Newsletter 3rd October 2022

UK's Economy is Smaller Than Before Covid-19

Official figures show that the recovery from the coronavirus pandemic was slower than expected; the UK is the only G7 country with a smaller economy than at the beginning of 2020. This is likely to make it harder for the government to cut taxes.

Before the prime minister and chancellor met with the government's independent forecaster, the ONS revealed numbers indicating the GDP was 0.2% smaller than in February 2020 because of a more prolonged recession during the pandemic and a poor recovery.

Improved performance in the 2nd period of this year, which changed an estimate of a 0.1% decline to a 0.2% increase but also debunked the notion that the UK was in a recession by June, was insufficient to increase GDP growth enough to recover from the first lockdowns in 2020, which brought significant portions of the economy to a halt.

According to analysts, Richard Hughes, the director of the Office for Budget Responsibility, the Treasury's independent forecaster, would be compelled by the new data to adopt a firm approach when evaluating the effect of more borrowing on the public finances.

All the G7's major key economies, including France and Italy, saw a robust enough recovery to grow above their February 2020 levels.

Royal Mint Unveils King Charles III Coin

The Royal Mint, the official producer of British coinage, has revealed the face of King Charles III that will appear on British coins.

According to a Royal Mint statement, the portrait, which will initially appear on commemorative ￡5 and 50 pence coins to honour the late Queen Elizabeth II, was sculpted by British artist Martin Jennings and authorised by the monarch.

Per custom, the King's image will be positioned to the left, the reverse of his mother's.

The Latin inscription around the image reads: "? CHARLES III ? D ? G ? REX ? F ? D ? 5 POUNDS ? 2022," which equates to "King Charles III, by the Grace of God, Defender of the Faith."

John Bergdahl will create two new Queen Elizabeth II images for the ￡5 coin.

The 50 pence coin's reverse has a design from the 1953 Coronation Crown and will feature the Royal Arms in a shield. Between each shield is a rose for England, a thistle for Scotland, a shamrock for Northern Ireland, and a leek for Wales.

Prime Minister Can't Tell Whether Autumn Benefits Increase Will Take Place

The Prime Minister wouldn't say if benefits applicants will see real-term cuts this autumn.

Liz Truss told reporters that Work and Pensions Secretary Chloe Smith will declare whether benefits would be increased in line with inflation this fall "in due time."

Following the economic turbulence produced by the mini-budget, the Treasury has reportedly ordered departments throughout the government to make efficiency savings, or cutbacks, to their current budgets.

The decision is intended to reduce future government spending after Chancellor Kwasi Kwarteng's fiscal statement rattled markets

Earlier this last week, media sources indicated that the Treasury would write to Cabinet ministers, requesting that they make cuts within their current departmental budgets.

Read?Liz Truss's thoughts on whether the uprating will occur.

Kwasi Kwarteng,?Insists on Staying on Course.

The chancellor's strategy has generated market turmoil and concern among some Conservative MPs. Still, he will argue that it is "the correct one", and if nothing is done, the nation will "slowly decline."

Mr Kwarteng is under scrutiny after a backlash over his mini-budget, which was disclosed on September 23.

According to polling expert Sir John Curtice, the Conservative Party's reputation for economic competence may have been irreparably harmed by the mini-budget, and the party may have lost the next general election.

On the other hand, Mr Kwarteng and Prime Minister Liz Truss have said that their strategy is the only way to preserve the UK from economic disaster.

The Office for National Statistics (ONS) stated that the UK economy grew by 0.2% between April and June.

Mr Kwarteng's ￡45 billion proposal decreases the income tax base rate to 19% in April 2023 and eliminates the 45% higher rate for England, Wales, and Northern Ireland. The government anticipates the first six months of its two-year energy price freeze to cost ￡60 billion.

Concerns about how the plan would be paid for were heightened by the Treasury's refusal to provide an OBR assessment and Mr Kwarteng's pledge of more tax cuts.

Government borrowing rates skyrocketed in the days after the chancellor's remarks, necessitating intervention by the Bank of England.

Mr Kwarteng will present further details on his economic plan and an OBR estimate on November 23.