FirstFT: Sunak delivers ‘tax, save and spend’ Budget after improved forecasts for economy


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British chancellor Rishi Sunak yesterday delivered a “tax, spend and save” Budget in which improved official forecasts gave him a £35bn annual windfall of additional revenue on top of the £36bn a year of tax rises he had already imposed.

He chose to split this bounty between improving underlying UK public finances and spending more on public services to offset rising inflation.

As he sought to set out the government’s priorities after devoting much of his time as chancellor to firefighting the coronavirus crisis, Sunak said his third Budget “does begin the work of preparing for a new economy post Covid”.

The chancellor said this would be a UK economy of “higher wages, higher skills and rising productivity”, adding there would also be “strong public services”.

  • Opinion: The government has bowed to pressures for higher taxes, predominantly to protect the old, says Martin Wolf.

  • What it all means The important changes affecting personal taxes, investments, pensions and property.

Thanks for reading FirstFT Europe/Africa. Here’s the rest of the news — Gary

Five more stories in the news

1. Traders bet ethereum will benefit from ETF boost Traders are positioning for a surge in ethereum prices, which some are wagering will more than treble to $15,000 by March next year.

2. Investors warm to nuclear fusion. Private sector investment is flowing into nuclear fusion companies at record levels in the hope that efforts to generate clean, cheap energy are closer to realisation, according to a study co-published today by the UK Atomic Energy Authority.

3. Activist fund Third Point calls for break-up of Shell Royal Dutch Shell is under pressure to break itself up after the activist hedge fund Third Point built a large stake and accused the oil supermajor of being bogged down by an incoherent strategy.

4. Latest spat leaves ‘bitter aftertaste’ in US-Turkey relations Ankara is seeking to play down the damage caused by President Recep Tayyip Erdogan’s threat to expel 10 ambassadors, despite a carefully choreographed climbdown that averted the worst crisis in decades between Turkey and the west.

Recep Tayyip Erdogan and Joe Biden at a Nato summit in June
Recep Tayyip Erdogan and Joe Biden at a Nato summit in June. Turkey’s relations with its traditional Nato allies were already strained before the row over ambassadors © Murat Cetinmuhurder/Anadolu Agency/Getty

5. US warns of possible Islamist attack in America US intelligence agencies have warned that Islamist extremists operating in Afghanistan could attack America within six months as the country suffers what the UN has called “the world’s largest humanitarian crisis”.

Coronavirus digest

  • Novavax has filed for approval of its Covid-19 vaccine in the UK, saying other global regulatory submissions would follow “shortly”.

  • Merck has signed a landmark licensing deal with the UN-backed Medicines Patent Pool to expand low-cost access to its Covid-19 antiviral pill.

  • Forecasts showed the pandemic scars left on Britain’s economy would be less deep than expected.

Thanks to those who took our poll yesterday. Seventy-nine per cent of readers said they supported increased mask-wearing where they live.

The day ahead

Central bank news The European Central Bank will hold its monetary policy meeting today. The Bank of Japan will also issue its outlook report for economic activity and prices, plus monthly retail sales figures.

US economic data US will report initial jobless claims, real consumer spending and third-quarter GDP figures. Economists project GDP growth of 3.2 per cent on an annualised basis in the July-September quarter, compared with a 6.7 per cent expansion in the second quarter.

Facebook developer conference Ahead of the conference, there have been reports of a possible rebranding and restructuring of the company similar to what Google did with Alphabet.

Tech earnings continue Apple, Amazon, Nokia, Panasonic, Samsung and Sony report today. The changes Apple has made to its iOS operating system — making it more difficult to track users — is having a significant impact on other tech stocks.

What else we’re reading and listening to

A 26-country journey to the front lines of the climate battle Simon Mundy, the Financial Times’ moral money editor, tells the human stories behind “the greatest challenge in our history”.

Simon Mundy crossing a snowy valley in Mongolia’s Uvs province on a motorcycle
Simon Mundy crossing a valley in Mongolia’s Uvs province, which has recently been hit by unusually severe winters. Scientists have linked this to ice melt in the Arctic © Alice Wang

Listen: Can wellness apps beat staff burnout? The pandemic has turbocharged the trillion-dollar wellness industry. In the premiere of the new FT podcast, Working It, host Isabel Berwick talks to the chief executive of Grokker, a corporate wellness app.

Paying the price for the UK’s cost of living crisis Surging household bills combined with benefit cuts will hit the poorest families hardest, according to FT calculations. They are the group most likely to allocate a greater share of their spending to the necessities of food, gas and electricity.

Chart showing the poor will be hit hardest by the rising cost of necessities; share of total spending on food, gas and electricity by income decile (%)

Crypto will be as useless in the metaverse as they are now The hypocritical fantasy that underpins crypto also lies at the heart of the metaverse, writes Jemima Kelly. This isn’t about building a decentralised paradise where everyone can prosper and live in harmony; this is about making a small group of people rich.

Song lyrics strike a chord with private equity Movies and adverts have long given older songs a new lease of life through licensing deals. But the explosion of music streaming on platforms such as Spotify has transformed the scale of the business and now private equity groups have joined the party.

The rock band Fleetwood Mac
Fleetwood Mac celebrate a win at the 1978 Grammys. The band members have sold rights to their music over the past year as the sector booms © Michael Ochs Archives/Getty

Property

Located close to Henley, the “Flat Roofed House” — a remarkable residence designed by one of the most influential British architects of the early Modernist era, and now meticulously restored for contemporary living — combines comfort with original character.

The Flat Roofed House near Henley
The Flat Roofed House has a projecting glazed staircase at the front

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