GOVERNMENT BORROWING FALLS AS CHANCELLOR CONSIDERS POSSIBLE WINDFALL TAX

UK government borrowing, the difference between spending and tax income, was £18.6 billion in April. This was down £5.6 billion year on year and lower than forecast, but still the fourth highest April borrowing figure since monthly records began and significantly higher than in April 2019, before the pandemic. Tax revenues increased as April was the first month of higher rates of national insurance, although government spending in the month included the £3 billion cost of the council tax rebate scheme (BBC News).

Separately, the Financial Times reports chancellor Rishi Sunak has asked Treasury officials to draw up plans for a possible windfall tax on excess profits made by electricity generating firms, in addition to a possible tax on North Sea oil and gas producers. However, HM Treasury said that no decision has been made as to whether to impose a windfall tax.

CONSUMERS START TO FEEL THE EFFECT OF THE COST OF LIVING CHALLENGE

Over 20 per cent of householders have described themselves as “struggling” to make ends meet, according to market research firm Kantar. It said the rising price of groceries was the main concern to people, followed by increases to energy bills (Reuters). Building society Nationwide has said it has seen consumers cut back on non-essential spending, including reducing the amount they spend on TV streaming services (Guardian).

In a separate survey conducted by PwC, almost 20 per cent of workers say they are likely to change jobs in the next 12 months in order to secure higher pay (BBC News).

NEWS IN BRIEF

Andrew Bailey, governor of the Bank of England (BoE), has publicly hit back at criticism being made in regards to the BoE’s actions over inflation. Mr Bailey said he did not believe that in responding to the Covid-19 pandemic the BoE has let demand get out of hand and therefore driven inflation (Financial Times).

Hybrid working remains popular, with only eight per cent of those who have worked from home saying they would return to the office full-time, according to a survey by the Office for National Statistics (The Times).

Consumer group Which? has found some people face a long wait on the phone if they need to contact their bank to report falling victim to fraud (BBC News).

London’s newest underground line, the Elizabeth line, started operating today (CityAM).