37. Weekly Newsletter
UK net zero setback
The UK have ambitious targets for renewable energy schemes in order to fulfil their plans to reach net zero carbon emissions by 2050. One of the targets is to triple offshore wind capacity to 50 gigawatts by 2030. This target suffered a major blow this week as subsidy auctions for new contracts failed to attract any bids from offshore wind developers. Since 2010, Britain have attracted £120 billion in renewables and are projected to attract a similar amount once again by 2030, along with 480,000 jobs. A key part of the success for both the net zero plans but also boosting the economy is the continuing development of wind farms as the UK are 2nd to only China in wind farm capacity, placing wind farms at the forefront of UK renewable schemes.
The auction failed to attract any bids as a result of rising costs in turbines, cabling and wages which proved to be too costly for any developers. These barriers to developing renewables schemes in the UK represent a pattern too as other wind farm schemes have seen setbacks too in recent times. Swedish developer, Vattenfall, blamed cost rises of 40% and said that it was no longer viable to continue work on one of the largest UK offshore wind farm projects. The failure to attract any bids for further development of wind farms places UK net zero targets in jeopardy as Ed Miliband, Labour’s shadow climate secretary, called it an “energy security disaster”.
The UK’s front page news cycle over the last seven days covered a wide range of topics with no single issue dominating the headlines. Rishi Sunak looks to boost UK trade talks at G20 summit as well as news that UK wages are continuing to grow despite diminishing jobs market. Some of the newspaper front pages from last week were:
- Financial Times-UK wages grow at 7.8% despite slowing jobs market
- Financial Times-UK interest rates should rise further, says Bank of England Official
- Sunday Telegraph-Scandal Hit CBI in race against time to win back City and Westminster
- Sunday Telegraph-Net zero and ageing populations risk higher taxes, warns City bank
- The Times- BMW secures Mini’s future in Britain
- The Times- News Publishers ‘face a tsunami of job cuts as AI empowers big tech’
- Financial Times- Rishi Sunak looks to boost UK profile at G20 summit
The Office for National Statistics released latest employment data this week and it showed that wages were up by 7.8% compared to the same month a year ago. This makes it the highest rate it has been since records began in 2001, however more importantly for the current UK economy climate is the fact that it means that wages are now growing faster than inflation which is major boost during cost-of-living crisis. This is also in spite of the fact that unemployment rose to 4.3%, however this is still far lower than EU average of 5.9% in the same month.
BAE Systems to increase tensions
British multinational, arms, security and aerospace company, BAE Systems, have set up legal entity in Ukraine to explore setting up a manufacturing base in the country for light artillery aid. BAE already contributes a lot of the weapons donated to Ukraine including a self-loading, rapid fire artillery system called Archer which is manufactured in Sweden. The UK is not the only European country entrenching its ties further in Ukraine as the Swedish government recently agreed with Ukraine “potential co-operation over time on the servicing and production of CV90 armoured vehicles” which are produced by BAE’s Swedish venture. This strengthening and deepening of ties in Ukraine represents a huge risk as BAE’s choice to set up manufacturing in Ukraine to aid them with artillery has resulted in an unsettling response from Russia. The Kremlin have stated that it “will certainly not contribute to defusing tensions and resolving the conflict”.