The prime minister will announce plan to “mainline AI into the veins” of the UK. Meanwhile Treasury minister Tulip Siddiq is coming under increasing pressure over the way she used properties that were reportedly gifted to her. She has denied any wrongdoing.
Monday 13 January 2025 11:11, UK
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Nicola Sturgeon has announced she will end her marriage to former Scottish National Party chief executive Peter Murrell.
Confirming the news, the former first minister of Scotland said: “With a heavy heart I am confirming that Peter and I have decided to end our marriage.
“To all intents and purposes we have been separated for some time now and feel it is time to bring others up to speed with where we are.
“It goes without saying that we still care deeply for each other, and always will.
“We will be making no further comment.”
By Sarah Taaffe-Maguire, business and economics reporter
Will the market turbulence of last week continue? Judging by market data this morning, it’s a yes.
The original cause for concern in the first full week of January was government borrowing costs, as measured by the effective interest rate on that borrowing, the gilt yield, which reached highs not seen in decades.
Both the long-term 30-year and the benchmark 10-year were up this morning. The 30-year reached a new high of 5.47%, a rate not seen since mid-1998, while the 10-year ticked up but remained below the 2008-high seen last week.
More expensive borrowing means more costs for the government, potentially putting the chancellor in a position where she breaks her self-imposed fiscal rules by failing to bring debt down and balance the budget. Further spending cuts or extra tax rises could result.
The borrowing costs are particularly unwelcome when pared with news about sterling. One pound buys $1.21, a low not seen since October 2023. A weak pound makes it more expensive to buy things in dollars, which can bring up inflation and dampen economic activity.
Also potentially pushing up prices is oil reaching the highest price since October. A barrel of Brent crude will set you back $80.79. That cost rarely tipped over $74 a barrel during December.
On the stock market front, the news isn’t a whole lot better. The FTSE 100 index of the most valuable companies on the London Stock Exchange lost the gains of mid-last week having fallen 0.32%.
The bigger and more domestic-focused FTSE 250 reached a nearly nine-month low.
With a new week, we will likely see more discussion on controversy surrounding Treasury minister Tulip Siddiq – and her relationship with her aunt’s allies.
Her aunt is Sheikh Hasina, the former prime minister of Bangladesh.
And although Ms Siddiq has sought to distance herself from her aunt, claiming they never spoke about politics, Sky News has revealed she boasted about their relationship in a blog post.
In it, she mentioned how close they were politically and published photos of them together.
But what are the allegations against Ms Siddiq?
The claims centre on financial links between the minister and political allies of her aunt – the former prime minister of Bangladesh.
Ms Siddiq currently rents a £2m house in north London owned by a businessman with reported links to Ms Hasina’s Awami League party.
She also owns a flat in central London that the Financial Times reports was gifted to her by an ally of her aunt.
And she was registered at another London property that was transferred to her sister in 2009 by a lawyer who has represented Ms Hasina’s government.
Representatives from Mauritius have been in London this week to discuss the future of the Chagos Islands – days before the inauguration of Donald Trump.
Both parties are mounting a last-ditch effort to finalise a deal over the sovereignty of the archipelago – and a crucial UK-US military base – amid concerns that Trump could try to end it.
But British officials said today that “good progress” has been made.
A statement added: “Representatives from Mauritius and the UK held further productive discussions in London this week on the future of the Chagos Archipelago.
“Good progress has been made and discussions are ongoing to reach an agreement that is in both sides’ interests.
“Both countries reiterated their commitment to concluding a treaty providing that Mauritius is sovereign over the Chagos Archipelago; and that would ensure the long-term, secure and effective operation of the base on Diego Garcia.”
Questions have continued today about anti-corruption minister Tulip Siddiq, who is facing pressure over her relationship with her aunt’s allies.
Her aunt is Sheikh Hasina, the former prime minister of Bangladesh.
And although Ms Siddiq has sought to distance herself from her aunt, claiming they never spoke about politics, Sky News has revealed she boasted about their relationship in a blog post.
Today, Ms Siddiq avoided questions on whether she will resign as she left her home.
She simply told journalists: “Good morning, I hope you’re not too cold”.
Chancellor Rachel Reeves has “bruised” the confidence and trust of business by expecting it to fill the hole in government finances, the chairman of the Confederation of British Industry (CBI) has said.
Rupert Soames said business leaders were less likely to employ in the current climate.
He told the BBC: “The chancellor told us at the time of the budget that there was an unexpected hole of about £22bn in the government finances, and business was going to have to fill it.
“In filling in one hole, it’s created another, and that hole is a hole in the confidence and trust that business has in the government.
“I think sometimes it’s not understood, the extent of the impact, particularly on companies that employ lots of people.
“We think the national insurance increases are going to feed through into inflation, we’re going to have a lower growth rate, but also, because of things like the Employment Rights Bill coming along, you’re going to find people laying people off and less likely to employ.”
In the very last Politics At Jack and Sam’s featuring Politico’s Jack Blanchard, our deputy political editor Sam Coates was discussing the state of the British economy.
He says that Chancellor Rachel Reeves could face trouble on 26 March, when she delivers the Spring Statement, that could lead to “more budget cuts further down the tracks”.
“She’s in a very, very tight corner,” Sam explains. “The way out of it I think is growth.”
Hear more of what Sam and Jack had to say below:
Analysis by Rob Powell, political correspondent
There comes a point in the arc of most political scandals after which a resignation risks prompting more questions than it answers.
The danger for Tulip Siddiq – and by extension Sir Keir Starmer – is that threshold may about to be passed, if it hasn’t been already.
In other words, if she goes now, plenty will wonder why it didn’t happen sooner and why Downing Street allowed the story to gather pace and inflict further damage before acting.
The answer to this is partly because nothing has emerged so far that’s such an explicit rule break that it would trigger an automatic sacking or resignation.
That means the affair still resides – just about – in the box marked “looks bad” rather than the more sinister one marked “is bad”.
Tom Tugendhat, the former security minister, went on to describe a visit he took to China as chair of the Foreign Affairs Committee in 2017.
He tells Sky News Breakfast that it was on this trip that he discovered “quite how hostile it was”.
Mr Tugendhat adds: “We were in many ways targeted, my room was done over (searched) in a particularly obvious and therefore in a way to intimidate.
“One of the members of our delegation was attempted to be entrapped.
“We saw very clearly what the Chinese state was like.”
But Mr Tugendhat said at this point, in 2017, “we were still hopeful” of positive relations with China.
“The reality is the last decade of Xi Jinping has been very different… from when China was moving towards openness.
“And so I don’t think it’s appropriate now.”
Former security minister Tom Tugendhat is now joining Wilfred Frost on Sky News Breakfast to discuss the UK’s relationship with China.
The ex-Tory leadership candidate said it is clear that China is “certainly a threat”.
“You just have to look at what’s been going on in the UK,” he says, referring to “illegal police stations” in Croydon and Glasgow.
It comes as Chancellor Rachel Reeves visited China for trade talks, despite calls for her to cancel the trip.
Mr Tugendhat said China is “unquestionably threatening our interests” and “unquestionably threatening our values at home”.
The former minister said it is “absolutely reasonable” for British officials to meet their Chinese counterparts.
“But when you send the second most important person in the government… then its because you want to change the relationship, not because you want to maintain it.”
Mr Tugendhat said it “wasn’t clear… what that change is going to be”.
He accused the government of ignoring a security risk at home in favour of “pennies abroad”.
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