The Papers: 'UK heads into recession' and 'tax cut bonanza'

5 days ago 3
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By BBC News
Staff

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The majority of front pages focus on the difficult economic outlook the UK faces. The Guardian reports the Bank of England (BoE) has warned Chancellor Kwasi Kwarteng the country is already in recession, after the economy shrank for the second quarter in a row. The paper also notes the BoE hiked interest rates by half a percent on Thursday, continuing its efforts to reduce inflation.

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The increase in interest rates to 2.25% means millions are facing a significant rise in their mortgage payments, the i reports. The paper says Prime Minister Liz Truss and Mr Kwarteng are under pressure to prevent a "deep recession" with their "mini-budget" on Friday.

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The Financial Times also focuses on the Bank of England's interest rate hike, reporting that it has warned of a "further big increase" in November. It says the hike was "smaller than markets expected" and compared the move to the US Federal Reserve, which raised its own rate by three quarters of a percent to dampen inflation.

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The Daily Mail says Mr Kwarteng will reveal the "biggest tax giveaway" in 30 years as part of a move to break a "cycle of stagnation" in the British economy. The paper reports the government's "growth plan" has 30 measures to "drive down taxation, tackle high energy bills and curb inflation", which is currently running at nearly 10%.

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Under the headline "Go for growth!", the Daily Express also reports on what it calls the "biggest tax cuts in decades". The paper says "not since Margaret Thatcher" will taxes have been slashed this much and notes Mr Kwarteng will "herald a new era for Britain" when announcing them in the House of Commons.

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Calling it Mr Kwarteng's "£50bn gamble" over tax cuts, the Times reports the chancellor will say Britain must break the "vicious cycle of stagnation" and encourage economic growth. The paper says the announcement will also include 40 "investment zones" with lower tax rates, less strict planning rules and what it calls "streamlined environmental regulations".

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The chancellor has written a warning letter to the BoE's governor over keeping inflation down, according to the Telegraph. The paper says Mr Kwarteng told Andrew Bailey claims soaring price rises are mainly caused by the war in Ukraine are less credible since the government announced plans to interval on rising energy prices.

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"Back from death row" is the headline in the Metro, reporting on the release of five British people who faced execution in Ukraine after being capture by Russia. The paper says the men were freed after Saudi Arabia helped negotiate a prisoner swap with between Moscow and Kyiv.

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The Sun carries an exclusive claiming former Chelsea owner Roman Abramovich "played a key role" in negotiating the release. The paper says the Russian billionaire welcomed the five men onto a plane taking them from Russia to Saudi Arabia, giving them phones so they could contact their families.

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The Daily Star references an iconic Dad's Army scene by headlining "Don't tell 'em your name, Pike". The paper says "panicked Russians joined long queues" to flee the country and avoid being sent to Ukraine. Referencing a different - and rather more British - queuing story, the Star reports on the furore around Holly Willoughby and Phillip Schofield at the Queen's lying-in-state.

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The Daily Mirror leads with the killing of a 15-year-old boy in Huddersfield, who was stabbed to death outside his school. The paper says Khayri McLean was attacked as "horrified fellow pupils looked on" and died despite "desperate efforts" by a teacher to save him.

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