Blow for Truss and Sunak as debt costs hammer fiscal firepower


Good morning.

A record interest bill drove the budget deficit up to £22.9bn in June, limiting the next prime minister’s fiscal firepower as borrowing for the month hit the highest level outside of Covid times.

Debt interest payments, which are being pushed up by inflation on the huge stock of index-linked government bonds, hit an all-time high of £19.4bn in worse-than-expected figures.

Economists said the deterioration in the public finances would “limit the ability of the next PM to provide more relief for households”.

However, inflation and Rishi Sunak’s raid also drove tax receipts £8bn higher.

5 things to start your day 

1) Gas rationing will not save Europe from a winter crisis  Putin’s willingness to weaponise energy supplies means EU will struggle to fill storage

2) Green energy shift gives China ‘leverage’ over Britain, Lords warn  Overreliance on Beijing’s critical minerals market is a ‘national security concern’ 

3) Guardian editor handed inflation-busting £150,000 pay rise  Katharine Viner’s base salary increased by 42pc despite newspaper’s criticism of ‘profiteering bosses’

4) Robot camera deal with China blocked in first use of new national security law  University of Manchester prevented from sharing technology used in children’s toys, drones and other surveillance equipment

5) Gatwick hires 400 security staff to tackle travel chaos  Hiring spree aims to ease queues as school summer holidays begin

What happened overnight 

Hong Kong stocks opened slightly down this morning, with the Hang Seng Index dropping 0.4pc.

The Shanghai Composite Index eased 0.2pc while the Shenzhen Composite Index on China’s second exchange also fell 0.2pc.

Tokyo stocks also opened lower, the benchmark Nikkei 225 index dipping 0.04pc

Coming up today

  • Economics: Interest rate decision (EU), GfK consumer confidence (UK), initial jobless claims (US), Philadelphia Fed Manufacturing Survey (US)
  • Corporate: IG Group (full-year results); Howden Joinery, Moneysupermarket Group, Ocado (interims); 3i Group, AJ Bell, Anglo American, Brewin Dolphin, Britvic, Close Brothers, Diploma, Dunelm, Euromoney Institutional Investor, Frasers Group, Intermediate Capital Group, QinetiQ, SSE, Workspace Group (trading update)



Read original article here

Denial of responsibility! Vigour Times is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment
Enable Notifications    OK No thanks