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Pound falls again as agency downgrades outlook for UK’s credit rating to ‘negative’ | Business News

A measure of confidence in the UK’s creditworthiness has been slashed by another major ratings agency in the wake of the mini-budget, piling further pressure on the under-fire pound.

Fitch revealed on Wednesday night that it had cut the outlook for its credit rating on UK government debt to “negative” from “stable”.

It maintained its overall rating – with AAA being the ideal verdict – at AA-.

The shift reflected, it said, mounting concern over the level of borrowing required to fund the chancellor’s tax and spending pledges made in the Commons last month.

Financial markets delivered a stinging verdict on the package, dubbed a growth plan by Kwasi Kwarteng, with sterling eventually plunging to an all-time low against the dollar.

Investors also demanded higher rates of return for holding UK government debt, with the Bank of England later intervening to buy long-dated bonds to prevent a crisis for pension funds.

A series of U-turns have since helped the pound and bond yields recover some poise.

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Truss: ‘No shame’ over tax U-turn

The UK currency was, however, trading back towards $1.13 on Thursday morning though that partly reflected a rekindling of dollar strength after further oil market turbulence.

Fitch revealed its decision days after a similar move by rival Standard & Poor’s.

It said of the chancellor’s mini-budget: “The large and unfunded fiscal package announced as part of the new government’s growth plan could lead to a significant increase in fiscal deficits over the medium term.”

The agency hit out at the lack of independent budget forecasts from the Office for Budget Responsibility (OBR) in the statement and the policy clash that sees the government trying to grow the economy at a time when the Bank of England is trying to shrink demand in its fight against inflation.

It added: “Although the government reversed the elimination of the 45p top rate tax… the government’s weakened political capital could further undermine the credibility of and support for the government’s fiscal strategy.”

Sky News revealed on Wednesday that Mr Kwarteng was due to meet bank bosses on Thursday amid concerns about the impact of the recent market turmoil on home loan provision.

It has emerged that the average mortgage interest rate has risen to above 6%, meaning households are paying the greatest portion of their income on mortgage payments since 1989 – exacerbating the wider cost of living crisis.

UK’s economic policies could cause ‘many more deaths’ than COVID – with government urged to protect the ‘most vulnerable’ | UK News

The government’s economic policies could be causing “many more deaths” than the COVID-19 pandemic, an academic has warned.

In the space of eight years, almost 335,000 more deaths than expected were recorded across England, Wales and Scotland, researchers have found.

The “not only shocking but shameful” statistic is thought to show the “damaging impact” of difficult economic situations caused by the government reducing public spending.

Experts at Glasgow University and the Glasgow Centre for Population Health (GCPH) looked at data on deaths in the three nations from 2012 until 2019.

Tory divisions over 45p tax rate U-turn to dominate conference – politics latest

“This study shows that in the UK a great many more deaths are likely to have been caused by UK government economic policy than by the COVID-19 pandemic,” said Ruth Dundas, a professor of social epidemiology at the University of Glasgow and one of the authors of the report.

In its findings, the report stated there was now a “clear and urgent need… for such harmful policies to be reversed” and its authors urged the government to “implement measures to protect the most vulnerable in society”.

The research was carried out amid a “stalling of improvement overall” in mortality rates, with the number of deaths among the poorest members of society increasing since the early 2010s.

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Coffey’s NHS plan: Is it enough?

What did the study find?

From 2012, until 2019, 334,327 more people died than expected across England, Wales and Scotland, and more than half of them were men.

Among women, there were 77,173 excess deaths in England and Wales, as well as 6,564 in Scotland.

Published in the Journal of Epidemiology and Community Health, the study found that previously improving mortality trends changed between 2011 and 2013 in Scotland and England.

This occurred after the Conservatives, under the leadership of David Cameron, came to power in 2010.

From that time until 2012, death rates among women living in the 20% most deprived areas of England increased by 3%, and they did the same between 2017 and 2019.

In the previous decade, this figured had decreased by around 14%.

In Scotland, the number of premature deaths among the poorest communities increased by 6-7% in the same time frames after declines of 10-20%.

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NHS data reveals A&E delays

‘These deaths did not have to happen’

Speaking about the research, Dr David Walsh, the lead author of the paper, said: “These figures are not only shocking but shameful.

“We must remember that these are more than just statistics: they represent hundreds of thousands of people whose lives have been cut short, and hundreds of thousands of families who have had to deal with the grief and aftermath of those deaths.

“The tragic thing is that these deaths did not have to happen. In the words of the United Nations, in a society as wealthy as the UK, ‘poverty is a political choice’.”

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The government’s ‘plan for patients’

He urged the government to realise the “damaging impact of austerity” and respond with economic policies that improve life expectancy for everyone.

Scottish Health Secretary Humza Yousaf said the “shocking” findings reinforces the “urgent” need for the government to “change course” from its current budget proposals, which have caused concern among many MPs.

“Reinforcing austerity, and imposing deep real terms cuts on welfare payments and on public services as a whole, would simply add to the human toll so starkly illustrated in this study,” he warned.

His comments come amid speculation that the government could cut benefits in a bid to reduce public spending.

Former chancellor Rishi Sunak had promised to increase benefits in line with inflation, but current Prime Minister Liz Truss has said a decision on this policy “will be made in due course”.

With a failure to rule out a real-terms cut to benefits, concerns have been raised by Conservative MPs about the impact it may have on families already struggling due to the cost of living crisis.

Nearly half of UK’s offshore wind capacity owned by state-owned foreign entities, analysis shows | Climate News

Nearly half of all the UK’s offshore wind capacity is owned by state-owned or majority state-owned foreign entities, according to new analysis exclusively shared with Sky News.

Denmark’s Orstead, which is majority owned by the Danish government, and Norway’s Equinor come top of the list of public entities with the largest stake in UK offshore wind power, at 20% and 9% respectively.

They are followed by state-owned organisations in Sweden, Italy, China and France, according to analysis by the Common Wealth think tank and provided exclusively to Sky News.

Common Wealth’s assessment of publicly available data from the Crown Estate, which owns and leases much of the seabed around this country, found that the UK is twelfth on the list, behind United Arab Emirates, Ireland, Germany, Japan and Malaysia.

In large part this is because the UK government only owns a small renewable energy company called Offshore Renewable Energy Catapult, which is focused on research and innovation and holds a tiny percentage of capacity.

Director of Common Wealth Matthew Laurence said: “Public ownership of renewable power is already widespread in the North Sea – it just benefits other countries.

“It is time we correct that by creating a UK green energy generator: it would roll out clean power infrastructure faster, fairer, and more affordably than the status quo.”

Common Wealth’s report added that in 2021 alone, £2.5bn of energy bills paid by UK consumers went to foreign state-owned entities.

It also found that of the 58% of UK offshore wind capacity owned by private businesses, just a third are headquartered in the UK.

The largest private owners are Germany’s RWE, Scotland’s SSE, and Spain’s Iberdrola.

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The Trades Union Congress has also called for what it referred to as a “public energy champion” that would invest excess profits from the generation of electricity to cut bills and insulate homes.

Clean energy and climate change will be a key theme of this week’s Labour Party conference, although Labour leader Sir Keir Starmer has dropped plans to nationalise energy companies.

Prime Minister Liz Truss has spoken positively about wind and nuclear power but is resisting calls to expand a windfall tax on fossil fuel companies, has lifted a ban on fracking for shale gas in the UK, and is preparing to grant nearly 100 new licenses for drilling for oil and gas in the North Sea.

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UK’s biggest warship, HMS Prince of Wales, breaks down off south coast shortly after setting sail for US | UK News

The UK’s biggest warship has broken down off the south coast shortly after setting sail on what had been billed as a “landmark mission” to the United States.

HMS Prince of Wales, the second of the Royal Navy’s two aircraft carriers, was experiencing an “emerging mechanical issue”, a spokesperson said. The problem is being investigated.

The £3bn carrier, which became fully operational only last year, is reportedly anchored south east of the Isle of Wight while the investigation is carried out.

“HMS Prince of Wales remains in the South Coast Exercise Area while conducting investigations into an emerging mechanical issue,” the Royal Navy spokesperson said.

The problem was first reported by UK Defence Journal, an online news site focused on defence issues, which cited unconfirmed reports about damage to the starboard propeller shaft.

A second specialist news site, Navy Lookout, said the 65,000-tonne warship had suffered a “significant technical fault”.

“Should the issue prove to be serious it goes without saying that this is extremely unfortunate and not a good look for the RN [Royal Navy],” it reported.

The vessel suffered an 'emerging mechanical issue'. Pic: Royal Navy
Image:
The vessel suffered an ’emerging mechanical issue’. Pic: Royal Navy

The warship had departed from nearby Portsmouth on Saturday on what was described by the Royal Navy as a mission to “shape the future of stealth jet and drone operations off the coast of North America and in the Caribbean”.

The trip – provided it goes ahead – is set to see the carrier visit New York, Halifax in Canada and the Caribbean, operating fifth generation F-35 fast jets off the deck as well as drones.

Commanding Officer, Captain Richard Hewitt, said in a statement to mark the departure – and prior to the mechanical glitch: “Taking the HMS Prince of Wales task group across the Atlantic for the rest of this year will not only push the boundaries of UK carrier operations, but will reinforce our close working relationship with our closest ally.

“From operating the F35 Lightnings and drones to hosting the Atlantic Future Forum, none of this would be possible without the efforts of the amazing sailors on board, many of which are on their first deployment with the Royal Navy.”

HMS Prince of Wales, which heads a carrier task group, deployed with a frigate, tanker and an air group of helicopters and drones.

The F-35 warplanes are set to join the ship in the US.

Felixstowe strike: Workers at UK’s biggest container port to walk off the job for eight days | Business News

Workers at the UK’s biggest container port will go on strike for more than a week later this month in a dispute over pay.

More than 1,900 members of Unite union at Felixstowe will strike for eight days from Sunday 21 August until Monday 29 August.

The union said that employer Felixstowe Dock and Railway Company had failed to improve on its offer of a 7% pay increase, following only a 1.4% increase last year.

Almost half of the UK’s container traffic comes through Felixstowe and Unite said the action would hit supply chains, the logistics and haulage sectors, as well as international maritime trade.

It is the latest round of industrial action by workers pushing for pay to keep up with the cost of living.

Unite national officer for docks Bobby Morton said: “Strike action will cause huge disruption and will generate massive shockwaves throughout the UK’s supply chain, but this dispute is entirely of the company’s own making.

“It has had every opportunity to make our members a fair offer, but has chosen not to do so. Felixstowe needs to stop prevaricating and make a pay offer which meets our members’ expectations.”

‘Massively profitable and incredibly wealthy’

Unite general secretary Sharon Graham said both Felixstowe docks and its parent company Hong Kong-based CK Hutchison are “massively profitable and incredibly wealthy”, adding: “They are fully able to pay the workforce a fair day’s pay.

“The company has prioritised delivering multi-million pound dividends rather than paying its workers a decent wage.

“Unite is entirely focused on enhancing its members’ jobs, pay, and conditions, and it will be giving the workers at Felixstowe its complete support until this dispute is resolved, and a decent pay increase is secured.”

More talks are due to take place on Monday.

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Two more days of rail strikes announced in row over jobs, pay and conditions

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‘We need to remove power of militant unions’

In a statement supplied to Sky News, a spokesperson for the port said: “The company continues to actively seek a solution that works for all parties and that avoids industrial action.

“We understand our employees’ concerns at the rising cost of living and are determined to do all we can to help whilst continuing to invest in the port’s success.

“Discussions are ongoing and the company’s latest position in negotiations is an enhanced pay increase of 7%. We are meeting again on Monday 8 August with Acas and the union.

“The port has not had a strike since 1989 and we are disappointed that the union has served notice of industrial action while talks are ongoing. The port provides secure and well-paid employment and there will be no winners from industrial action.”

The Department for Transport has also been contacted for comment.

Felixstowe welcomes approximately 2,000 ship each year, according to its website, including some of the world’s largest container vessels.

Around 17 shipping lines operate from the port, offering 33 services to and from more than 700 ports around the world.