Jeremy Hunt aims business at “Budget to Grow”

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Good evening.

If you’re rich, have a child under three, own a research and development company, and enjoy going to the pub: congratulations, you’ve benefited greatly from today’s UK budget.

Chancellor Jeremy Hunt announced his “budget for growthmade the UK the best investment destination for any advanced economy as he announced £9bn in business tax breaks along with a range of measures to keep people at work, including an expansion of free childcare and a surprise decision to lift the £1m lifetime cap. tax-free pension contributions.

Hunt’s announcement was equally about a show of stability following the disastrous mini-budget of his predecessor, Kwasi Kwarteng, last September.

The chancellor was able to present a new analysis from the Office of Fiscal Responsibility, which said that the UK could avoid a technical recession this year. The economy will currently shrink by just 0.2% thanks to falling gas prices before recovering to 1.9% per annum by 2027.

Real GDP line chart (Q4 2019 = 100) showing that the UK is currently expected to avoid recession but growth is still low

The overall performance of the UK, as economics editor Chris Giles points out, still very lethargic: Prior to the global financial crisis of 2007–2008, it grew at an average rate of about 2.75 percent per year. ass our great reading explainsthe aftermath of the crisis was followed by further blows from austerity, the pandemic and Brexit.

The OBR also confirmed that the UK tax burden will reach its highest level since the Second World War in 2027-2028, with the ratio of government spending to GDP set at 43.4%, the highest sustainable level since the 1970s, which emphasizes the still precarious position. state of public finances.

In addition to expanding free childcare at one and two years of age and improving pension benefits, other plans to combat labor market inactivity included incentives for the sick, the disabled, and those over 50 to return to work or increase their working hours. . Hunt will be pleased with yesterday’s new data inactivity fall and slower wage growth.

While the significant personal tax cuts are likely to be maintained through the fall, several measures have been taken to help distressed households. The power supply scheme will be extended until June, capping typical bills at £2,500; last year’s reduction in duty on fuel will be maintained, the rate is frozen; and there will be an 11p duty reduction on a pint of draft beer in pubs.

There were also incentives to capture and store carbon as part of the green transition, while the nuclear sector would be classified as “environmentally sustainable” so that it could receive the same incentives as renewables.

While Hunt said the improved outlook for the economy was evidence that “the declinists are wrong and the optimists are right”, Labor leader Sir Keir Starmer countered that the announcement was just stagnation disguised as stability and “an enormous gift to some of the richest people in the country.”

After 13 years of Conservative rule, workers have the right to ask themselves if they are any better than when the party came to power, he said. “The voice response is no – and they know it,” he said.

Key Links

What you need to know: the British and European economy

British Prime Minister Rishi Sunak urged not to relax city ​​of london rules after the collapse of Silicon Valley Bank sparked calls for rethink planned regulatory changes.

The banking crisis in the US could also hold back European Central Bank from committing future interest rate hike. The ECB has already said it intends to raise borrowing costs by half a percentage point when its governing board meets tomorrow.

Brussels warned Germany that the restriction on electricity costs for industry damage the European single market. There has also been controversy among EU politicians over the inclusion atomic Energy in the new funding rules aimed at promotion of green industry. German energy giant Aeon warned about another year of crisis for the sector.

EU considers how to fend off US moves to stop companies bypassing export bans good sensitive technology producing it elsewhere.

What you need to know: World Economy

US consumer prices up 6 percent compared to the same period last year in February, which complicates the way forward for the US Federal Reserve and its program to raise interest rates, as well as a slight drop from January’s 6.4 percent. The “core” consumer price index rose more than expected by 0.5% from 0.4%. Separate data showed producer prices today fell more than expected. The FT editors criticized Republican chicken game on US debt.

The US wants to become the world’s largest exporter liquefied natural gas after developer Venture Global announced a major expansion of its Gulf Coast site to make it one of the largest LNG export plants in the world.

banks of lebanon the strike is over “arbitrary” judgments which they say drained their already dwindling foreign exchange reserves. The Lebanese pound has fallen more than 98 percent against the US dollar since the country’s economic downturn began in 2019.

Argentinaannual inflation rate in Russia passed 100 percent for the first time since 1991 and is now one of the highest in the world. The new data comes at a difficult time for President Alberto Fernandez’s government, which has hoped to ease financial pressure on voters ahead of elections in October.

Bolivians meanwhile they stand in line for dollars as a crisis of confidence is spreading, amid fears that his economic model of the past two decades, based on exporting natural gas to neighboring countries, is no longer working. Ratings agency Fitch yesterday further downgraded the country’s debt rating to junk territory.

Line chart of 2028 sovereign dollar bonds (US cents) showing Bolivian bond prices falling

What you need to know: business

ChatGPT manufacturer OpenAI has unveiled its new GPT-4 model, which has “performance at the human level”, and can be accessed through the paid version of ChatGPT for $20. PwC says it’s introducing a GPT chatbot named Harvey for accelerate the work of its 4,000 lawyers.

pfizer offered to change it Covid-19 Vaccine Contract with the EU after member states complained about an oversupply of vaccines, but some countries are outraged by his insistence on paying for ordered doses that will never be delivered.

Meta is cutting another 10,000 jobsthe second tranche in just four months as part of the “Year of Efficiency”.

Swedish startup Northvolt helps Europe compete with the US and Asia in a sector critical to the green transition. Our Big Read explains how. UK Battery Launch britishvolt up to £160m in debt when it collapsed in January.

Join FT journalists and guests for a subscriber-only webinar on the collapse of the Silicon Valley bank and the implications for banking and technology innovation. this Thursday, March 16, 1600-1700 GMT (1200-1300 ET). Register for your free subscription and ask your questions in our panel

World of work

Many organizations now offer employees internal therapy at a time when public health systems are overwhelmed. Trained therapists can help managers identify problems in the workforce when hybrid or remote work can make it difficult to identify mental health issues.

Online business education programs are still popular despite falling demand for MBA programs on campus. But what is the best way to choose and apply for a course? Find out and learn more in our new special report: Online learning.

good news

Some potentially great news for the over 8 million people in the US using insulin preparations. Novo Nordisk subscribed Eli Lilly in lowering the prices of some of their products 75 percent.

I’m working on it — Find out about the big ideas shaping the workplace in this weekly newsletter from Jobs and Careers Editor Isabelle Berwick. Register Here

Climate graphics: explanation – Understanding the most important climate data of the week. Register Here

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