Economics magazine - December 2023

Economics

THE WorLD IN BrIEF December 2023

Wilko is back!

Cap on bankers' bonuses uk house prices falling russian rubble dives & More...

Aurelius Groups In Talks To Buy 'The Body Shop'

By Isha Reports have recently emerged about the future of the Body Shop. Last month negotiations were initiated with Aurelius Group who were seeking interest in buying the muchloved high street brand.

WILKo IS BACK!

By Aamena & Maryam A mere month after Wilko closed, it is set to return! After Wilko closed its 400 UK stores, claiming collapse, they have now announced the reopening of five stores before Christmas in a dramatic turn of events. This initial rollout kickstarts many stores’ reopening throughout 2024, with stores arriving in Northern Ireland for the first time.

They won’t just be able to visit storesthere will also be the opportunity to browse the “100,000 items available on the recently re-launched wilko. com”. Get ready to see the big red sign on highstreets once more.

The business was founded in 1930, when JK Wilkinson opened the first store, following the collapse of Woolworths who were struggling for a while due to the rapidly evolved retail world. The firm, which simplified its name to just Wilko in 2014, grew to operate about 400 stores and employ 12,500 people.

The business was able to stay afloat, and as little as 10 years ago, was the undisputed leader of the discount sector, with a turnover peak of more than £1.8 billion in 2018. Then, suddenly, it came crashing down.

Through the months prior to Wilko’s collapse, turnover had decreased in every year. The company faced challenges by the pandemic and tighter consumer budgets in the

face of the living crisis. The business also faced pressure from rivals, such as B&Q and Poundland, who sold similar prices but at a lower cost.

During the pandemic, the store had piled up unpaid debts so ultimately filed for bankruptcy on August 3rd, 2023. In efforts to stay, they had borrowed £40 million, but were too late, as they were already struggling to pay suppliers and earn profits.

Attempts were made to save the brand. B&M said they would take up to 51 of the 400 shops that were closing, in a deal worth £13 million.

Poundland were also eager to take 71 shops and other High Street chains did signal some interest. However, the most important one of all was The Range. They were able to buy the brand for £5 million.

So how did the emotional ending of Wilko turn into a reopening?

The official statement is that “the public reaction to the loss of Wilko was undeniable” so they decided to reintroduce it to the highstreets.

After going bust, Wilko was taken over by CDS Superstores, which also owns the Range. It has been announced that some Wilko products will now also be sold in the Range.

CDS Superstores have also declared that former Wilko staff will be given priority in the recruitment process for the new shops. However, this

does not make up for the 12500 jobs that were lost in the closing down of Wilko, as each shop will only have 80 jobs available. Despite the claim that they would prioritise former workers, many were upset to find that they had not been contacted for jobs in the new stores. Lisa Swan, who worked at Wilko from the age of 17 until she was 41, has said that “it’s like those 24 years of loyalty didn’t mean anything” after having received no support when stores shut down. On the other hand, Tina Bellamy was offered a new job in Poundland only a few hours after closure.

The five new Wilko-branded stores are set to open in Luton, Plymouth and Exeter, as well as two further locations which are yet to be revealed.

The CEO of CDS Superstores has said that “This initial rollout is only the beginning for our plans for revitalising the Wilko brand on the nation’s high streets and retail parks, and we’ll be announcing further store launches and re-openings throughout 2024.”

Wilko’s collapse in October left people shocked and upset, with employees worried about their now uncertain incomes. Many were exhilarated with the news that they were set to return. We can only hope they stay for good this time.

The popular cosmetic giant has been a feature on British high streets for nearly 50 years. Founded by Dame Anita Roddick the chain’s considered to be known for its ethically sourced and naturally based ingredients from all over the world. Although it has struggled to achieve a profitable growth over the years it has still remained the brand that we know and love today and still has a significant presence on our high streets employing over 10,000 people in 3000 stores in over 70 countries across the world.

With current dwindling sales and profits, the Brazilian group Natura&Co are considering selling The Body Shop after 6 years since

2017 when it was bought for $1 Billion from L’Oreal. Natura&Co are also widely known for their ownership over the other cosmetic brand ‘Avon’ and have concluded on the argument discussing the difficulty of having to balance two cosmetic brands who are both suffering massively as a result of COVID and inflation.

The Body Shop has experienced noticeable struggles since 2022 especially after the insufferable challenges that the COVID-19 lockdown which is still lingering along with inflation which has left it counting pennies to survive.

Economists, like Neil Saunders, have expressed their unfazed response to the flop of the store, because of its lack of support for the economy. He says that ‘it has become very bland... and I think consumers just overlook it.’ Looking at the progress of the store, graphs and statistics reflect on the initial fast-growing business of the brand, where it targeted the

audience promoting self-care and natural beauty instead of anti-ageing and slimming, whilst also taking a stand on issues such as animal cruelty and veganism. Continuing from Saunder’s review, he says how ‘the business has underperformed for many years - even before the pandemic, it was underperforming.’

The Body Shop has not been gaining enough profit and therefore landed themselves in debt. This is why Natura&Co are considering selling.

Last month, Aurelius Group responded to the chain being put up for sale and expressed their interest in buying the chain. Aurelius is well known for the ownership of the trending streetwear and sportswear chain Foot Asylum as well as The Lloyds Pharmacy Group and wants to grow their ownership and variety by purchasing this cosmetic store.

It is learnt that if the deal is completed it will value at a lower price than the £400-500 million articulated in several media reports.

Aurelius has flattened competition from other rival bidders such as Alteri Investors, private equity firm Epiris and Elliot Advisors who also own Waterstones.

The company has been working with the bankers at Morgan Stanley on the sale and they are keen to finalise a deal before the end of the year. However, the future of the Body Shop remains uncertain due to the emerging competitors, such as: L’Occitane and Yves Rocher, who also seek to place sustainability as the heart of their business targeting the younger generation.

Cut the Cap! Will the cut of the cap on bankers' bonuses be a success or a failure?

By Anjalee & Jahnvi What’s currently going on?

It has been confirmed by Britain’s financial regulators that the cap on bankers’ bonuses will be scrapped from next year to boost the charisma of the City of London as part of a post-Brexit bid. Since 2014, under the rules inherited from the European Union, banks, building societies and investment firms have had to limit bonuses for employees to two times the base salary. Here, the EU’s objective was to make the financial system more stable by reducing the incentives for bankers in order to deter them from the type of risky behaviour that caused the global financial crisis in 2008.

However, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), after almost a year of consultations, have now decided to get rid of the cap from October 31st.

What was the Global Financial Crisis?

The global financial crisis was a time of world-wide intense stress for the financial markets and banking systems between mid 2007 and early 2009. This crisis had detrimental effects on our global economy, including a decline in global trade, a rapid increase in unemployment and rises in debt. Bankers’ bonuses were said to be one of the root causes of the global financial crisis causing the EU to implement a cap on bonuses to avoid excessive risk-taking following the global financial crash.

Was there an opposition to the cap at the time it was implemented?

Where did the decision to scrap bonuses originate from?

The UK strongly opposed to the legislation, with the then Chancellor, George Osborne, of even attempting to overturn its bonus cap at the European Court of Justice. Osborne described the measure as “entirely self-defeating”. The Bank of England was concerned that the cap would lead to a rise in fixed salary costs and crushed bank finances. Andrew Bailey, who is now the Governor of the Bank of England, was in charge of the PRA and called the EU’s bonus regulations the “wrong policy”.

Additionally, politicians were worried that London was losing businesses and talent to rival financial centres such as New York and Hong Kong because of the cap.

The original decision to scrap the cap on bonuses was announced by the former Chancellor Kwasi Kwarteng in his September 2022 minibudget. It was part of his plan to make postBrexit Britain a more competitive financial centre by taking advantage of the UK’s freedom to make its own rules. However, regardless of banks’ initial unhappiness when the cap was introduced, it remains to be seen whether many lenders will now want, or be able to, alter their pay structures again.

How’s society feeling?

As the cap on banker’s bonuses is being lifted, many opinions have risen in the UK’s economy. For example, a banking industry body said, “We support the removal of the bonus cap, which will ensure the financial services industry is globally competitive and make the UK a more attractive place to work for international professionals”.

However other significant bodies of the UK economy are not pleased with this decision. Some believe that Rishi Sunak is promoting a greedy culture, enabling bankers to gain unlimited pay-outs. Trades Union Congress (TUC) general secretary, Paul Nowak, said: “The Conservatives are presiding over the worst cost of living nightmare in generations. As millions struggle to cover the basics, executive bankers are now being given unlimited bonuses”.

russia's interest rates soar as their rubble dives

By Archita & vaibhavi

Russia has the highest rate of inflation as the Bank of Russia predicts an annual inflation rate of 7-7.5% for 2023. The Bank of Russia set a target of 4% inflation - a currently challenging goal due to a multitude of factors. Prominent contributors to Russia’s rising inflation have been the Russia-Ukraine war and the weakening currency (ruble). The weakening currency reveals that more goods are being imported into the country than exported, a problem since these imported goods have now become more expensive in the Russian currency – meaning a cost push in inflation, or in other words is referred to as unimported inflation, because the supply side is out of the control the Bank of Russia’s control. The reason Russia’s exports have fallen is largely due to the war with Ukraine as European and American sanctions have forced Russia to sell their oil exports at a reduced price, reducing their current account surplus to 15% of its 2022 figure of $184.8 billion. These events have led to today’s situation where the Bank of Russia has increased interest rates up to 15% to combat spiralling inflation.

Effect of the war globally The invasion of Ukraine by Russia in February 2022 has caused disruptions to the world’s food supply and increased energy prices. Inflation in the costs of food and energy has contributed significantly to global

price increases.

Demand for goods and services was exceeding the supply, and there was a strong rise in borrowing, which has resulted in a continuous increase in interest rates. The Bank of Russia has significantly raised interest rates previously; the bank increased rates from 9.5% to 20% during Russia’s initial invasion of Ukraine, however they soon lowered them. Energy prices are only one example of the numerous effects that have been felt worldwide and in the UK.

How does this affect the people of Russia?

Not only have the effects been felt globally, but there has been a significant increase in inflation for Russians; while the interest rate hike was done to combat this, it continues to leave the citizens of Russia struggling. The effects of increasing inflation, particularly to this level, have a significant impact on consumers: for example, rising interest rates have an impact on spending because it increases the cost of borrowing money. Therefore, people who have a mortgage, credit card, or a loan, may end up paying more for the money they borrowed; as a result, they will inevitably have less money for spending on goods and services. This will leave many Russians in challenging situations, lowering borrower confidence, which is typically an indication of an economic downturn.

How does this affect the Russian government?

While rising interest rates will slow economic growth and minimise pressure on prices, it is unlikely that the government will cut back on military spending. Compared to pre-war levels, Russia’s military spending has tripled, and the country plans to dedicate a staggering 40% of its budget to the military. According to the European Commission, the sanctions against Russia are effective.

A price cap plan was introduced

by EU leaders to restrict Russia’s earnings from oil exports, and the nation has been shut out of Swift, an international payment system utilised by thousands of financial institutions. This increase in interest rates may cause unemployment to rise, and slow economic growth, which is detrimental to any nation’s primary growth objectives.

Conclusion Russian inflation has conclusively spiralled due to the trade sanctions placed by the EU, UK and the USA. Russia’s decline in its oil exports and its lack of ability for Russian firms to borrow money from UK firms is contributing to ever-increasing interest rates as the country is increasingly backed into a limited trading corner.

Goat's Cheese & Mushroom Wellington An Alternative to a Sunday roast Ingredients:

Instructions

1 red onion Olive oil – 1/2 tbsp.

Salt – to taste Pepper – to taste Balsamic vinegar – 1tbsp.

Butter – 1 ½ tbsp.

Chestnut mushrooms – 150g Button mushrooms – 150g Garlic – 5/6 cloves Dried mixed herbs – 1tbsp.

Fresh spinach – 250g (optional) Roasted chestnuts – 75g (approx. 8) (optional) Walnuts – 20/25g Fine breadcrumbs – 2-3 tbsp Goat’s cheese – 50g – leave it out if you are going to make the wellington vegan or use a plant-based substitute Nutmeg – ½ tsp Puff pastry – one pack Egg/milk – for brushing the pastry

1. Finely chop your red onion (use a mini chopper to save time) and cook in olive oil with a pinch of salt on a medium heat until soft. Add in balsamic vinegar and wait for the liquid to evaporate – then transfer to a bowl to cool down.

Alternatively, cook the onions until soft, transfer to a bowl to cool and then add the balsamic vinegar. Leave the onions to the side whilst you get on with the rest of the recipe.

2. Fine chop your mushrooms. Save time and chop them in your blender. In a pan, melt butter, sauté the mushrooms, until the juices release. Add the garlic and the mixed herbs.

3. Once all the liquid has evaporated add the chopped spinach in the pan. Wait for it to wilt and all the water to dry out. There will be a lot of liquid, so you will need to be patient until there is not any liquid. If you are using the nuts, add them in now, chopped finely.

4. Let the mushroom mixture to cool down. Then transfer it to a large bowl, mix with the onions, breadcrumbs, salt, pepper and nutmeg.

5. Pre heat your oven to 180 degrees 6. Roll out your pastry (buy it from the supermarket, where it comes pre-rolled).

Tightly pack your mixture in the middle like a sausage. Add in the goat’s cheese, put it on the top of your mixture and on the sides of your mixture. Fold one side of the pastry over the mixture, brush milk/egg to seal then fold the other side of the pastry over – brush with milk/egg. Use a fork to press down the pastry so it is sealed tightly. Fold over the two longer ends and do the same thing.

7. Turn your pastry over. With a knife score a design. Brush milk/egg on top.

8. Put in the over for 30-45 minutes until golden and remember to over your wellington to ensure that the pastry is cooked at the bottom. Cook at around 180-190 degrees.

Does the uK need more international students than their own?

By Luiza & Kitty UK universities are suffering.

Current fee regulations prohibit any institution from charging students over £9000 annually due to cost, demand, employability, and affordability. Tuition fees should be higher due to inflation but have been capped, systematically defunding our universities. Subsequently, universities are facing many consequences. Money received from international students helped fund research. However it is now being diverted into compensating the shortfall on domestic undergraduate tuition. As well as this, UK universities are losing out on international students due to immigrations rules.

International students are taking an increasing share of the UK.

Actual UK tuition fees vs what they’d be after adjusting for inflation.

Share of students at UK universities, domestic vs international. Source: HESA

Source: Ons, Telegraph analysis. Fees adjusted using RPI Fees

Inflation adjusted

Foreign share

14k

100%

12k 75%

10k

How do tuition fees work in UK universities?

Before the early 2000s, UK universities were nearly completely funded by taxpayers - the amount received halved between 1975 to 2000. To address this shortfall, the prime minister at the time (Tony Blare) brought in tuition fees, despite facing opposition; these were initially set to £3,000 a year. By 2010 funding per student increased by 25% but this burden unfortunately shifted from the state to the graduates.

The amount the government directly spent on higher education has decreased by 4/5 since 2010!

Currently, there is a cap on tuition

fees set to £9000 per year, however the current rate of inflation calculates that university fees should be charged at £14,000 a year.

8k

How are international students contributing to universities?

4k

Due to the lack of cap on fees for overseas students, some selective universities charged them double or more what home students pay, which is the adjusted price for UK inflation rates. This makes up 1/5 of universities’ income. A few universities have started to limit home students to make more room for overseas students. Marchant,

Domestic share

50%

6k 25%

2k 2012

2014

2016

2018

who was due to leave UCAS this year, has stated “as a country, we need to be welcoming to undergraduate international students who want to come study here as we are aware that we are competing in a global market where students are also attracted by study in countries such as Australia, Canada and the US.” However at the same time, international students can try to claim scholarships at USA universities. For example, LSE’s population of international students outweighs the number of home students with a high population of 70%. The UK have been warned to embrace foreign students or lose them to rival countries, which would leave the UK on losing a lot of potential funding from their fees.

On the other hand, the government is worried that an increase in foreign students is damaging efforts to demonstrate is has control over it borders.

2020

2022

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

What are the costs of underfunded universities?

In a Westminster debate at the beginning of the year, Lord Johnson (the former conservative universities minister) has announced the long freeze in tuition fees has “systematically defunded our universities” and left unchecked, could result in them “falling over one by one.” The limit maintained on tuition fees is not enough to meet the needs of universities with the current levels of inflation, leading them to failure.

30 universities have reported financial losses in the last academic year, according to the sector’s regulator – numbers could triple in the next year. This has resulted in a marketing boycott led by lecturers, which was part of a long running dispute over pay, affecting 83 universities. Many graduate ceremonies across the country were transformed into protests by the students.

Many universities could be forced to make a “range of difficult and potentially unpalatable choices,” such as cutting down the number and types of courses available, hindering research and increasing the number of international students they admit.

Why is the UK becoming an unfavourable destination for universities?

Recently, changes to the immigration rules have resulted in an increase in the number of barriers to studying in the UK for foreign nationals.

Currently, the right for international students to bring dependant family members to the UK has been removed. This could potentially drive thousands of post graduate students to study elsewhere as these students tend to be older and more likely to have families. Furthermore, the home office is set to introduce significant increases to some immigration fees, meaning some overseas applicants could soon find themselves priced out of a UK education. As a result, UK universities are at risk of losing students and money.

uK house prices are falling like autumn leaves!

By Minnah & Maryam Lloyds Banking group predicts that there will be a continuous fall in housing prices until 2025. Lloyds, Britain’s largest mortgage provider and owner of Halifax, said by the end of 2023, housing prices would have fallen by 5% over the year and would decrease by an additional 2.4% in 2024.

How will this affect our economy?

The main factor that increases housing prices is low interest rates.

The borrower’s mortgage cost is low so demand for houses will be high. So, if interest rates are low, the person has to pay less interest to the bank and can borrow more.

This will result in them being able to spend more on houses, increasing the demand for housing, pushing house prices up, plus more buyers will be in the market. This means that there are high levels of regulation involved with planning permissions, so it is more difficult to be able to buy houses. This will lead to more demand for houses which equals high housing prices as we cannot increase supply of houses easily. House supply is controlled by government policy as they don’t give permission to build many houses. This will lead to buyers willing to pay more for a house as it is in high demand. Although the interest rate is high right now, (measured to be 5.25% in November 2023) it has yet to have its effect on the housing prices. Housing prices is forecasted to go down in 2025 (when these high interest rates will have affected the prices.)

Lloyds said that while prices would fall, long-term growth would be steady with, prices rising 0.6 per cent by 2027. The bank’s calculations and predictions are based on the Halifax house price index, which excludes figures for cash buyers, who make up more than 30% of housing sales. William Chalmers, Lloyds’s chief financial officer, told The Daily Telegraph: “The housing market in 2023 has been a little bit softer than we saw in previous years”. Lloyds Banking Group reported a pre-tax profit of £1.9 billion for the three months to September, up from £1.5 billion in the same period last year.

Furthermore, the outcome for Lloyds said its own finances were being tightened, as it started to implement higher rates to its savers. They said its net interest margin [key driver of bank income and accounts for the difference between what is charged for mortgages and paid on savings] went from 2.14% to 3.08% in July to September. This is because it took in less cash from loans and paid out more to savers, and Lloyds took in

£3.4 billion in net interest income, up slightly on the year before.

Similarly, Santander is forecasting a larger drop for the whole of 2023 of about 7%, then with a predicted ride of 2% in 2025. Through this year, the bank has seen UK profits before tax of £1.73bn in the nine months to September, also driven by higher rates. However, Santander is still receiving a “modest increase” in customers falling behind on mortgage payments, just as many banks have realized as well, but added that it expected higher interest rates to have a “more pronounced impact on households and businesses” in the future. Mike Regnier, UK chief executive of the Spanish-owned group, said the bank had “prioritised” the needs of customers and “provided competitive rates for savers”. Furthermore, Barclays revealed its net interest margin had dropped and would continue to fall over the months coming up to 2024. Statistics proved that profits before tax of £1.89bn

for the three months to September, down slightly from £1.96bn for the same period in 2022, leading it to cut its profit predictions. Barclays’ Chief Executive, CS Venkatakrishnan, said the bank had been “very disciplined and prudent and passed through interest rates to customers.” This is because competition has forced lenders to start reducing mortgage rates while paying out more for deposits, which can be argued is due to pressure from politicians who have pointed out that lenders/banks have failed to pass on interest rate rise for savers at the same speed that they have increased charges for borrowers.

This, in turn, has affected many people in many ways. Due to the rise in house prices, many people will borrow less as they do not have the money to pay off their mortgage due to the high interest rates. Interest rates are at 5.25%, the highest level for 15 years to tackle soaring consumer prices. As a result, lenders raised their borrowing rates (interest rates), including for mortgages. The latest figures show the average rate in a two-year fixed as 6.24% on average.

This makes it extremely hard for borrowers to pay off their mortgage as the high house prices and high interest rates will be difficult to pay off. Lloyds said that the number of customers falling behind in mortgage payments was “broadly stable” in the third quarter. This will result in less people borrowing due to them not being able to pay off their mortgages because of the high house process and interest rates.

Numerous lenders and banks have all predicted that housing prices in the UK will continue to fall until 2025.

This will have positive and negative impacts on savers, borrowers, and house owners.

Alumnae Interview – Class of 2011 priya aggarwal – shah – business owner 1. What is your job description?

What does a typical working day entail?

I run my own business in Public Relations, social media and Equity, Diversity and Inclusion Consultancy, with a focus on property companies. I initially set up this business as a networking group a few years ago, while I was working in PR and Public Affairs, but after the group took a life of its own, did exceedingly well and I grew increasingly passionate about it, I turned it into a limited company in summer 2020.

I ran the side hustle alongside my full-time job but took the decision to quit working for someone and run my own company in summer 2022. One year in, I love being a creative entrepreneur – winning my own business, advising clients, having authority over my own work and lifestyle. I spend my days writing and creating interesting content, supporting my clients and organising events.

I could be doing social media for a client in the morning, delivering a workshop to another one at lunchtime and then speaking on a panel event in the evening. Every day is genuinely varied, and I get a real sense of pride in delivering excellent work.

I also have great work-life balance, with the freedom to work from anywhere, finish early and pause for gym breaks any time during the day.

2. What subject and where did you study for your undergraduate degree?

I studied Politics and International Studies at Warwick University from 2011-2014.

3. What advice would you give to someone aiming to earn a role in your industry?

There two elements of my role – the actual work I do, which is a lot of media relations, social media, content creation and events – for this, you have to be a good communicator and creative.

You have to be personable and confident in taking a leading role. Good content must also be adapted for different audiences.

Having an understanding of different social media channels is also really important.

The other part of my role is working for myself or being an ‘entrepreneur’ – I enjoy this, but it doesn’t come without its worries.

I am responsible for creating and shaping my own work, ensuring I earn an income and

building a positive reputation.

I took the decision to work for myself after working for a few employers beforehand and I would highly recommend this to build your experience, skills, and connections.

4. What is your opinion of the importance of economics as a whole?

Extremely important. Economics is the foundation of all my work.

5. How did you cope with exam pressure and your university applications?

I tried not to follow the crowd and feel pressured into what many of my friends were doing.

Everyone has their own unique style of revising and it’s important that you focus on what works for you. For me, that was revising in a quiet space on my own (rather than with friends), and taking regular breaks to exercise and do things I enjoyed, such as listening to music or catching up on a TV episode (we watched Netflix less during my A-levels!).

6. Was there anything in particular that you prioritised in order to secure your position now?

I always say that your ‘network is your net worth’, so I prioritised networking and was always open to making connections. So many people opened doors for me, and I am where I am because of that.

So, get out there and meet new people, build your connections and thus opportunities.

7. What are best and worst aspects of your current role?

Best – freedom to set my day how I wish. I am passionate about my work, that most of the time it doesn’t feel like work. I also like how my work educates others.

Worst – chasing invoices!

8. Favourite sandwich?

Bombay sandwich, extra hot.

9. If there was one key tip you would give the students at WGGS, what would it be?

Explore a variety of options for your future – not just university, but apprenticeships are an increasingly important career option, as you can earn while you learn!

10. What are you currently watching on Netflix?

Currently doing a Harry Potter marathon.

At least India's economy is winning!

BY prEESHA & vIDA India have had constant media coverage of this season’s ICC cricket World Cup, their economy has been smiling massively with the amount of tourism that has been driven into the country. These worldwide cricket lovers have swarmed in 220 billion rupees or $2.6 billion into the Indian economy!

The matches took over 10 major cities in India including Ahmedabad, Hyderabad, Dharamsala, New Delhi, Chennai, Lucknow, Pune, and Bengaluru, where transport stimulated an increase in the circulation of money into the country, as fans circle India to sit within eye-distance of some of their favourite cricket players. With only 132,000 tickets and seats in these stadiums, prices for tickets were extortionate for foreigners, where some people’s wants and desires lead them to purchasing a £1000 ticket just to claim a seat in the stadium, despite the extra cost of travel and accommodation.

What did the lose mean to India?

In a world where India have been the kings of cricket, and in a country where cricket is like a religion, ‘the population of 1.4 billion came to a virtual standstill’. Says the AP NEWS. Furthermore, upon the tragic

loss and devastation for the whole country, THE GUARDIAN talks about the ‘Silence [that] defines the day as India’s Invincibles crash to cruel final twist’ where millions shed countless tears, and mourn the last game being played for some of their favourite players like Virat Kohli and Rohit Sharma. However, its economy has never been better, with an outstanding additional 5 percentage point growth in restaurants. Before the match, economists had predicted the hype for the match to bring about the equivalent of the ‘Taylor Swift Effect’, with this excitement being of a different level.

Indian cricket lovers within the country have celebrated with injecting so much money back into the economy with the sharing of ecstasy for India’s countless wins during the World Cup. Where the stadiums have injected so much money into the economy through investment spending of hiring them out. With cricket being loved by all ages, genders and classes, the sport transcends all the social divides and brings the economy together, especially with the younger generation being the driving force behind the growth of the country.

India’s economy has seen a massive improvement in its growth over the past few months, with them being set

to be the fastest growing nation by the end of the year, as well as being on the road to becoming the fifth largest economy in the world – even larger than Britain! With cricket being a massive catalyst in their economic growth, economists and analysts are still yet to calculate the current growth rates and statistical impact that the cricket world cup has had on the thriving success of the country.

India’s economic growth is currently at 7.2%, whilst having the second highest economical growth rate within the G20 countries. However, this doesn’t just stop there. India is projected to still grow their economy just as rapidly such that they overtake the German and Japanese economies, and therefore becoming the third largest economy in the world. With Qatar being the worlds fastest growing economy, and Saudi Arabia tugging on close behind them, India is slowing creeping up behind both nations. Although the cricket world cup has contributed the most recent growth in the economy, we must also give some credit to the level of investment inflows into India over the past decade, which has massively impacted the economy in the long run!

No Swifties here, Only cricket fanatics.

India’s hotel stocks are outperforming the country benchmark.

Source: Bloomberg

160 140 120

Lemon Tree Hotels Ltd (USD) MSCI India Index (USD)

100 80

Apr

May

Jun

Jul

Aug

Sep

Oct

two earners on the average income would see a benefit of £900. It’s essential to understand that employees pay Nics on their wages in addition to income tax, and employers also contribute for their staff. While Nics contribute significantly to the Treasury’s funds, covering certain benefits and the state pension, some commentators argue that the government’s apparent generosity may be offset by the previously announced freeze on personal income tax until 2028.

What does this mean if you are self-employed?

november 2023: hunt's autumn statement by vida & preesha The Chancellor of the Exchequer presented his Autumn Statement 2023 to Parliament on 22 November.

What is the Autumn Statement for?

Described in his speech as an “Autumn Statement for Growth”, the Chancellor of Exchequer: Jeremy Hunt introduced somewhat controversial measures to “reduce debt, cut taxes and reward work”, as well as setting out plans for reforms to the pensions industry. Jeremy Hunt claimed that it included the “biggest tax cut on work since the 1980s”.

The desired CPI, Consumer Prices Index, inflation rate is 2-3% and it has now more than halved from a high of over 11% last autumn to 4.6% in October 2023, which is what Prime Minister Rishi Sunak pledged to do earlier this year.

The economy has recovered from the pandemic more quickly than

thought, grown more than expected this year, and is forecasted to grow in every year of the forecast period.

To be able to lower the rate, the government must continue to bear down on inflation and the Office for Budget Responsibility, OBR, forecasts that “government policies in the Autumn Statement will reduce inflation next year”. With inflation falling and the economy and public finances stabilised after a series of unprecedented shocks, the government can now take the long-term decisions necessary to strengthen the economy and build a brighter future for the nation. The OBR estimates that government decisions in the Autumn Statement will boost business investment by £14 billion and bring a further 78,000 people into employment by the end of the forecast period. This means that the combined impacts of the Spring and Autumn policy measures will increase the number of people in

work by around 200,000 by the end of the forecast. Together, Autumn Statement policies are forecast to increase the economy’s potential output by 0.3%. This is in addition to a 0.2% increase to potential GDP resulting from announcements at Spring Budget 2023.

What does the National Insurance cut mean for employees?

The chancellor is reducing the main rate of national insurance contributions (Nics) for employees from 12% to 10%, starting from January 6, 2024. This change is expected to benefit 27 million workers. According to the Treasury, an average worker earning £35,400 would experience a tax reduction of over £450 in the fiscal year 202425. The Treasury also noted that a typical full-time nurse earning £38,900 would gain more than £520 annually, and working families with

The chancellor has made some updates to the national insurance system for self-employed individuals.

Starting in April 2024, self-employed workers will no longer need to pay the £3.45 per week class 2 Nics if they earn a profit of £12,570 or more annually. Additionally, self-employed workers pay class 4 Nics, which is currently 9% of their profits between £12,570 and £50,270, and 2% on profits above that. In the next tax year, the main rate will be reduced to 8%. The chancellor mentioned that these adjustments would result in a saving of £350 in 2024-25 for a self-employed person with £28,200 in profits. It’s important to note that the removal of class 2 Nics does not affect access to benefits like the state pension for self-employed individuals. Even without class 2 Nics, they will still qualify for these benefits. For those earning less than £6,725, voluntary contributions can be made to ensure eligibility for benefits. Individuals earning between £6,725 and £12,570 will receive a credit, which is the current practice.

Did Hunt cut inheritance tax?

Despite lots of speculation in the runup to the statement, the chancellor made no changes to inheritance tax, and it was not even mentioned in the accompanying documents.

Were there any property giveaways?

There were no measures to cut taxes for homebuyers or to boost home ownership, except for some plans

However, there will be no adjustments to the Lifetime Isa that would allow firsttime buyers to use them for properties costing more than £450,000, disappointing those who were hoping for such changes.

And Pension Savers?

designed to increase housebuilding in some parts of the country. There was some good news for renters who are claiming benefits to help with their housing costs: local housing allowance will be increased so that it is enough to cover the lowest 30% of rents. However, this won’t come into effect until April 2024.

What will happen to people who are Saving?

In April 2024, there will be changes for savers contributing to Individual Savings Accounts (Isas). Instead of being limited to a cash Isa and a stocks and shares Isa, individuals will have the flexibility to contribute to several of either type each tax year.

This means the £20,000 maximum investment can be spread across multiple cash Isas or held in several stocks and shares Isas. Additionally, savers will have the option to transfer part of their investment to a new provider, rather than being required to move the entire amount at once.

The chancellor has introduced a consultation on a proposal aiming to provide British workers with a single pension pot throughout their career.

The objective is to address the issue where individuals accumulate 10 or more different workplace pension pots, each with varying amounts, often leading to forgetfulness or loss within the system.

Under this plan, when an employee changes jobs, they would have the right to direct their contributions into an existing pension scheme rather than the new employer’s plan.

Subsequently, when transitioning to another job, they would carry this consolidated pension pot with them.

While seen as a commendable initiative, many commentators’ express scepticism, noting that implementing such a concept is highly ambitious and may take several years to realize. There are concerns that it could also pose significant administrative challenges for employers.

AN INVITATION FOR PROGRAMME SPONSORSHIP!

CALLING ALL WGGS ALUMNAE If you are interested in coming to speak to our students or completing an interview.

Please contact oldgrammarians@watfordgirls.herts.sch.uk

For Our 2024 Productions Of Antigone & The Addams Family Musical.

Antigone is our Drama/Classic collaboration and will be performing in the Tennet Centre Lecture Hall on 30th & 31st January 2024.

The Addams Family musical will be performing in the Hall in 13th, 14th, & 15th March 2024.

ADVERTISE WITH US. With your help of we would love to create a beautiful programme for our school plays.

Please do get in touch with Sarah Funnel if you can help us: s.funnell@watfordgirls.herts.sch.uk

The WGGS Economics department would like to offer ad space for YOU to advertise your business in our magazine, read by over a thousand within the WGGS community each half-term. Whilst promoting your business to our many readers, you will support our objective to make the magazine self-funding.

As part of your sponsorship, Invo Design will assist with the design of your advert at no extra cost.

If you are interested please get in touch with Meera Carr - m.carr@watfordgirls.herts.sch.uk

created by the wGGS Economics department Editors: vida & preesha wish you all a Merry Christmas & Happy Holidays

www.watfordgrammarschoolforgirls.org.uk

Designed by Invo Design sales@invo-design.co.uk

Part of Involvement.