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Funding falls but City still leads rivals CHARLIE CONCHIE
DOUBLING DOWN SUNAK REPEATS PLEDGE TO HALVE INFLATION BUT FORMER BANK WONK WARNS ON ABSENCE OF GROWTH PLAN
JACK BARNETT RISHI SUNAK yesterday claimed inflation will halve this year “because of the plans [the government] have put in place”, but experts warned he has no blueprint to lift the UK economy out of recession. Speaking to the BBC’s Sunday with Laura Kuenssberg programme, the Prime Minister doubled down on a series of pledges he made in his maiden speech of 2023 last week. Sunak promised to slash inflation, get the debt pile down, grow the economy by
the end of the year, tackle the migrant boat crisis and cut NHS waiting lists. Critics have pointed out that the Prime Minister’s commitment to halve inflation – which has surged to a 40-year high of 10.7 per cent – had already been forecast by the Bank of England and Office for Budget Responsibility in November. The rate of price increases seems to have passed its peak, with latest Office for National Statistics numbers revealing it fell from 11.1 per cent in October. Andy Haldane, former chief economist on Threadneedle Street, cast doubt over
Sunak’s promise to boost the economy, saying the government does not have “a growth programme at all”. City analysts think Britain has already tumbled into a slump that risks lasting all year. New GDP figures out on Friday are expected to show the country is in a recession in all but name. Experts have pointed out inflation will naturally fall due to so-called base effects, when high prices drop out of calculations, forcing the headline rate lower. Energy prices, which have led inflation higher, have also dropped back to pre-
Russian invasion of Ukraine levels, and experts at Investec and Cornwall Insights think this summer the energy bill cap will actually fall below the government’s April uprated £3,000 peg. However, Sunak said the inflation decline will be driven by “a function of having a responsible economic policy when it comes to things like pay, when it comes to areas like borrowing”. The Prime Minister also warned on pay hikes for striking health and transport workers, saying the government “can’t help anybody” unless inflation falls.
INVESTMENT into the UK’s fintech sector slumped eight per cent last year but remained well ahead of rival hubs in Europe and Asia amid a sharp global slowdown, fresh data reveals. Soaring inflation and the shocks of war in Ukraine brought an end to a decadelong global venture capital frenzy last year. The UK’s fintech sector attracted some $12.5bn (£10.3bn) worth of capital, down from a bumper year in 2021 which saw $13.5bn pumped into the country’s fintech firms, according to data shared exclusively with City A.M. from the UK’s fintech industry body Innovate Finance. London firms attracted the lion’s share of the investment with $10.2bn invested in 2022, down only five per cent from 2021 amid a sharp, worldwide slump. Contractions in UK funding were markedly smaller than the global average as total global investment fell by nearly a third to $92bn, with the total number of investment deals around the world tumbling to 5,263 from 6,146. Innovate Finance chiefs said the sector was showing muchneeded resilience. £ CONTINUED ON PAGE 3
Richard Branson warns Britain has lost sight of the value of private enterprise CITY A.M. REPORTERS SIR RICHARD BRANSON has warned the UK no longer appreciates entrepreneurship – as he prepares the UK’s first ever rocket launch. Virgin Orbit is set to send a 747 named Cosmic Girl to 40,000 feet as soon as this evening – taking off from a spaceport in Cornwall – at
which point it will then release a rocket attached to its wing into space, sending seven satellites into orbit. Branson has told LBC, in an interview to be broadcast later today, that despite the successes of market capitalism, there is a danger the UK public at large does not necessarily see it the same way.
Asked if there was a “lack of appreciation” of entrepreneurship in the UK and whether “people don’t appreciate the benefits of what private enterprise can actually bring”, Branson said: “I think that’s true.” “There’s a lot of people that do, but a lot of people that don’t,” he continued.
Branson’s rocket launch marks a step forward in the UK’s ambition to become a space superpower, as more firms look to put high-end tech into orbit. Sir Richard Branson’s latest mission could begin today
Branson also describes the use of the term “billionaire” as “slightly demeaning” as it implies entrepreneurs are only in it for the money. “What I’ve tried to do is create things that people like, that enhance the Virgin brand, and that at the end of the year more money comes in than goes out.”
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