Jeremy Hunt expected to freeze fuel duty again in budget, as UK car market records strongest February in 20 years – business live | Business

In the City, bakery chain Greggs is aiming for more growth in 2024 after reporting a record financial performance for last year.

Greggs grew its like-f0r-like sales by 13.7% in 2023, its latest financial results show.

Total sales were up almost 20%, with Greggs’ expansion plans leading to a net increase of 145 stores (taking its total estate to 2,473 shops by the end of December)

Pre-tax profits jumped by 27% to £188.3m – swelled by a £20.6m insurance payout due to business interruption in 2020 during the pandemic.

Greggs benefitted from the slowdown in price rises for raw materials and energy last year

Greggs also reports that it has started 2024 “well”, with like-for-like sales up 8.2% ao far this year, and is confident of another year of good progress.

Roisin Currie, Greggs chief executive, says:

Our strong growth during these tough years for the British economy gives me great optimism for the years ahead.

Back in 2021, we were bold when we set out our ambition to double our sales by 2026 but we are ahead of our plan and have proven that our strategy to open new shops, extend into the evening, and build up our digital presence is a successful one.

Britain’s AI sector expected to get £100m extra funding in budget

Larry Elliott

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.

More here:

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”.

The Times reports:

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.

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.

A year ago, the Institute for Fiscal Studies pointed out that the chancellor could fund a bigger pay rise for public sector workers by cancelling plans for a fuel duty freeze….

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.

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.

And bitcoin is getting closer to its alltime high of $69,000, as the rally in crypto assets continues.

Overnight, the world’s largest crypto asset jumped as high as $68,828, meaning it’s gained 60% this year – and 161% over the last six months.

The launch of various exchange-traded funds which track bitcoin have helped push its value higher this year, analysts say.

Gold is also in demand, with the spot price of bullion near a record high this morning at $2,117 per ounce.

Kyle Rodda, senior markets analyst at Capital.com, adds:

“There are signs of slight irrational exuberance and maybe a squeeze of long-suffering shorts in some markets,” particularly bitcoin and gold.”

The agenda

• 9am GMT: UK car sales for February

• 9am GMT: Eurozone services PMI for February

• 9.30am GMT: UK services PMI for February

• 10am GMT: Eurozone PPI index of producer price inflation

• 3pm GMT: US services PMI for February