Burning Questions About Tariffs | New

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“There’s lasting damage that these policy reversals won’t change,” Reeves said. “They set everything on fire; now they insist that everything is fine. The truth is that an arsonist is still an arsonist even if he returns to a burning building with a bucket of water.

We can only assume his lyrics were inspired by the popular internet meme that shows a cartoon dog in a trilby, sitting at a table with a cup of coffee, surrounded by searing flames and billowing smoke. “It’s okay,” says the dog, in defiance of the reality around him.

As Prime Minister Liz Truss and her dwindling band of supporters try to stave off the flames, we all have to deal with the heat.

The latest inflation figures from the Office for National Statistics confirm that consumer price inflation hit 10.1% in September, matching the 40-year high seen in July. September’s inflation figure matters more than most, as it provides the benchmark against which policies for the following tax year are set, beginning in April.

Much of the mainstream media commentary has focused on whether pensions and benefits from the public purse will rise in line with 10.1% inflation next year. Within real estate, the hot topic is whether the money poured into the public treasury via professional rates will increase in the same proportion.

Property adviser Altus Group has calculated that a 10.1% rate hike would add more than £2.7bn to England’s 2023-24 rate bill, which without intervention will rise to 29, £6 billion over the next fiscal year. This sum will be recovered from the cash registers of shops, pubs, restaurants and cafes, as well as factories and offices. Or more specifically, it will be collected from those who manage to keep the lights on through the winter and still trade in April.

To date, the Truss administration has said little about the chances of a corporate rate adjustment. Chancellors Kwarteng and Hunt had other concerns, as we have seen.

But perhaps, if he has a minute, Hunt could consider another figure from the ONS, released on October 7. It recorded that business insolvencies in England and Wales in the second quarter of this year were at a level last seen in 2009, following the global credit crunch. In August, the ONS reported, more than one in 10 businesses said their risk of insolvency was moderate to severe.

Business bankruptcies in the accommodation, hotel, wholesale and retail trades have reached their highest level since 2012, when sectoral data began to be collected by the Insolvency Service.

Hunt’s decision to scrap a proposed alcohol duty freeze has added further pressure on businesses in the hospitality sector.

Whatever the PM and Chancellor do here, Reeves is unquestionably right. U-turns may or may not save political skins, but they can never turn back the clock. The shock from the failure of the mini-budget is still rippling through pension funds, stock prices, exchange rates, borrowing costs and business confidence.

The economy is still on fire. If only the heat was real, it might help with those crippling fuel bills.

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