Closing post
Time for a recap.
The clouds covering the UK economy have darkened today, after mortgage approvals tumbled last month, company insolvencies jumped, and the IMF predicted Britain would be the only major industrialised country to see its economy shrink this year.
The Bank of England reported that mortgage approvals decreased to around 35,600 in December from 46,200 in November. Housing experts said higher interest rates and the cost of living squeeze had hit the housing market.
The number of companies falling into insolvency in England and Wales last year surged to its highest since 2009, according to figures from the Insolvency Service. Total company insolvencies registered in 2022 leapt by 57% to 22,109 from the previous year.
Uk households were hit by soaring price in supermarkets this month, with grocery inflation jumping to 16.7%.
2023 will be a rough year for the UK economy, according to the latest IMF forecasts which predict GDP will shrink by 0.6% this year, a downgrade of almost 1%.
The IMF revised up its forecast for global growth this year, though, to 2.9% from 2.7% before.
Labour shadow chancellor, Rachel Reeves, has told parliament that Britain has huge potential, but 13 years of Tory failure has been a “drag anchor on prosperity”.
She told MPs:
The UK is the only major economy forecast to shrink this year.
Weaker growth compared to our competitors for both of the next two years.
The World upgraded. The UK downgraded.
Growth even worse than sanctions-hit Russia.
Staff shortages, Brexit and mortgage costs are all holding the country back, experts say.
But there was better news from the eurozone – it avoided recession in the last quarter of 2022, with growth of 0.1%. France also managed modest growth in October-December.
Here’s the rest of today’s main stories:
Updated
Infosys, the company founded by Rishi Sunak’s father-in-law NR Narayana Murthy, is in a multimillion-pound dispute with the UK tax authorities.
HMRC and the Indian IT services firm, in which the prime minister’s wife, Akshata Murty, holds a stake of close to 1%, disagree over a corporation tax bill of about £20m, according to the company’s annual report.
The dispute, first revealed by the Times, is one of a clutch of tax issues the company has in a range of jurisdictions, including Australia.
Large tax disagreements that could affect a company’s operations or profits often have to be disclosed to shareholders and regulators. Infosys is publicly listed in India and New York.
