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David Cameron warns of ‘danger and instability’ in the world as he defends UK strikes on Houthi targets | Politics News

Not taking military action against the Houthis would have led to “more attacks” in the Red Sea, according to Foreign Secretary Lord Cameron.

The British military took part in a joint operation in Yemen alongside the US this week in retaliation for the targeting of international trade in the key shipping lane – followed up by a fresh attack by the US on Friday night.

Lord Cameron said the action by the Houthis was “effectively terrorist attacks”, adding: “If you don’t act against the Houthis in the Red Sea, you are going to see more attacks.”

And he hinted the government would be willing to join in further military action, telling Sky News’ Sunday Morning with Trevor Philips the UK had “demonstrated that we are prepared to follow words and warning with action”.

Politics live: ‘Nonsense’ for South Africa to say Israel committing genocide

RAF Typhoons strike military targets in Yemen
RAF Typhoons strike military targets in Yemen

Lord Cameron also warned: “It is hard to think of a time when there has been so much danger and insecurity and instability in the world.

“The lights are absolutely flashing red on the global dashboard and what we need at that time is strong leadership and a plan and that is what we have with the prime minister and the team in place.”

The foreign secretary further defended the initial response to the attacks on ships in the Red Sea, saying there had been 26 incidents since November – including an attack on HMS Diamond, that saw over 20 drones and missiles used by the Houthis.

Asked about concerns that the military operation could lead to an escalation in tensions in the Middle East, the foreign secretary said: “What are the consequences of not acting?

“We have endured almost two months of continual attacks and we gave warning after warning and frankly, ultimately that wasn’t working and the number of attacks was going up, the severity of those attacks was going up.

“So not acting is also a policy, and it was a policy that wasn’t working.”

A spokesman for the Yemeni armed forces in the Houthi-controlled north of the country said in a televised statement that the bombardment “will not go unanswered and unpunished” – saying it would not deter their support for Palestinians amid Israel’s war in Gaza.

Lord Cameron denied any link between the Red Sea attacks, saying the action was “completely separate”.

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Houthis vow ‘punishment’ for attacks

However, also speaking to Trevor Philips, the former head of MI6, Sir Richard Dearlove, said the strikes had “inevitable” connections to the Israel-Hamas conflict.

“If one’s being rational in analysis, I agree with David Cameron that freedom of navigation is a different issue from Gaza, but the Arab street doesn’t think that,” he said.

“Inevitably there’s a connection. They’re going to have an impact across the whole area.”

Cameron may need to keep unintended consequences in mind

Rob Powell Political reporter

Rob Powell

Political correspondent


If there’s a foreign policy mantra to be extracted from David Cameron’s time as prime minister, it is likely around the cost of doing nothing.

As he wrote in his memoir about the 2011 intervention in Libya to stop a massacre in Benghazi, “to do nothing in these circumstances was not a neutral act – it was to facilitate murder”.

Two years after the Libya strikes and Cameron made a similar argument to persuade MPs to back bombing in Syria. It didn’t work.

He was defeated in a Commons vote and ruled out any intervention.

The now Lord Cameron says he still believes that was a mistake, but denies he is “over-correcting” by taking a firm line against the Houthis.

It is worth looking at how events in Libya and Syria ultimately played out though.

After initial claims of a new era of freedom, Libya eventually descended into violence, with the UK intervention criticised as ill-informed and lacking in strategy.

In Syria, President Assad remains in power, while Russian involvement there has increased Moscow’s influence in the region.

Two countries. Two different approaches. One similarly undesirable outcome for the UK.

A related danger hangs over military involvement against the Houthis. Set against the wider turbulence in the Middle East, any direct Western involvement must present a risk of triggering uncontrolled escalation.

Far from the cost of doing nothing, it may be the rule of unintended consequences that the foreign secretary should keep in mind.

The government has got the support of Labour in the action, with shadow health secretary Wes Streeting telling Sky News it was an “open and shut case”.

He also said his party understood the need to act “swiftly and decisively” without recalling parliament to debate the issue.

“These strikes were targeted and focussed and absolutely necessary in Britain’s self-defence and national interest,” Mr Streeting told Trevor Philips.

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How UK jets struck the Houthis

But the Liberal Democrats have attacked the government for “bypassing” parliament, and called for a retrospective vote on the action in the Commons when the prime minister makes a statement on Monday.

The party’s foreign affairs spokesperson, Layla Moran, said: “We remain very concerned about the Houthi’s attacks.

“But that makes it all the more important to ensure that MPs are not silenced on the important issue of military action.”

Weather warning issued for parts of UK – Eurostar warns of more delays as trains resume | UK News

Eurostar trains are set to resume this morning after “unprecedented” flooding in a tunnel brought travel chaos for thousands of people – as a severe weather warning was issued for large parts of the UK on New Year’s Eve.

Eurostar said all services would run to Paris, Brussels, London and Amsterdam on Sunday – but warned there could still be delays and packed stations.

Southeastern and Thameslink rail are also predicting serious disruption.

With New Year’s Eve celebrations hours away, the Met Office warned severe gales and heavy showers may lead to disruption.

A yellow weather warning for wind is in force from 10am until around midnight tonight.

The warning covers the south and southwest of Wales, much of the south of England, including the Isle of Wight, and the South West.

People have been told to expect gales and severe gales, with heavy showers potentially leading to disruption to road, rail, air and ferry journeys.

Bus and train journeys may also be affected and short term losses of power are possible in some areas.

Get the latest weather forecast for your area

The yellow weather warning covers parts of the south of the UK
Pic: Met Office

In London and the south, winds are expected to strengthen, while scattered, blustery showers are expected to develop throughout the day, possibly thundery along southern coasts.

Some brighter spells are possible between showers.

Eurostar problem ‘under control’

Travellers were stranded yesterday when all Eurostar trains to and from London St Pancras were cancelled.

Many were forced to frantically arrange a last-minute flight, ferry or road journey – with some people’s holiday plans ruined.

A man in St Pancras was seen holding an iPad reading “taxi to Paris”, while images showed the track near Ebbsfleet in Kent being deluged by a burst pipe.

Thames Water said it believed it was caused by a “fire control system and not a Thames Water pipe”.

However a spokesman for HS1, which operates the track, said: “The source of the flooding will be the subject of an investigation, but at this stage we have no evidence to suggest that the fire control system was related to the issue in any way.”

Eurostar said trains would soon resume after the problem was “brought under control”, adding that it was “sorry for the inconvenience”.

“At least one tunnel can now be used”, it announced, while still warning “some speed restrictions” in the morning could cause more delays and “very busy” stations.

All Eurostar trains have been cancelled
Eurostar trains have been cancelled
Passengers were left stranded at a packed St Pancras station in London

Southeastern rail services were also disrupted by the flooding – and the company said problems were likely to linger on Sunday with a reduced service between St Pancras and Ashford.

“Whilst service recovers, trains running between these stations may still be cancelled, delayed or revised to terminate at Ebbsfleet International,” it said.

Thameslink is also predicting “major disruption” until the early hours of 1 January – due to a “shortage of train crew”.

Services between Bedford and London, Brighton and London, and Three Bridges and London are expected to be worst hit.

There will also be no overnight services on the network for people heading back from New Year celebrations.

A spokesperson for HS1 also confirmed the Eurostar line “will be operational in the morning”.

“We understand how frustrating this has been for passengers and apologise for the inconvenience caused at such an important time of the year,” the firm added.

The Met Office said bad weather was unlikely to have been the cause of the tunnel flood as there hadn’t been any heavy rain in the area at the time.

People stand on a platform at the Eurostar terminal at Gare du Nord train station, as an unexpected strike by French workers at Eurotunnel, the undersea link between Britain and continental Europe, interrupted cross-Channel rail traffic, threatening the Christmas holiday plans of many travelers, in Paris, France, December 21, 2023. REUTERS/Sarah Meyssonnier
The first Eurostar to Paris is set to leave London at 8.01am on Sunday

A tunnel flooded near Ebbsfleet
The flood happened in the tunnel near Ebbsfleet in Kent

One of many travellers whose plans were ruined by the cancelled Eurostar trains was Matthew Hulls, 40, from Colchester.

He said he was “devastated” and had to return home after a surprise trip to Cologne for his partner was scuppered.

“My partner and I are big ice hockey fans of the local team and I’d purchased VIP tickets as a surprise for her, so (I’m) pretty devastated,” said Mr Hulls.

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It’s the second time this month that people have been left stranded due to Eurostar problems.

All services were temporarily suspended in the days before Christmas after an unexpected strike by French staff unhappy about their end-of-year bonus.

Pep Guardiola warns stars ‘you have to be careful’ on social media after burglary at Jack Grealish mansion | UK News

Manchester City manager Pep Guardiola has said footballers should not post too much on social media after a burglary at Jack Grealish’s home.

Thieves raided the 28-year-old England star’s Cheshire mansion as he was in action for the Premier League title holders at Everton’s Goodison Park in Liverpool on Wednesday night.

Members of Grealish‘s family and his fiancee Sasha Attwood were at the property at the time when they heard a disturbance and raised the alarm, The Sun reported.

Nobody was harmed but £1m worth of jewellery and watches was reportedly stolen.

It is the latest in a string of raids on the homes of wealthy footballers, including former Manchester City defender Joao Cancelo, who was attacked during a burglary at his home in December 2021.

Manchester City's Jack Grealish during the English Premier League soccer match between Everton and Manchester City at Goodison Park stadium in Liverpool, England, Wednesday, Dec. 27, 2023. (AP Photo/Jon Super)
Jack Grealish’s home was raided on Wednesday

Chelsea star Raheem Sterling, former Arsenal striker Pierre-Emerick Aubameyang, and ex-Manchester United players Paul Pogba and Angel Di Maria, have also been targeted.

Guardiola said: “They have security but unfortunately it’s happened. It’s happened many times.

“United players as well. I don’t know much about London but it’s happened (there), and not just in the UK – I know in Catalonia, where my family lives, many things happen.

“Today you have to be careful, definitely. Not much on social media – the less they know what you are doing the better. People are waiting (to see) where you are, what you are doing.

“Unfortunately it’s happened with Joao, which was so scary because the family was attacked.

“Jewellery, money, whatever – it’s tough – and the family being there is difficult to process. It’s tough for Jack, as it was with Joao before.”

Read more from Sky News:
Man charged with Good Samaritan’s murder appears in court
Eurostar trains cancelled after tunnel floods

Guardiola said Grealish didn’t train on Thursday ahead of his side’s home game against Sheffield United on Saturday, adding: “He was with the family.”

Grealish helped City to a 3-1 win before he was informed of the raid on his home on Wednesday.

Police said officers, supported by dogs and a helicopter, searched the area around the property near Knutsford but there was no trace of the suspects.

Falkland Islands sovereignty not up for debate, UK warns after Argentina’s new president vows to ‘get them back’ | Politics News

There is “no doubt” the Falkland Islands are British, Rishi Sunak’s spokesperson has said, after Argentina’s new president vowed to “get them back”.

Javier Milei, who was elected in Argentina’s presidential election on Sunday, has said Buenos Aires had “non-negotiable” sovereignty over the Falklands, known as Islas Malvinas by Argentines.

He said his government would “make every effort” to take the islands back “through diplomatic channels”.

But the prime minister’s official spokesperson said: “The UK has no doubt about the sovereignty of the Falkland Islands.”

The Falkland Islands were the subject of a bloody conflict in 1982 after Argentine forces invaded and briefly occupied the territory.

The war claimed the lives of 255 British servicemen, three islanders and 649 Argentine personnel.

Mr Sunak’s spokesperson said: “The UK government will continue to proactively defend the Falkland islanders’ right to self-determination.”

British ministers regularly cite the results of a 2013 referendum that saw close to 100% of voters on the islands, which has a population of about 3,500 people, opt to remain a UK Overseas Territory.

The No 10 official said Falklands rule was an “issue that was settled decisively some time ago”.

Read more:
A pope critic and Al Capone fan – meet Argentina’s new president
Falklands War: Remembering the friends who never made it to breakfast

Javier Milei used to carry a chainsaw at his early rallies as a symbol of his planned cuts. Pic: AP
Javier Milei. Pic: AP

New president pledges to recover islands ‘through diplomatic channels’

Mr Milei had reportedly said during a TV election debate: “What do I propose? Argentina’s sovereignty over the Malvinas Islands is non-negotiable. The Malvinas are Argentine.

“Now we have to see how we are going to get them back. It is clear that the war option is not a solution.

“We had a war – that we lost – and now we have to make every effort to recover the islands through diplomatic channels.”

In an interview with daily newspaper La Nacion, Mr Milei proposed the UK hand over the Falklands to his South American country in a similar way to how Hong Kong was given over to Chinese rule in 1997.

The populist politician, a self-described anarcho-capitalist who has been compared to former US president Donald Trump, conceded that the views of those living on the islands “cannot be ignored”.

‘Undeniable’ Falkland Islands are British

Defence Secretary Grant Shapps said it is “non-negotiable and undeniable” the Falkland Islands are British.

He tweeted: “99.8% of islanders voted to remain British and we will always defend their right to self-determination and the UK’s sovereignty.”

Rejecting any negotiation on the future of the Falklands, Mr Shapps highlighted how Royal Navy ship HMS Forth had been sent back to “protect the islands” in the southern hemisphere. It follows a nine-month stint by HMS Medway to patrol the remote location.

It comes after Mr Sunak criticised the EU for its “regrettable choice of words” in July after it appeared to have endorsed the name Argentina prefers.

Major flooding could continue until Tuesday after Storm Babet, Environment Agency warns | UK News

Flooding from major rivers could continue until Tuesday following Storm Babet, the Environment Agency (EA) has warned.

Despite the worst of the storm now having passed, rivers in North Yorkshire, the Midlands and the South West could continue to overflow, the agency said.

“Ongoing flooding is probable on some larger rivers including the Severn, Ouse and Trent through to Tuesday,” said EA flood duty manager Katharine Smith.

Derby City Council said there were record-breaking water levels in the River Derwent and said the clean-up could take several days.

Pictures gathered by a Sky News team in Rotherham and Catcliffe in South Yorkshire showed cars submerged up to the tops of their doors.

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Why so much rain has fallen on UK

In Scotland, where there was a red weather warning in the east of the country on Saturday, a large number of homes that lost power have been reconnected.

Scottish and Southern Electricity Networks said it restored power to 36,000 of its customers by 4.45pm on Saturday following a “day of progress” and was making a “final push” to “reconnect the remaining 700 properties”.

The most vulnerable customers are being “spoken to directly and are being offered practical help, support and accommodation where necessary”, it added.

The last remaining Met Office weather warning, for rain, expired at midnight.

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Rugby pitch submerged under floodwater

In the North Sea, off the coast of Aberdeen, a company operating a drilling platform said it had removed non-essential personnel after four of the platform’s eight anchors became detached in severe weather caused by Storm Babet.

Stena Drilling Limited said two coastguard helicopters and a search and rescue helicopter were “mobilised to transfer 45 non-essential personnel from the drilling unit to neighbouring platforms and to Sumburgh on the Shetland Islands”.

The Stena Spey platform remains secure and stable, the company added.

Read more:
Why we’re likely to see more storms like Babet

Forest floor lifted up by storm – dog walker catches on video

A car on a bridge washed away near Dundee
A car on a bridge washed away near Dundee

In London, King’s Cross station was closed on Saturday afternoon to “manage passenger numbers”.

Managers said it was because Storm Babet had brought “severe disruption to the rail network”.

A retired man with Parkinson’s disease said there was a “high chance of a crush” during overcrowding at the central London terminal.

John Hinson, 61, from North Ferriby in East Yorkshire, said people were “crashing against the barrier” as they tried to reach their trains.

“It was just so dangerous,” he said.

Waving a Palestinian flag on British streets ‘may not be legitimate’, Suella Braverman warns | UK News

Waving a Palestinian flag on British streets “may not be legitimate” if it is done to show support for acts of terrorism, the home secretary has told police chiefs.

In a letter to chief constables across England and Wales, Suella Braverman urged officers to use the “full force of the law” against shows of support for Hamas following its unprecedented attack against Israel.

It comes after vigils were held in Westminster for Israeli civilians killed and held captive, while pro-Palestinian rallies took place outside the Israeli embassy in Kensington.

Read more: Israel vows to ‘wipe out’ Hamas – live updates

Ms Braverman said targeting Jewish neighbourhoods, waving pro-Palestinian or pro-Hamas symbols, and chanting anti-Israeli slogans could all amount to public order offences.

Hamas has been proscribed as a terrorist organisation by the UK and many other Western nations, including the EU and the US.

Because of this, she reminded police forces that it is a criminal offence for people in the UK to:

• Belong to Hamas or invite support for the group

• Wear clothing in public that suggests they are a member or supporter of Hamas

• Publish images of flags or logos linked to the organisation

Ms Braverman joined officers in a patrol of Golders Green on Monday

“At a time when Hamas terrorists are massacring civilians and taking the most vulnerable (including the elderly, women, and children) hostage, we can all recognise the harrowing effect that displays of their logos and flags can have on communities,” Ms Braverman wrote.

 Suella Braverman speaks to volunteers during a visit to Bolton Lads and Girls Club
Suella Braverman has written to the UK’s chief constables

She added unrest in the Middle East has previously been used “as a pretext to stir up hatred against British Jews” – and there is an “obvious risk this pattern will be repeated during the current conflict”.

“In the past, this has included vandalism of Jewish businesses, desecration of memorials and religious sites, physical and verbal abuse of Jews on the streets, convoys driving through Jewish neighbourhoods hurling antisemitic abuse, and proliferation of antisemitism online,” she warned.

Read more:
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A Tube train bridge, branded with 'Free Palestine' graffiti, is seen in in Golders Green, London, Britain, October 9, 2023. REUTERS/Anna Gordon
‘Free Palestine’ was daubed on a railway bridge in north London

On Monday, a kosher restaurant in Golders Green – an area of north London with a significant Jewish population – had its windows smashed and a cash register stolen, while “Free Palestine” was daubed on a nearby railway bridge.

The graffiti is being investigated as a potential hate crime by the British Transport Police, with local authorities describing it as a “deliberate attempt to intimidate the Jewish community”.

A vandalised Kosher restaurant is seen near a bridge with 'Free Palestine' painted on it, in Golders Green in London, Britain, October 9, 2023. REUTERS/Anna Gordon
A kosher restaurant was vandalised in Golders Green

Ms Braverman went on to stress online offending must be treated as seriously as offline incidents – and all perpetrators must face “heavy criminal consequences” to prevent future incidents and ensure Jewish communities feel safe.

“There can be no place for antisemitism or glorification of terrorism on the streets of Britain,” she added.

Heathrow Airport warns services will ‘remain significantly disrupted’ after UK air traffic control fault | UK News

Heathrow Airport has said its services will “remain significantly disrupted” on Tuesday after air traffic controllers across the UK experienced a technical fault.

In a statement about the “technical issues” that affected the National Air Traffic Services (NATS), Britain’s busiest airport urged passengers to contact their airline before travelling to the airport.

“The issue has been resolved, however schedules remain significantly disrupted,” it said.

“If you are travelling on 29th August, please ensure you contact your airline before travelling to the airport.”

Brits stuck abroad as warnings disruption could last into the week – live updates


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London Gatwick has said it plans to operate a normal schedule on Tuesday following the disruption.

However, passengers have been advised to check the status of their flight with their airline before travelling to the airport.

London Stansted also said it planned to run a normal flight schedule on Tuesday, but added “our terminal may be busier than anticipated”.

And major UK airlines such as Tui and BA warned of “significant delays” for passengers amid changes to schedules.

By Monday afternoon 232 flights departing UK airports had been cancelled along with 271 arriving flights, according to aviation analytics firm Cirium. It equates to about 8% of all expected departures and 9% of expected arrivals, Cirium added.

The technical fault meant flight plans had to be input manually by controllers.

Read more:
What we know about system failure and how it’s affecting flights

What have airports said about the disruption?

While NATS has confirmed it has fixed the technical issue with the UK’s air traffic control system, airports have warned the disruption it has caused will continue. Here’s what some of them have said.

London Luton Airport: “The earlier technical issue with air traffic control systems has now been resolved, however widespread disruption continues across UK airspace.”

Manchester Airport: “As a result of the nationwide technical problem experienced by NATS earlier today, there continues to be flight disruption, including delays and cancellations.”

Newcastle International Airport: “We understand that the technical issue with National Air Traffic Services is now resolved, but it will take some time for operations to get back to normal.”

London Stansted Airport expects to run a normal flight schedule on Tuesday 29 August, following the nationwide technical issue that affected air traffic control. We do still advise passengers to check the status of their flight with their airline before travelling to the airport. As our airlines look to accommodate passengers whose travel plans have been disrupted over the past 24 hours, our terminal may be busier than anticipated.
Our teams will be working with our airlines and their handing agents to get you through the airport as smoothly as possible. Thank-you for your understanding.

Heathrow Airport: We apologise for any inconvenience as a result of the NATS technical issues today. The issue has been resolved however schedules remain significantly disrupted. If you are travelling on 29th August, please ensure you contact your airline before travelling to the airport.

Gatwick Airport plans to operate a normal schedule on Tuesday 29 August following disruption today (28 August). Passengers are however advised to check the status of their flight with the airline before travelling to the airport.

Transport Secretary Mark Harper said on Monday that “despite resolving the technical issue behind today’s air traffic control issues, flights are still unfortunately affected”.

He said he would encourage all passengers to read the UK Civil Aviation Authority’s guidance and “be aware of their rights when flights are delayed or cancelled”.

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‘I can’t get home to my nine-month-old baby’

Technical issue ‘remedied’ but travellers face continued disruption

Earlier on Monday NATS said the “technical issue” affecting its flight planning system had been “identified and remedied”, but travellers continued to face disruption.

“We are now working closely with airlines and airports to manage the flights affected as efficiently as possible,” NATS said.

“Our engineers will be carefully monitoring the system’s performance as we return to normal operations.

“The flight planning issue affected the system’s ability to automatically process flight plans, meaning that flight plans had to be processed manually which cannot be done at the same volume, hence the requirement for traffic flow restrictions.

“Our priority is always to ensure that every flight in the UK remains safe and we are sincerely sorry for the disruption this is causing. Please contact your airline for information on how this may affect your flight.”

‘Heightened recession risks’ as economy on course for contraction, report warns | Business News

A closely-watched indicator of economic activity suggests the economy is on course to contract in the current third quarter of the year and warns of “heightened recession risks”.

A preliminary reading for the S&P Global/CIPS Purchasing Managers’ Index (PMI), which covers the dominant services sector and manufacturing, highlighted a slump in factory output and broader weakness during August.

It blamed stubbornly high inflation and the effects of the battle to get the pace of price increases down, namely successive interest rates hikes by the Bank of England.

The survey’s data, it estimated, pointed to a 0.2% fall in overall economic output during the three months to the end of September.

If that was realised, it would not trigger a recession but potentially signal the start of one.

That is because two consecutive quarters of negative growth are needed to meet the technical definition. The economy grew by 0.2% in the three months to June.

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UK economy grows by 0.2%

The UK figures were published shortly after those for Germany and the wider euro area which showed similar trends.

The PMIs suggested that business activity in Europe’s largest economy, which is already in recession, contracted at the fastest pace for more than three years in August.

Its powerhouse manufacturing sector was found to have suffered a deeper downturn than expected while consumers also tightened their belts as services activity contracted sharply.

Germany led the wider eurozone’s reading deeper into negative territory.

Evidence of a growing slowdown prompted financial markets to trim their bets for a fresh hike to interest rates by the European Central Bank (ECB) next month.

That is despite inflation across the 20 nations that use the single European currency standing at 5.3%, according to the latest reading.

It remains well above the central bank’s 2% target.

Refinitiv data suggested that only 40% of market participants were now anticipating a 0.25 percentage point rate hike at the next ECB meeting.

The figure had stood at 60% before the worse-than-expected PMI data was released.

It is a nod to fears that further rate hikes risk deepening Germany’s economic woes at a time when its manufacturers are already grappling the effects of steep falls in demand both at home and abroad, particularly in China.

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China’s economy slips into deflation

The reaction to the UK data saw reductions in peak UK interest rate expectations too, with the pound also losing some of its recent steam against both the dollar and the euro.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said of the economy’s fortunes: “The early PMI survey for August suggests that inflation should moderate further in the months ahead, but also
indicates that the fight against inflation is carrying a heavy cost in terms of heightened recession risks.

“A renewed contraction of the economy already looks inevitable, as an increasingly severe manufacturing downturn is accompanied by a further faltering of the service sector’s spring revival.”

He added: “Companies are reporting reduced orders for goods and services as demand is increasingly hit by the cost-of-living crisis, higher interest rates, export losses and concerns about the economic outlook.

“Although cost pressures remain elevated, thanks mainly to rising wages, the deteriorating demand environment is
curbing companies’ pricing power.”

UK ‘at risk of recession next year’, think tank warns | Business News

The UK is on course to experience five years of “lost” economic growth and is at risk of a recession next year, according to an economic think tank.

The National Institute of Economic and Social Research (Niesr) said by 2024 income inequality will have grown, along with unemployment and levels of debt.

Researchers, writing in the think tank’s latest quarterly outlook, said “elevated housing, energy and food costs” would continue into next year, while gross domestic product (GDP) – a key indicator of a country’s economic output – would likely “barely grow”.

It said GDP was currently 0.5% below the level it was before the pandemic, and would not pass that level for another year – but also cautioned the outlook was “highly uncertain”.

“There are, in fact, even chances that GDP growth will contract by the end of 2023 and a roughly 60% risk of a recession at the end of 2024,” the think tank warned.

Its last forecast in February predicted that the UK would avoid a recession in 2022 – but said the strain from the cost of living crisis would make it “feel like” one.

Niesr’s outlook is more pessimistic than the Bank of England’s forecasts last week, which came as it raised the base rate for the 14th time in a row.

The Bank suggested a recession was unlikely in the coming years but did imply that the economy will effectively flatline all the way through to 2026.

Its chief economist, Huw Pill, also recently warned that food prices may not fall back to what they were prior to the war in Ukraine.

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On UK inflation, Niesr forecast that it will remain above the Bank’s 2% target until 2025, but said it could fall to 5.2% by the end of this year.

Real-terms wages in many UK regions are also expected to be below pre-pandemic levels by the end of 2024, according to the forecasts.

The poorest households will also experience a 17% shortfall in their disposable incomes in 2024 compared with five years earlier, while the richest households will only see a 5% drop, researchers predicted.

Professor Stephen Millard, Niesr’s deputy director for macroeconomic modelling and forecasting, said the “triple supply shock” of Brexit, the COVID pandemic and Russia’s invasion of Ukraine were major factors behind the dire economic outlook.

He said “the monetary tightening that has been necessary to bring inflation down” had also played a role.

Professor Millard added: “The need to address the UK’s poor growth performance remains the key challenge facing policy makers as we approach the next election.”

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Chancellor: ‘We recognise pain for families’

It comes after chancellor Jeremy Hunt said last week that he was working on plans to get the UK economy back on track.

He told Sky News: “What you’ll see from me in the autumn statement is a plan that shows how we break out of that low growth trap and make ourselves into one of the most entrepreneurial economies in the world.”