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Jeremy Hunt Going for More Tax Cut Headlines

Thought for Thursday, Jeremy Hunt speaks about further tax cuts in Washington, US House Speaker wants action for votes on US foreign aid bills, second year for Sudanese conflict, and what's happening today.

Thought for Thursday

“We may sit in our library and yet be in all quarters of the earth.” – John Lubbock, The Pleasures of Life

Jeremy Hunt Going for More Tax Cut Headlines

The Chancellor is in Washington for the IMF spring meeting and wasting little time in racking up column inches with US correspondents from UK news outfits!

Jeremy Hunt seems to be trialling his messaging for the general election, using such terms as ‘economic soft landing’, ‘turned a corner’ and ‘better times ahead’ when talking about the economy.

As well as talking about what he’s managed to achieve (and the jury is out on whether double digit inflation could be considered a soft landing) he also spoke about wanting to take another two pence off National Insurance ahead of the election but would only do so if it was ‘responsible’ to do so.

Adding to the fiscal responsibility messaging, he also said that he wants to go ‘further and faster’ in bringing down the cost of benefits, saying that the rise in unemployment benefit claims was unsustainable – though his plan seems to be more about reducing the supply of benefits than the demand for them.

The government would have been keen to get as much coverage of Jeremy in the US, lest there be time for Rishi on Rwanda. The bill is now in the ping-pong stages between the Lords and the Commons, with both seemingly refusing to make concessions to appease the other side.

US Aid Bills

In the US, House speaker Mike Johnson has said that he wants to get votes on foreign aid bills concluded ASAP, which could mean them happening this side of the weekend.

The bills include aid for Ukraine, Israel and the Indo-Pacific and total $95 billion.

We’ve been here before, with holdouts coming from Republicans who are being influenced by Trump and encouraged not to vote for outright giveaways, instead angling for aid to be structured as a loan.

So the packages have been tweaked and, importantly, they’ve also been unbundled from each other, meaning three separate votes.

The tweaking has been to include a portion of the aid as a “forgivable loan” and there’s also a clause that the Biden administration would have to provide a plan for their strategy in Ukraine within 45 days of the bill being passed.

The timing of the bills comes as Israel-Iran tensions are running at a high and Russia and Ukraine are both reporting Russian advances in Eastern Ukraine as estimates are that Russia will be able to fire ten rounds for every one that Ukraine can spare from its dwindling supply.

Sudanese Conflict Enters Second Year

This week marked a year since the latest civil war in Sudan reignited violence across the fragile the Northeast African state.

On the 15 April 2023, violence erupted between two armed factions of the Sudanese government, with the Sudanese Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF) locked in a violent power struggle ever since.Last April, the RSF attacked state infrastructure under the control of SAF and put pressure on the de facto leader of Sudan, Abdel Fattah al-Burhan, to resign. Fighting erupted in the capital Khartoum as well as other urban metropolises like Omdurman with both the SAF and RSF taking control of different areas of the respective cities.With the RSF successfully capturing government building across Khartoum, the RSF and al-Burhan set up a temporary base in Port Sudan to the North East of the country.

The ensuing conflict has seen smaller factions join ether the SAF or RSF.The conflict in Sudan is the latest example of the fragility the country which has seen no less than 15 military coups since its independence from Britain and Egypt in 1956.According to the United Nations since the conflict erupted last April it has “pushed millions to the brink of famine” with the price of basic food items rising 83% given critical infrastructure being destroyed and farmlands being deserted.The fighting in Sudan has led to over six million people being internally displaced and a further two million being externally displaced.

Looking Ahead

On today’s economic calendar, the data is light but the sentiment is heavy, in that we have speakers from the ECB, the BoE and the Federal Reserve – all of whom will no doubt give some veiled hints that monetary policy cuts are no longer a foregone conclusion, probably with the exception of the ECB that remain keen to differentiate themselves as the central bank who are still up for cuts.

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