German property crisis deepens with ‘no end in sight’ – latest updates 

Germany’s construction sector continued to drag down Europe’s largest economy as its housebuilding industry suffered one of its worst declines on record, a closely-watched survey indicated.

The HCOB Germany Construction purchasing managers’ index (PMI) came in at 36.3 in January, down slightly from December’s 37 and among the worst figures ever recorded in the research.

Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said the German construction sector “is extending and deepening its downturn which has been in place since April 2022 for another month, with no near end in sight”. 

It comes after a top German industry chief despaired that Olaf Scholz’s net zero policies are “absolutely toxic” in a stinging criticism of the chancellor’s leadership.

Siegfried Russwurm, head of the BDI, said his country’s climate agenda is “more dogmatic than any other country I know”.

He warned that Germany was being placed at a disadvantage because of the government’s phasing out of nuclear energy and switching to renewables from coal and gas.

“Nobody can say with any certainty today what our energy supply will look like in seven years’ time, and that’s why no one can say how high energy prices will be in Germany then,” he told the Financial Times. 

“For companies that have to make investment decisions, that is absolutely toxic.”

Germany’s economy shrank by 0.3pc last year, while the OECD said its gross domestic product would expand by just 1.1pc in 2024.

Read the latest updates below.

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Hunt: Labour’s £28bn green pledge would put up income tax by 4pc

Income tax would need to rise by 4pc to fund Labour’s £28bn green spending pledge, according to Jeremy Hunt.

The Chancellor also claimed that an alternative approach to increase spending by £28bn while sticking to fiscal rules would involve increasing corporation tax by 8pc.

Mr Hunt’s remarks came as Labour leader Sir Keir Starmer said the funding package is “desperately needed” for his party’s mission to achieve clean power by 2030.

Labour originally promised in 2021 to invest £28bn a year until 2030 in green projects if it won the next election.

But last year the party said the figure would instead be a target to work towards in the second half of a first parliament.

Conservative MP Harriett Baldwin, who chairs the Commons Treasury Committee, asked Mr Hunt during Treasury questions: “Could the Chancellor explain to the House, if he had an ambition to spend an additional £28 billion a year on something, what level of tax would that impose on ordinary households?”

Mr Hunt replied: 

I thank her for asking that question. I’m curious as to where that figure £28bn has come from.

But, as she has asked it, I will tell her that to increase spending by £28bn – if you’re going to stick to fiscal rules, as the party opposite claims they will do – it would mean increasing income tax by 4pc or increasing the corporation tax they say they’re going to cap by 8pc.

1:19PM

Energy suppliers face £30 fine for failing to switch customers promptly

Energy suppliers will soon have to pay customers £30 if they fail to complete their switch to another company within five days.

Ofgem said switching rates continued to increase each month, and it wanted to “empower” customers to take control of their energy bills.

As part of an energy supplier’s licence, a company has to switch a customer’s electricity or gas supply within five working days from the date of the request.

Suppliers must currently pay customers £30 compensation if the switch is not completed within 15 working days but this is changing to five days from April 1.

Ofgem said the move followed extensive consultation and has received widespread support from leading charities and consumer groups.

Latest switching figures from the end of 2023 show a 9.3pc increase compared with October 2023, and are nearly three times as high as November 2022.

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