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UK state borrowing jumped last month, official data showed Tuesday, as the government cushions consumers from soaring energy bills which the OECD said could further push up inflation.

Public sector net borrowing hit £13.5 billion ($16 billion) in October, up from £9.2 billion a year earlier, the Office for National Statistics said in a statement.

It came as the Organisation for Economic Co-operation and Development forecast the UK economy would contract more than any of the world’s seven most advanced nations next year.

The organisation added that the government’s cap on energy bills could have been better targeted, placing the focus on the poorest.

“Better targeting of measures to cushion the impact of high energy prices would lower the budgetary cost, better preserve incentives to save energy, and reduce the pressure on demand at a time of high inflation,” the OECD concluded.

The organisation added that the UK economy would contract 0.4 percent next year.

This was a more positive verdict, however, compared to the UK government which predicts output to shrink 1.4 percent in 2023 in a recession it says is already underway.

– Inflation fallout –

Despite the bleak outlook, Prime Minister Rishi Sunak’s spokesman on Tuesday said that UK growth this year would be the highest of the Group of Seven countries.

The government and OECD both see UK growth of above four percent this year.

Current economic challenges “are affecting different countries at slightly different times”, the spokesman said.

“We emerged from the pandemic faster than many other countries in Europe. But some of these challenges are shared… You only have to look at inflation.”

Official data released Tuesday showed “October’s high borrowing figure largely is a consequence of the government’s decision to shield households from most of the surge in energy prices”, noted Pantheon Macro analyst Samuel Tombs.

Sunak’s Conservative government has maintained subsidies for household energy bills introduced by his predecessor Liz Truss after prices rocketed in the wake of Ukraine’s invasion by key producer Russia.

UK inflation stands at a four-decade high above 11 percent, resulting in more higher interest repayments for the government.

Data Tuesday showed that total UK debt rose in October to almost £2.46 trillion, or 97.5 percent of gross domestic product.

“It is right that the government increased borrowing to support millions of businesses and families,” finance minister Jeremy Hunt said in response to the latest release on public finances.

“But to tackle inflation and ensure the economic stability needed for long-term growth, it is vital that we put the public finances back on a more sustainable path.”

In a budget last week, Hunt hiked taxes and slashed spending to reverse Truss’s unfunded tax cuts that had sent the pound sliding and UK borrowing costs surging.

Keir Starmer, leader of Britain’s main opposition party Labour, told business leaders Tuesday that his party would “give Britain the clear economic leadership it needs” if elected in the next general election not due until 2024.

“We will inherit an economy that’s been damaged by the last 12 weeks and the last 12 years, and we need to fundamentally accept that,” he told the annual conference of the Confederation of British Industry.

The French government on Tuesday expressed shock after a tax inspector was stabbed to death as he was trying to audit the books of a business owner in the north of the country. 

The murder victim, a 43-year old civil servant for the tax authorities, was found dead on Monday, killed “most likely by repeated stabbing”, the prosecutors’ office in the northern French city of Arras said.

The suspected killer, a 46-year-old antiquities dealer, was then believed to have killed himself with a firearm, it said.

The suspect, described by the local mayor as “an ordinary guy”, locked up the tax inspector and a female colleague during a tax audit of his business, and tied them up, it said.

The Arras chief prosecutor, Sylvain Barbier Sainte-Marie, told reporters Tuesday that the presumed killer may have planned the murder well ahead of the agents’ visit.

Police had found clamps used to tie up the agents “which were probably purchased before the act”, according to the prosecutor.

“Early evidence seems to point to a premeditated act,” he said.

Budget Minister Gabriel Attal said earlier that “the republic is weeping for one of its own”, calling it “revolting” that a public servant was killed “because he did his job”.

The inspector arrived Monday afternoon at the antique dealer’s home, accompanied by a colleague, to check his accounts.

Attal said usually agents were sent on tax check missions on their own, but this time there was backup because there had been tensions during previous visits to the antique dealer’s business.

Prosecutors said the businessman tied them up and stabbed the inspector, leaving the colleague “terribly shocked” but otherwise unharmed.

A union for tax officials said the case showed that its members had a “potentially dangerous” job.

The dealer, a divorced father of two, moved four years ago to the hamlet of Bullecourt, its mayor Eric Bianchin told AFP.

He bought a farm from where he sold bric-a-brac which he picked up at auctions and yard sales around the area.

He was “an ordinary guy”, the mayor said, describing him as “helpful, and well-integrated in the village” of some 250 people.

A neighbour, Geoffrey Fournier, described the presumed killer as “discreet” and “apparently hard-working”, whose business “seemed to be doing OK”.

The French parliament observed a minute of silence in memory of the tax inspector.

On Wednesday there will be ceremonies in regional tax centres in his honour, Attal said.

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Russian energy giant Gazprom said Tuesday that Ukraine was diverting natural gas supplies transiting to Moldova and threatened to curtail deliveries through a key pipeline to Europe in response.

The allegations are the latest point of tension over energy deliveries between Kyiv, European capitals and Moscow, which has reduced consignments to Europe in response to Western sanctions over the conflict in Ukraine.

“The volume of gas supplied by Gazprom… for transit to Moldova via Ukraine is more than the physical volume transmitted at the border of Ukraine with Moldova,” Gazprom said in a statement.

The Saint Petersburg-based company said Ukraine had obstructed 52.52 million cubic metres from being delivered to Moldova and threatened cuts in response.

“If the transit imbalance through Ukraine for Moldovan consumers persists, on November 28, from 10:00, Gazprom will begin reducing gas supply” through a key transit point for deliveries to Europe, the company said.

Ukraine denied the allegations, saying that all the gas volumes bound to Moldovan consumers have been transferred “in the full amount”.

“By threatening to reduce the volumes of gas transportation to Moldova, Gazprom is trying to deprive this country of the opportunity to use the Ukrainian gas transmission system (GTS),” Ukraine GTS operator official Olga Bielkova said in a statement.

“This is not the first time Russia has resorted to using gas as an instrument of political pressure,” she said. 

“It manipulates facts to justify its decision to limit further the volume of gas supplies to European countries.”

The threats come at a precarious moment for energy security in Europe, which scrambled to fill gas storage sites ahead of winter.

Ukraine is suffering a severe energy crisis in the wake of weeks of persistent Russian strikes on its energy grid, which has also led to blackouts in neighbouring Moldova.

Chisinau’s pro-European president, Maia Sandu, has warned that her country of 2.6 million people nestled between Romania and conflict-scarred Ukraine risks running out of gas and electricity this winter.

Britain launched Tuesday an in-depth competition probe into the domination of US tech giants Apple and Google of cloud gaming and mobile internet browsers.

The Competition and Markets Authority (CMA) regulator will investigate whether consumer choice is limited by the behaviour of the Silicon Valley pair, it said in a statement after an initial study earlier this year.

Apple and Google “have an effective duopoly on mobile ecosystems that allows them to exercise a stranglehold over operating systems, app stores and web browsers on mobile devices” to the detriment of competition, it said.

An overwhelming 97 percent of all mobile internet browsing in Britain took place using Apple or Google technology in 2021, the CMA added.

The watchdog will investigate “the way that Apple and Google dominate the mobile browser market and how Apple restricts cloud gaming through its App Store”.

Many UK companies and web developers argue that the status quo is harming their businesses, holding back innovation and adding costs, the regulator said.

“Ultimately, these restrictions limit choice and may make it more difficult to bring innovative new apps to the hands of UK consumers,” it added.

“At the same time, Apple and Google have argued that restrictions are needed to protect users.”

In reaction, an Apple spokesperson said it would “engage constructively” with the CMA probe but insisted that its approach “promotes competition and choice”.

Google stressed that it was committed to “thriving, open platforms that empower consumers and help developers build successful businesses”.

King Charles III on Tuesday welcomed South African President Cyril Ramaphosa to London for a milestone first state visit of his reign.

Gun salutes were fired across London as Charles and Queen Consort Camilla were joined by heir to the throne Prince William and his wife Catherine to greet Ramaphosa for a ceremonial welcome at Horse Guards Parade.

The monarch and Ramaphosa, both dressed in dark overcoats against the November chill, inspected the guard of honour together.

The parties then travelled to Buckingham Palace in a carriage procession escorted by mounted soldiers from the Household Cavalry.

The route along The Mall was decorated with the British and South African flags with the band of the Scots Guards playing the national anthems of both countries as the king and his guest arrived at the palace.

The two-day visit sees Charles finally presiding over proceedings after decades playing a supporting role to his mother Queen Elizabeth II, who died in September.

For Ramaphosa, a protege of anti-apartheid icon Nelson Mandela, however, it comes amid political difficulties and a threat of impeachment at home.

In the last state visit of Elizabeth’s record-breaking 70-year reign, the queen hosted US president Donald Trump and his wife Melania in June 2019.

Later in the day, Ramaphosa will visit parliament for an address to both the upper and lower houses.

A tour of Westminster Abbey will include the memorial stone for Mandela, who served as president of South Africa between 1994 and 1999. 

In the evening, Ramaphosa will attend a state banquet at Buckingham Palace.

Ramaphosa is also due to visit Downing Street for talks with Prime Minister Rishi Sunak.

– ‘Turbocharge growth’ –

At the start of the visit, the UK and South Africa governments announced the launch of the next phase of the UK-South Africa Infrastructure Partnership.

“South Africa is already the UK’s biggest trading partner on the continent, and we have ambitious plans to turbocharge infrastructure investment and economic growth together,” Sunak said.

Trade with South Africa, the continent’s second biggest economy, is worth £10.7 billion ($12.7 billion) a year.

Foreign Secretary James Cleverly said the choice of Ramaphosa for Charles’s first state visit was a sign of the UK’s “enduring commitment” to Africa, even as it eyes new partners in Asia post-Brexit.

But he added: “It’s important… that we also show that it’s not going to be at the expense of the incredibly important partnerships we have through the Commonwealth, through international fora, as well as the bilateral relationship (with South Africa).”

As well as trade, climate change and Charles’s vision for the Commonwealth are also expected to be discussed during the visit.

But political problems in South Africa threaten to cast a shadow over the ceremonial pomp and splendour of the state visit.

Ramaphosa is at risk of impeachment for allegedly covering up a crime, accused of concealing a multi-million-dollar cash theft.

He faces an accusation that he failed to report a heist at his luxury cattle farmhouse in which robbers took four million dollars in cash, and instead organised for the robbers to be kidnapped and bribed into silence.

He has faced calls to resign and the deeply divided ruling African National Congress (ANC) is due to hold a vote on its leadership in December.

The president has acknowledged a burglary but denies kidnapping and bribery, saying he reported the break-in to the police. 

South African lawmakers will discuss next month the findings of a special panel tasked with establishing whether Ramaphosa should face impeachment.

World economic growth is slowing due to decades-high inflation, the OECD said Tuesday, calling for “essential” further monetary policy tightening and “more targeted” government support.

Global GDP is set to grow 3.1 percent this year — nearly half the rate for last year, the Organization for Economic Co-operation and Development said.

The slide is due to continue next year, with global growth falling to 2.2 percent before rebounding “to a relatively modest 2.7 percent in 2024”, the Paris-based organisation said.

Amid the effects of Russia’s war in Ukraine, “growth has lost momentum, high inflation is proving persistent, confidence has weakened, and uncertainty is high”, it said in its latest forecasts.

“An end to the war and a just peace for Ukraine would be the most impactful way to improve the global economic outlook,” OECD secretary general Mathias Cormann said during a press conference.

OECD chief economist Alvaro Santos Pereira said in the report that the global economy was “reeling from the largest energy crisis since the 1970s”.

The energy shock has pushed inflation up “to levels not seen for many decades” and is hitting economic growth around the world, he added.

Inflation had already been on the rise before the conflict due to bottlenecks in the global supply chain after countries emerged from Covid lockdowns.

But the OECD said that inflation was set to reach eight percent in the fourth quarter of this year in the Group of 20 top economies, falling to 5.5 percent in 2023 and 2024.

Cormann said that inflationary pressure was decreasing, but urged central banks to press on with interest rates hikes.

– ‘Top policy priority’ – 

“We do expect inflation to gradually moderate as tighter monetary policy takes effect, demand and energy price pressures diminish over time and transport costs and delivery times continue to normalise,” he told reporters.

However, he stressed there remained the possibility that “economic activity may become even weaker if energy prices rise further or if energy disruptions affect gas and electricity markets in Europe and Asia”.

Fighting inflation is a “top policy priority”, the OECD said, as soaring prices erode people’s purchasing power worldwide.

“Our central scenario is not a global recession but a significant growth slowdown for the world economy in 2023, as well as still high, albeit declining, inflation in many countries,” Santos Pereira said.

The OECD recommended tightening monetary policy in countries where price rises remained high.

It also advocated targeted support for families and firms to avoid exacerbating inflationary pressures, with energy costs “likely to remain high and volatile for some time”.

“In these difficult and uncertain times, policy has once again a crucial role to play: further tightening of monetary policy is essential to fight inflation, and fiscal policy support should become more targeted and temporary,” the OECD said.

Cormann acknowledged that government support had helped cushion the impact of high energy costs for households and businesses.

But he said support needed to be “temporary and better targeted”.

“This would allow to minimise fiscal costs, focus on the most vulnerable and preserve the incentives to reduce energy consumption and boost investment in additional supplies,” he said.

The OECD called for such aid to be better targeted notably in France and Germany.

Europe’s biggest economy is expected to grow by just 1.8 percent this year, while for France, the OECD forecasts growth of 2.6 percent.

And in Britain, after the economic havoc under short-lived ex-prime minister Liz Truss, the OECD called on her successor Rishi Sunak’s government to ensure future budgetary targets were well defined and transparent to reduce concern about debt sustainability.

The 38-member group called for an acceleration in investment in adopting and developing clean energy sources and technology to help diversify supply.

Gas and oil deliveries from major producer Russia have been severely disrupted following its invasion of Ukraine. Western allies sanctioned its energy exports and Russia slashed supplies in the stand-off over the conflict.

The upheaval has sent energy costs spiralling and fuelled decades-high inflation in major economies, leading central banks to hike interest rates in a bid to tame runaway prices.