More funding pledged from the UK Government to build the Sizewell C nuclear reactor, chair of the OBR calls out dishonesty from the chancellor, Trump takes the win of New Hampshire vote, and Sweden's Nato membership approved by Turkish parliament.
This week, the UK Government has pledged an additional £1.3bn in funding to build the Sizewell C Nuclear Reactor. This follows earlier commitments to spend an extra £500m last year and £700m the year before. According to the Department for Energy Security and Net Zero “The largest funding package to date will allow early construction works to continue ahead of a final investment decision later this year”.
The government’s latest announcement comes as forecasts for the cost of the project – which is being developed by French energy giant EDF – have been put somewhere in the region of £20bn. Funding for the project is evidently subject to headwinds and as the Financial Times notes, “the costs, lengthy timeframes, and potential risks of nuclear power mean the pool of potential investors is limited”. With the Government so far committing £2.5bn to the project, as of 2022, EDF have earmarked a smaller figure of £700m.
With its ambitions to quadruple nuclear energy output by 2050, the government hopes that their latest pledge will attract further investment into the project – which it says could meet 7% of the UK’s energy requirements or enough to power up to 6 million homes.
Staying with government spending: The Office for Budget Responsibility chair, Richard Hughes, has called out the chancellor for not being honest with voters over the probable scale of public sector cuts beyond 2025.
On longer term budgets he’s said “It is just two numbers – one for total current spending and one for total capital spending. I think some people have referred to that as a work of fiction. I think that’s probably generous, given that someone has bothered to write a work of fiction whereas the government hasn’t even bothered to write down what its spending plans are, unpinning the plans for public services”.
He’s also said that the government is treading a very fine line with planned spending cuts, with government forecasts showing fiscal headroom in five years’ time at just £13bn, and we saw late last year that even a short term fiscal forecast can swing by ~£5bn in just one month. Which means that if he’s too generous with tax cuts and his forecasts are wrong, he’ll fall foul of spending rules which means he’d either have to raise cuts or cut spending to step back in line. The Times has the full story: click here to read.
UK spending plans worse than fiction, budget watchdog suggests.
Richard Hughes, chairman of the Office for Budget Responsibility, who said the government ‘hasn’t even bothered to write down’ its intentions.
It was round two of the Republican primaries last night and with the contest down to a two-horse race, it was always going to be slightly more interesting.
With almost all the votes in New Hampshire now counted, it looks like Trump has taken the win by 56% to 44% for Nikki Haley. Trump won with a similar number in Iowa two weeks ago, but that was with Ron DeSantis still in the race. When he bowed out of the running Mr DeSantis threw his cards in behind Trump, but it seems that this endorsement hasn’t shifted to a full-on landslide for Trump, though he is very much in the driving seat.
Still, Nikki Haley isn’t one to be put off by a challenge by the sounds of it, as she’s vowing to continue and the next contest in South Carolina, where Ms Haley was the governor and has a strong support base – but is still a state that probably leans more towards Trump’s politics than hers. South Carolina is a month away and it’s looking like a long shot. Even Joe Biden has now said that it’s clear that Trump will be the Republican presidential candidate. Politico has a good breakdown: click here to read.
South Carolina probably won’t save Nikki Haley.
The long, ugly slog to next month’s contest may not change the race.
The Turkish parliament have approved Sweden’s membership of Nato, ending months of deadlock of the Nordic state trying to join the bloc. Following hours of debate, 287 of 346 Turkish MPs voted in favour of them joining the alliance with just 35 opposing the motion. Erdoğan is thus expected to sign the bill into law, kickstarting Sweden’s accession process. Nevertheless, given that Hungary is yet to approve Sweden’s bid, a final hurdle remains.
Since their application to join in May 2022, Erdoğan has blocked Stockholm’s attempts, making the accusation that Sweden’s links with the Kurdistan Workers’ Party (PKK) and other Kurdish organisations undermine Turkey’s security. Erdoğan’s Justice and Development Party (AKP) has long been hostile to Kurdish secessionists, and their ground offensive into the Kurdish region of north-eastern Syria in 2019 saw Stockholm place an arms embargo on Turkey.
Following yesterday’s announcement, Sweden’s PM Ulf Kristersson said that “Today we are one step closer to becoming a full member of Nato. Positive that the Grand General Assembly of Türkiye has voted in favour of Sweden’s Nato accession.”
If you would like a PDF of this commentary, please contact us and we'll be in touch.Contact us
Find out how we have helped our clients meet their hedging requirements.
Thought for Thursday, House of Commons ceasefire vote decision, minutes released from Federal Reserve monetary policy meeting, geo-political update in Russia and Gaza, and looking at today's data.
Word of the week Wednesday, data indicates public sector net borrowing in surplus, this afternoons House of Commons vote for a ceasefire in Gaza, and release of FOMC policy me.eting minutes
Travel Tuesday, changes for China's property market, attacks on Red Sea Vessels cause further shipping disruption, EU defensive naval operation launched, and US propose a UN Security Council Resolution in the Middle East.
Macro Monday, update on Israel-Gaza conflict, town in Ukraine in full control of Russian forces, and pressure for creation of more public-private partnerships in the UK from insurers.
Friday Feeling, Labour take comfort in by-election results, potential for income tax cut plans to be dropped, president of European Commission speaks on European Union defence production.
Thought for Thursday, data released this morning shows UK in technical recession, Sunak's pledge for economic growth takes a blow, increasing number of MPs not looking for re-election for the Conservative party, and Labour party lead drops seven percentage points.
Word of the week Wednesday, hotter than expected US inflation, inflation data in the UK comes in double than BoE's target, US Senate agrees foreign aid package, and today's data.
Travel Tuesday, plight of US commercial real estate owners according to Bloomberg, data shows increase in UK wage growth, easing UK unemployment, and talks to revive negotiations in the Middle East.