Bankruptcy

LONDON: On Tuesday, Britain’s second-largest city effectively declared bankruptcy, ceasing all nonessential spending, as it faces equal pay claims totaling up to £760 million ($956 million). Birmingham City Council, responsible for over one million residents, issued a Section 114 notice to halt non-essential expenditures.

The deficit primarily stems from difficulties in covering equal pay claims ranging from £650 million to £760 million, creating a projected £87 million deficit for the 2023-24 fiscal year.

Sharon Thompson, the council’s deputy leader, cited longstanding equal pay liabilities and the removal of £1 billion in funding by successive Conservative governments as contributing factors.

She noted the council’s substantial financial challenges, including increased adult social care demand, reduced business rates income, and the impact of inflation. Despite these challenges, she emphasized that the city remains open for business.

A spokesperson for UK Prime Minister Rishi Sunak stated that local councils are responsible for managing their budgets, although the government has expressed concerns about governance arrangements and the use of taxpayer money.

John Cotton, the council’s leader, mentioned a new jobs model being implemented to address the equal pay claims bill.

Kerb Market Surprise: Rupee Rises In Open Market, While Interbank Records Decline

Meanwhile,

KARACHI: The central bank reported a 0.48% rupee depreciation against the dollar in the interbank market, closing at Rs307.10 for the second consecutive session.

However, in the open market, after a crackdown on illegal money changers in Peshawar, the dollar witnessed a surprising drop of up to Rs7.

Despite assurances from the interim government regarding a $70 billion investment from friendly nations, the rupee weakened in the interbank market. The currency market responded to demand and supply dynamics rather than official assurances.