UK’s Sunak to slash thousands of civil service jobs, reports FT

Bloomberg

Chancellor of the Exchequer Rishi Sunak plans to cut tens of thousands of jobs within the UK civil service over the next three years, the Financial Times (FT) reported.
The Treasury is expected to set parameters for the reductions in early 2022, the newspaper reported, citing people briefed on the plans. The reductions are meant to save government budgets 5% over the next three years.
The cuts may undermine Prime Minister Boris Johnson’s effort to spread civil servant positions to left-behind areas, trade unions warned. The current government program envisioned 22,000 roles being moved from London by 2030, according to the FDA union. While Sunak’s plan implies a loss of 49,000 positions, the
result is likely to be less severe
because some jobs are exempt.
Sunak said at his spending review two months ago that he wanted to shrink the civil service’s size to pre-pandemic levels by the middle of the decade.

London exodus sees record spend on homes outside city
London residents spent the highest in a single year on housing outside the city in 2021, as people sought more living space during the coronavirus pandemic, the FT reported, citing an analysis of official data.
The 54.9 billion pound ($73.5 billion) tally beat the previous record of $49 billion set in 2007, even as the total number of transactions fell short at 112,780. The study by estate agent Hamptons used data from HM Revenue & Customs.
As the coronavirus pandemic led to a sharp rise homeworking, many have chosen to abandon the city for commuter towns where larger homes with gardens are more affordable. Three quarters of those leaving remained within easy commuting distance, the FT reported.
The higher outflows combined with a post-Brexit reduction in immigration could slow decades of population growth in London, Hamptons said.

UK debt costs see fastest spike since 2010
UK debt costs are rising at the fastest pace since the aftermath of the global financial crisis, a potential headache for Chancellor Rishi Sunak as he faces pressure to spend more to help businesses weather the impact of the omicron variant.
Figures showed interest payments made by the Treasury surged 54% between April and November, or by 15 billion pounds ($20 billion) to 42.9 billion pounds. That’s the biggest jump for the period since 2010.
Costs are mounting because a quarter of government debt is tied to retail prices, which have spiked this year. The jump doesn’t yet take into account the latest increase in the Retail Price Index, which hit a three-decade high of 7.1% last month, meaning debt interest will climb even more steeply. The Bank of England’s decision to raise interest rates last week for the first time since the pandemic began will also feed through into higher costs for the government.
Public sector pay has also rocketed in the past year, climbing 9.1% to 110 billion pounds so far this year as tens of thousands of people were added to the payroll to help battle the pandemic. Public sector wages were the fastest growing cost after debt interest.
Against that backdrop, Sunak may find it hard to meet key commitment on debt and deficit-reduction if inflation remains elevated for longer than initially expected.

That task has been made even harder by the rapid spread of the omicron variant of Covid-19, which is threatening to hit economic growth and push up government spending. With public fears about omicron hammering stores and hospitality businesses during the crucial Christmas period, Sunak is under growing pressure to restart government aid.
The good news for the Chancellor is that the budget deficit has come down since the heights of the crisis. The figure between April and November was 136 billion pounds, little more than half the shortfall posted a year earlier.
The deficit in November alone was 17.4 billion pounds, slightly higher than forecast. The decline this year reflects economic growth boosting tax receipts and reduced pandemic-related spending.