sent an automatic code.Meanwhile, Ms Keegan said her husband will give evidence at the public inquiry into the Post Office Horizon IT scandal if requested to do so.Michael Keegan was formerly UK chief executive of Fujitsu – the tech firm behind the faulty accounting software at the centre of the Post Office Horizon scandal.Grilled on whether her husband will be giving evidence, Ms Keegan said: “He has said he would give evidence,” before suggesting that he would not be called.She added: “Actually, the stage of the inquiry that they are at now, they’ve just published a list, I think, of 68 people who they think can answer the questions for the governance and everything that happened, and he’s actually not on that list. So they haven’t asked him. But he would [give evidence], absolutely.”Asked why her husband has given up his part-time role at the Cabinet Office, she said: “Well, he’s doing a PhD. That’s his main thing. He’s doing a PhD and he’s getting to the sort of final bit of it, and that’s what his passion is.”The education secretary did not give Rishi Sunak’s government the top rating when asked to rate its performance.Ms Keegan said she would rate the government as “good” using Ofsted’s four-point grading scale of Outstanding, Good, Requires Improvement, and Inadequate.When asked how she would grade the performance using the watchdog’s system, she said: “I would say, ‘good’. Often a lot of the things that we’ve delivered nobody ever talks about.” More

Sign up to our free Brexit and beyond email for the latest headlines on what Brexit is meaning for the UKSign up to our Brexit email for the latest insightRishi Sunak has told Sinn Fein to focus on the “day to day” concerns of people in Northern Ireland rather than a referendum on Irish reunification.The PM said “constitutional change” should not be a priority for the Irish nationalist party – after newly-appointed first minister Michelle O’Neill claimed a border poll could be held in the next 10 years.Mr Sunak met Stormont’s party leaders and Republic of Ireland’s premier Leo Varadkar on Monday after the Northern Ireland Executive re-formed on Saturday to end a two-year stalemate.Mr Sunak said the £3bn funding boost would deliver for Northern Ireland’s families and businesses. “That’s what everyone’s priority is now – it is not constitutional change, it is delivering on the day-to-day things that matter to people.”The devolved government – headed by Sinn Fein’s Ms O’Neill and the DUP’s Emma Little-Pengelly as deputy first minister – held its first meeting on Monday to start dealing with the province’s strained finances.The meetings came as Mr Sunak’s Northern Ireland secretary Chris Heaton-Harris told Ms O’Neill that she should focus on improving public services rather than the issue of Irish reunification.The Tory cabinet minister dismissed the prospect of a border poll, after Ms O’Neill claimed one could be held in the next 10 years. Mr Heaton-Harris said the conditions for a referendum were “definitely not met at this time”.NI secretary Chris Heaton-Harris, first minister Michelle O’Neill, deputy first minister Emma Little-Pengelly and Rishi Sunak at Stormont CastleHe told LBC that he would have to be “confident” that there was a potential majority of people in Northern Ireland “who would like to depart from their current constitutional status”.Mr Heaton-Harris added: “I would suggest that actually top of the in-tray for an incoming executive has to be things like public sector pay, the health service … funding on education and a whole host of other things that actually all people in Northern Ireland from both communities truly care about.”DUP leader Sir Jeffrey Donaldson criticised the new Sinn Fein first minister for focusing on the “divisive” issue of reunification.”“She says she wants to be a first minister for all, well that means the unionist community,” he told Sky News. “Let’s focus on the issues that really matter to people. They’re not interested in a divisive border poll.”On Sunday Ms O’Neill, the very first nationalist to assume the post of first minister at Stormont, said: “I believe we are in a decade of opportunity and there are so many things that are changing.“All the old norms, the nature of this estate, the fact that a nationalist-Republican was never supposed to be first minister. This all speaks to that change,” she said.Mr Sunak and Mr Heaton-Harris met leaders Ms O’Neill and Sinn Fein president Mary Lou McDonald at Stormont on Monday.It is understood the Sinn Fein leaders objected to elements of the recent UK deal with the DUP amid concerns it adopted a pro-Union approach to issues such as a border poll.They also are believed to have stressed the requirement for the UK government to remain impartial in relation to the calling of any future referendum on Northern Ireland’s constitutional future.The institutions were restored following a deal between Mr Sunak’s government and the DUP to allay unionist concerns over post-Brexit trading arrangements.Mr Heaton-Harris suggested post-Brexit problems related to Northern Ireland were not over when he was grilled BBC Breakfast if Brexit was “actually done” after “eight years of uncertainty”.The cabinet minister said: “This is a problem that will never be solved … This is a land border with the European single market that we have here in Northern Ireland.”Rishi Sunak, DUP MLA Edwin Poots and NI secretary Chris Heaton-Harris at StormontBut Mr Heaton-Harris insisted the updated deal with the DUP to ease checks was an “opportunity” that gives the province smooth access to both the UK and EU’s single market.The PM also met with Ms O’Neill and deputy Ms Little-Pengelly at Stormont Castle – telling the executive’s Sinn Fein and DUP leaders: “Today isn’t the end, it’s the beginning and the real work starts now.”Mr Sunak’s government has offered a £3.3bn package to stabilise finances in the region. However, the executive has pressed Mr Sunak for more funding.A letter from all Stormont ministers to No 10 states that the current financial package on offer “does not provide the basis for the executive to deliver sustainable public services and public finances”.The PM said the offer represents “a generous and fair settlement”. He added: “There has not been devolved government up and running here for far too long. But now we do have it and they can start focusing on delivering for everyone.”Mr Sunak also met Irish premier Leo Varadkar at Stormont, as both leaders visited Belfast to mark the restoration of devolved government. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailNigel Farage is planning to attend the launch of Liz Truss’s new “Popular Conservatism” project this week, as the former prime minister attempts to rally right-wing Tory MPs.The former Ukip leader is said to be one of hundreds of guests planning to attend the conference in London and will join Sir Jacob Rees-Mogg and former Tory deputy chair Lee Anderson, who will be speaking at the event. The PopCon movement is Ms Truss’s latest project since she was forced out of Downing Street. It is a platform for right-wing MPs to push Rishi Sunak to adopt hardline policies on immigration and tax before this year’s general election.The attendance of Mr Farage, reported by The Sunday Times, will pile pressure on Mr Sunak to listen to the group, as he remains a hero of much of the Tory right.Nigel Farage’s attendance will add to pressure on Rishi Sunak to pay attention to the PopCons Speaking to The Sunday Telegraph, the arch-Brexiteer said he was “very interested” in the event, which he is attending in his capacity as a GB News presenter.Former business secretary Sir Jacob and Ms Truss will be the headline speakers at the PopCon launch.The director of the group is Mark Littlewood, who ran the Institute for Economic Affairs think tank and was seen as the architect of many of Ms Truss’s policies.The latest push by free-market right-wingers is also backed by former ministers in the Truss government Simon Clarke and Ranil Jayawardena.It promises a “new movement aiming to restore democratic accountability to Britain” and deliver “popular” Tory policies.The Independent understands that the group is aiming to help shape the next Conservative manifesto in the months ahead, as Mr Sunak and party chiefs prepare their election campaign for the second half of 2024.Ms Truss’s latest association joins an extremely crowded field of Conservative groups and factions. It comes hot on the heels of gatherings by the so-called “five families” of the Tory right who tried to toughen up the Rwanda deportation bill.Liz Truss has been largely unapologetic about her unfunded spree of tax cuts that saw her short premiership unravel in October 2022 The European Research Group joined dozens of MPs aligned with the New Conservatives, the Common Sense Group, the Northern Research Group and the Conservative Growth Group to plot amendments which ultimately failed.Mr Farage’s attendance at the PopCon launch comes as he is expected to return to Reform UK, formerly the Brexit Party, as it seeks to fight the Tories in the general election.Speculation has been mounting for months about Mr Farage’s return, which could add to the scale of the electoral challenge facing Mr Sunak.His involvement would boost support for Reform among voters across the country concerned about high levels of immigration, and risks splitting the Conservative vote in dozens of Tory seats. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailLabour’s shadow technology secretary is planning a flurry of meetings with tech giants to discuss artificial intelligence developments during a visit to the United States.Peter Kyle arrived in Washington DC on Saturday in preparation for a week of discussions with the US government and tech firms, including Microsoft, Amazon, Meta, Google and Apple.He will also meet others involved in developing artificial intelligence (AI), such as Oracle, Open AI and Anthropic.Party officials said the Opposition frontbencher will use the talks with leading AI labs to discuss the potential for the emerging technology to improve public services, with plans to use it to speed up cancer scans and create personalised lesson plans for children.UK businesses can benefit hugely from the innovation this latest wave of technology can bringShadow technology secretary Peter KyleMr Kyle, whose brief also includes science, said he has already seen AI tools that he believes could have detected his mother’s lung cancer “earlier”, making its potential advancements in healthcare “personal”.The MP for Hove, in an article for The Daily Telegraph in November, said his mother died 12 years ago, with her illness going undiagnosed for 18 months despite presenting to doctors with pain “numerous times”.Speaking after arriving in the US, Mr Kyle said: “New technology is the greatest opportunity we have to restore our public services and grow the economy.“I have seen AI tools which I believe would have caught my mum’s cancer earlier.“It is personal for me to get this technology used in a way which keeps families together for longer.“UK businesses can benefit hugely from the innovation this latest wave of technology can bring.“A Labour government wants to unleash innovation and give companies the certainty needed to invest in our country, boosting wages and getting the economy growing again.”Labour, which is well in front of the Conservatives in opinion polls ahead of a likely general election later this year, has said it will introduce a Regulatory Innovation Office to speed up existing AI regulations and make safety reporting requirements mandatory for labs at the heart of innovation with the technology.In November, Prime Minister Rishi Sunak chaired the first global AI summit at Bletchley Park as world governments look at regulating the technology, which experts have warned could pose a danger to humanity if not effectively controlled.Andrew Griffith, the Conservative minister for science, said: “Despite attempts to mask their anti-business record and ideas, the reality is Labour can’t say how they would support businesses to use AI safely whilst utilising it to grow and thrive, because they do not have a plan.” More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailWatch live as Stormont sits on Saturday, 3 February, after two years of political collapse in Northern Ireland.Devolved government is expected to return as MLAs gather at Parliament Buildings for a sitting where ministers will be appointed to a powersharing executive, bringing an end to the impasse.Michelle O’Neill is set to become the first nationalist first minister.Sinn Fein’s vice president hailed Saturday as a “historic day.”“It is about the future. It is about working together to deliver for workers and families, and creating new and exciting opportunities that ensure our children and grandchildren can achieve their dreams and ambitions in life,” Ms O’Neill added.The DUP, the largest unionist party in the region, agreed to drop its two-year Stormont blockade in exchange for government measures aimed at addressing its concerns about post-Brexit trading arrangements that created economic barriers between Northern Ireland and the rest of the UK. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailRishi Sunak tried to cheer up deflated Conservative MPs by comparing the party to England cricket’s heroes.The prime minister likened the Tories to the English cricketers who produced an unlikely comeback by beating India in the first test.The Conservatives have been trailing Labour in the polls by around 20 points for months – but the Tory leader told his troops this year’s general election could still be won.The PM made the comparison at a dinner with around 100 of his MPs on Thursday night, according to Politico – insisting the party was down but not out.The Tories’ general elections chief Isaac Levido is said to have used the event at the Londoner hotel to tell MPs than there are an estimated 10 million voters who “don’t know” which party they will back.And Mr Levido promised the MPs that they would be getting another 15,000 leaflets for their constituency after chancellor Jeremy Hunt’s March 6 budget.Current polls predicts a Tory wipeout for Sunak and the Conservatives The Tory strategist recently attempted to gee up MPs by insisting he wouldn’t waste his own time on a doomed enterprise. “I wouldn’t be here unless I thought we could win,” he said.CCHQ is grasping at the idea of winning over enough “don’t knows” to force a closer contest, perhaps denying Sir Keir Starmer a majority even if Labour win the most seats.One minister recently revealed that internal polling shows that at least 20 per cent of Tory voters in 2019 have not made up their minds which party they will support.Mr Sunak’s address comes as cabinet minister Kemi Badenoch shrugged off claims that she is a member of a WhatsApp group titled “Evil Plotters”.The grassroots Tory favourite told ITV News on Thursday: “I think this is a nonsense story. This is the media trying to fuel lots of gossip about Westminster.”The business secretary is not believed to be pushing to replace Mr Sunak – but she has reportedly been holding regular lunches with key backers including housing minister Lee Rowley and digital minister Julia Lopez.Dougie Smith, a senior Tory strategist who has worked as an adviser to successive PM, is aiding a group of rebels MPs and ex-advisers actively plotting to oust Mr Sunak, according to The Times.Although Ms Badenoch has no involvement with the plotters, the group of disgruntled right-wingers are said to believe she is best placed to succeed Mr Sunak if he is pushed out in the months ahead.Kemi Badenoch reportedly a member of an ‘Evil Plotters’ WhatsApp groupCommons Leader Penny Mordaunt, another leadership favourite, was urged to reveal if she is a traitor or a faithful after being accused of giving a “bizarre” tribute to Mr Sunak – akin to the misdirection efforts in the hit BBC show.Labour raised questions about Ms Mordaunt’s recent defence of the “best of Great Britain” PM after senior Tory Simon Clarke had called for Mr Sunak to be sacked.Shadow Commons leader Lucy Powell compared it to The Traitors, the BBC reality programme in which a small group of “traitors” remain undetected as they plot to remove a wider group of “faithfuls” in order to win a cash prize.Ms Mordaunt did not directly answer the accusations – instead insisting that she and the Tory party had been “faithful” to the British public. “I will make the case that we are faithfuls on this side of the House.”LBC host Nick Ferrari is also said to have joked about the BBC show as he spoke at the Tory dinner last night – saying his listeners now believed party is “more like an episode of The Traitors”. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailWatch live as closing statements are heard in Phase 4 of the Post Office inquiry on Friday 2 February.Yesterday, three former subpostmasters had their decade-old convictions quashed at the Court of Appeal, taking the total number of quashed convictions due to the Horizon scandal to 100.Allen Reynolds, Nilufar Ali and Davinder Bangay were cleared of their convictions for theft or fraud, each dating back to between 2008 and 2011.Each of the former Post Office workers was ordered to carry out at least 100 hours of unpaid work in their sentencings, with two of the former subpostmasters ordered to pay back more than £10,000 each after then-unexplained shortfalls in their accounts.The three appeals were lodged within the past two weeks and bring the total number of convictions successfully overturned to 100, including eight cases prosecuted by other bodies than the company.More than 700 Post Office branch managers around the UK were prosecuted between 1999 and 2015 after faulty Horizon accounting software made it look as though money was missing from their shops.Hundreds of subpostmasters and subpostmistresses are still awaiting compensation despite the government announcing that those who have had convictions quashed are eligible for £600,000 payouts. More