Jeremy Hunt is planning to provide a budget boost to Britain’s growing artificial intelligence sector through a doubling of funding for the Alan Turing Institute – the national body for data science and artificial intelligence.
Despite being restricted in his scope for pre-election giveaways by the weakness of the public finances, the chancellor is expected to announce a five-year package of funding worth £100m.
The Treasury said the money would allow the Turing – set up in 2015 and named after the pioneering computer scientist and mathematician who died in 1954 – to make fresh advances in data science and AI.
The extra funding will be allocated to research in three areas where AI is seen as having an important role to play: transforming healthcare, protecting the environment, and strengthening defence and national security. Treasury sources said the money would have a direct impact on the public through better healthcare and tackling biodiversity challenges.
Jeremy Hunt is expected to give motorists a £5bn pre-election tax break in tomorrow’s budget, by – once again – freezing fuel duty.
There are multiple reports this morning that the chancellor will extend the current 5p cut in fuel duty for another year.
Hunt is also expected to scrap an inflation-linked rise in duel duty – extending a freeze that began in 2011.
Another freeze would help motorists through the cost of living squeeze, at a time when motor fuel is rising at the fastest rate in five months. The Daily Mail says it’s a bid to show “the government is on the side of ordinary motorists”.
Although not raising fuel duty in line with inflation and keeping the 5p cut will cost the Treasury £5 billion in the next fiscal year, it does not affect Hunt’s room for other tax cuts because they are deemed to be temporary — even though fuel duty has been frozen since 2011.
Jeremy Hunt is preparing to freeze fuel duty for another year in a move that will be welcomed by motorists but cost the Treasury about £5bn ⬇️ https://t.co/suRcvDwUla
— The Times and The Sunday Times (@thetimes) March 5, 2024
New data from the RAC this morning shows that average price of petrol rose by 4p a litre in February while diesel shot up by nearly 5p.
Yesterday, the chancellor insisted that he wants to move the UK to become a “lower taxed economy” but will only do so in a “responsible” way. That implies tax cuts funded by lower spending, rather than higher borrowing.
But new data today shows NHS funding faces the biggest cuts in real terms since the 1970s, an influential analysis shows, adding to the pressure on Hunt to prioritise public service funding over tax cuts.
The Society of Motor Manufacturers and Traders has also repeated its plea for “fairer” taxation of electric vehicles (EVs), urging chancellor Jeremy Hunt to halve VAT on the purchase of new EVs.
They also want public charging to be “as easy and affordable as plugging in at home”.
The new car market recorded its strongest February in 20 years, figures due this morning are expected to show.
The latest car registration figures from the Society of Motor Manufacturers and Traders (SMMT) are expected to show that new car sales rose more than 10% last month compared with February 2023.
The SMMT also reports that battery-powered electric vehicles had a market share of around 17% last month.
We’ll get the full sales data at 9am…
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
The health of the UK economy is in focus this week, as Jeremy Hunt puts the finishing touches to tomorrow’s budget.
And UK retailers are warning this morning that they suffered a grim February, as bad weather drove shoppers from the high street.
UK retail sales increased by just 1.1% year on year in February, much slower than the 5.2% annual growth posted a year ago in February 2023, the British Retail Consortium reports this morning.
That suggests a significant drop in sales volumes, as inflation was 4% in January.
Photograph: BRC
While food sales rose 6%, non-food sales decreased by 2.5% year-on-year as consumers continued to cut back on footwear, household appliances, furniture and clothing.
But there was a pick-up in demand for toys to entertain fractious children unable to go out and play last month.
Helen Dickinson OBE, chief executive of the BRC, said:
“Consumer demand was dampened by the wettest February on record, translating into a poor month of retail sales growth.
Not even Valentine’s Day lifted customers out of the gloom, and gifting products that typically sell well, like jewellery and watches, failed to deliver. On the sunnier side, rainy weather did brighten sales of toys, as parents looked for ways to occupy their children indoors.
The BRC’s sales data paints “a gloomy picture”, says Danni Hewson, AJ Bell head of financial analysis.
“Retailers can’t do much when the weather is so bad, apart from slash prices or try to encourage greater online ordering.
“Sadly, the backdrop remains difficult for a lot of consumers as interest rates are persistently high and household finances remain under pressure. Therefore, time away from the shops is more likely to result in less spending rather than shifting the emphasis to the online sales channel.
Also coming up today
China has set itself the ambitious target of growing its economy by 5% this year, as it battles the slowdown in its property sector, weak investor confidence and geopolitical worries.
The target was presented at the opening session of the National People’s Congress, where China’s premier, Li Qiang, spoke of the “challenges” facing China’s leaders. He cited the global economy and regional tensions as hurdles for China’s recovery, as well as domestic issues such as low consumer demand in a challenging labour market.
