Category Archives: Economics

Oil price continues to rise amid Middle East crisis but stock markets rebound across Asia

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Reports of attack on US registered tanker in Gulf lifts crude by 3% to $84 a barrel as gas price also starts to climb

Stock markets have rebounded in Asia after days of heavy losses driven by the war in the Middle East, but oil and gas prices have continued to climb amid disruption to supplies.

South Korea’s KOSPI, which posted its biggest ever fall on Tuesday of 12%, rose by almost 10% on Thursday, while Japan’s Nikkei climbed by 1.9%. MSCI’s Asia-Pacific index excluding Japan jumped by 2.7%.

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European Commission proposes ‘Buy EU’ plan to compete against China

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Plan, which aims to preserve jobs in clean tech and low carbon sectors, could include UK if there is reciprocal market access

The European Commission has proposed a “Buy EU” plan to boost domestic low-carbon industries and help the continent compete against China.

The commission published a draft regulation – called the Industrial Accelerator Act – on Wednesday, setting demands for EU-made and low-carbon content on bodies spending public money. The rules mark a major shift in economic thinking from Brussels, long a bastion of open markets.

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Maritime insurers cancel war risk cover in Gulf as Iran conflict disrupts shipping

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Strait of Hormuz is effectively closed and vessels rerouted, sending some freight costs surging

Leading maritime insurers have cancelled war risk cover for vessels operating in the Gulf as the escalating Iran conflict disrupted shipping and sent some freight costs surging.

At least 150 vessels including oil and liquefied natural gas tankers have dropped anchor in the strait of Hormuz and surrounding waters, and at least three tankers were damaged and one seafarer killed over the weekend.

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UK house prices rise in February as chancellor avoids ‘negative speculation’

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Rachel Reeves’ upcoming spring forecast has not led to slowdown, as property tax rumours did in November

House prices in the UK increased in February as Rachel Reeves avoided a repeat of the pre-budget “negative speculation” that depressed the market, as she prepares to present the spring forecast on Tuesday.

The average price of a home rose to £273,176 last month, up by 0.3% from the month before, Nationwide said. It matched January’s monthly increase, and was above analysts’ forecasts of a 0.2% gain. The annual growth rate remained steady at 1%, the country’s biggest building society said.

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Most senior council officers in England say building work hit by delays

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Funding uncertainty is main concern, despite Labour’s pledge to revitalise construction, survey shows

Almost two-thirds of senior council officers have said they are seeing construction projects delayed, despite the key role of local authorities in creating the wave of new housing and infrastructure promised by Labour.

Before Rachel Reeves’s spring forecast on Tuesday, a survey of senior council officers showed that 40% do not think the local authority they work for is well placed to follow through on its construction plans.

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OBR a backseat driver with out-of-date maps, thinktanks tell Rachel Reeves

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Chancellor urged to reform Office for Budget Responsibility to open way to more public investment

Rachel Reeves must reform the Office for Budget Responsibility (OBR) to open the way to more public investment, an alliance of thinktanks has argued ahead of the chancellor’s spring forecast on Tuesday.

With Keir Starmer’s government under intense pressure after Labour’s defeat by the Greens in Thursday’s Gorton and Denton byelection, the thinktanks called on Reeves to review the watchdog’s remit.

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Trump raises tariffs to 15% on imports from all countries

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President announced increase from 10% using different authority from mechanism that supreme court struck down on Friday

Donald Trump announced on Saturday that he would raise a temporary tariff rate on US imports from all countries from 10% to 15%, less than 24 hours after the US supreme court ruled against the legality of his flagship trade policy.

Infuriated by the high court’s ruling on Friday that he had exceeded his authority and should have got congressional approval for the tariffs he introduced last year under the International Emergency Economic Powers Act (IEEPA), the US president railed against the justices who struck down his use of tariffs – calling them a “disgrace to the nation” – and ordered an immediate 10% tariff on all imports, in addition to any existing levies, under a separate law.

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Don’t be fooled by recent good news, the UK economy is still in a precarious state

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Labour MPs may clamour for bolder spending, but – like their Tory and Reform counterparts – they ask for the unaffordable

Too many Labour MPs want it all, and no amount of pleading from the top of government about the depleted public finances seems to make a difference.

The mainly leftist MPs want all the wrongs of the last 15 years put right and quickly. Their next opportunity to demand more cash arrives when Rachel Reeves delivers her spring statement on 3 March.

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Retailers in UK plan to cut staff hours and jobs amid rising employment costs

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BRC survey finds finance bosses expect technology to improve productivity, with 69% pessimistic about the economy

UK retailers are planning to cut staff hours and jobs amid rising employment costs and pessimism about the economy.

Almost two-thirds (61%) of finance bosses at retail companies said they planned to reduce working hours or cut overtime, according to the latest survey from the British Retail Consortium (BRC), the trade body that represents most big retailers. More than half (55%) said they would cut head office jobs and 42% said they would reduce jobs in stores.

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OBR says its inadvertent release of budget report is ‘worst failure’ in its 15-year history – UK politics live

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Office for Budget Responsibility says Rachel Reeves ‘had every right to expect that the [report] would not be publicly available until she sat down at the end of her budget speech’

Q: Yesterday you said Rachel Reeves was lying. Today you are saying she gave out false information. Are you still accusing her of being a liar?

Badenoch replies: “Yes.”

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OBR says inadvertent budget leak is ‘worst failure’ in its 15-year history

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Investigation finds organisation’s leadership over many years was to blame for error, and similar breach happened earlier this year

Britain’s budget watchdog has said the early leak of its budget documents before Rachel Reeves made her speech was the “worst failure” in its 15-year history as it emerged a similar breach had occurred earlier this year.

The Office for Budget Responsibility (OBR) said an investigation had found that the leadership of the organisation, over many years, was to blame for the early release of its Economic and Fiscal Outlook (EFO) document online nearly an hour before Reeves’s address last Wednesday.

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People deriving income solely from state pension won’t be taxed, says chancellor

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Clarification creates prospect of two-tier system for retirees solely on new state pension and those on private schemes

People who rely only on their state pension for their income will not have to pay tax on it, the chancellor, Rachel Reeves, has said, creating the prospect of a two-tier system for those in retirement.

The new state pension is poised to rise to £241.30 a week next April, putting the annual income for someone receiving the standard payment at £12,547 – just below the personal tax allowance of £12,570 a year.

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Starmer says budget did not break manifesto tax pledge – as it happened

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PM says: ‘We kept to our manifesto in terms of what we’ve promised. But I accept the challenge that we’ve asked everybody to contribute’

The Conservative party is attacking the budget on the grounds that Rachel Reeves is putting up taxes supposedly to fund more spending on benefit claimants. Even though the rationale for this claim is questionable, the Tories were making it before the budget was announced, and Kemi Badenoch firmed it up last night, claiming it was a “Benefits Street budget”.

On LBC this morning, asked if the budget meant “alarm clock Britain paying for Benefits Street”, Reeves said she did not accept that. She said 60% of the families that would benefit from the removal of the two-child benefit cap (the most expensive welfare announcement in the budget) were in work.

I don’t think children should be punished by this pernicious policy any longer. And the cost to society of this is huge, the cost for councils of temporary accommodation, when people can no longer afford the rent, putting families in B&Bs, kids having to move to school all the time because parents have moved from B&B to another lot of temporary accommodation, and there’s costs for years to come, because all the evidence shows that kids that are growing up poor are less likely to get into work and more reliant on the welfare state in the future for them.

So this is a good investment in those kids, to give them the chances that I want for my kids, and everyone wants for their kids. It also saves money for taxpayers on that accommodation, on those additional health costs, and ensuring that those kids grow up to be productive adults.

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Rachel Reeves targets UK’s wealthiest in £26bn tax-raising budget

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Chancellor axes two-child benefit cap and cuts energy bills paid for by mansion tax and freezing tax thresholds

Rachel Reeves targeted Britain’s wealthiest households with a £26bn tax-raising budget to fund scrapping the two-child benefit policy and cutting energy bills.

On a chaotic day that involved key details of her budget accidentally being released early by the Office for Budget Responsibility (OBR), the chancellor defended the measures, saying she was “asking everyone to make a contribution to repair the public finances”, but that she wanted the wealthiest to pay the most.

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How Rachel Reeves’s budget was leaked 40 minutes early

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By the time the chancellor reached the dispatch box, the OBR had accidentally published its verdict in full online

Shortly before midday on Wednesday, a series of headlines about Rachel Reeves’s budget began appearing on the Reuters newswire, sending instant ripples though financial markets.

The details were jaw-dropping: they appeared to spell out the key policies of the chancellor’s budget more than 40 minutes before she was due to deliver them to a crowded Commons chamber.

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How Rachel Reeves’s budget was leaked 40 minutes early

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By the time the chancellor reached the dispatch box, the OBR had accidentally published its verdict in full online

Shortly before midday on Wednesday, a series of headlines about Rachel Reeves’s budget began appearing on the Reuters newswire, sending instant ripples though financial markets.

The details were jaw-dropping: they appeared to spell out the key policies of the chancellor’s budget more than 40 minutes before she was due to deliver them to a crowded Commons chamber.

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Mayors in England to get power to impose tourism tax on overnight visitors at ‘modest’ rate – UK politics live

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Government announces overnight levy ahead of tomorrow’s budget

John McFall is standing down early as Lord Speaker in the House of Lords so that he can care for his wife, Joan, who has was Parkinson’s. According to Sam Blewett and Bethany Dawson in their London Playbook briefing for Politico, the main candidates to replace him are Michael Forsyth, a rightwing Scottish secretary in the final two years of the John Major government, and Deborah Bull, a crossbencher and former Royal Opera House creative director. They reports:

Labour isn’t expected to put forward a candidate as McFall’s previous political affiliation means it’s seen as another party’s turn to rule the roost, Noah [Keate] writes in to say. Forsyth has garnered support from some Labour grandees who like his traditional approach and aversion to modernization while Bull has being promoted by some female peers keen for a woman to take charge. One Tory peer described Forsyth as a “political animal” who may struggle to encourage a consensus across the chamber. A list of candidates’ register of interests and election addresses (up to 300 words) will be emailed to all peers on Dec. 1. Watch your inboxes!

Transport secretary Heidi Alexander rejected a rival proposal from Arora Group, saying Heathrow’s own plans were “the most credible and deliverable option”.

The Heathrow proposals involve building a 3,500-metre runway and require a new M25 tunnel and bridges to be built 130 metres west of the existing motorway.

Following a comparative assessment of the remaining proposals for Heathrow expansion, the government’s view is that the Northwest runway scheme brought forward by Heathrow Airport Limited offers the most credible and deliverable option, principally due to the relative maturity of its proposal, the comparative level of confidence in the feasibility and resilience of its surface access plans, and the stronger comfort it provides in relation to the efficient, resilient and sustainable operations of the airport over the long-term.

The HAL scheme is considered comparatively more mature in its approach to road infrastructure. While the HAL scheme requires major works to the M25, assessment indicates that the HWL scheme would also have a considerable impact on the M25.

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Europe’s economy is geared towards a disappearing world, says ECB’s Lagarde

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Central bank chief warns that the bloc’s dependence on third countries for trade and security has left it vulnerable

Europe’s economy is “geared towards a world that is gradually disappearing”, according to a warning from Christine Lagarde that the EU needs reforms to spur growth.

The president of the European Central Bank (ECB) said the EU’s dependence on international trade had left it vulnerable, as major partners had turned away from the trade that made the bloc’s exporters wealthy.

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UK government borrows more than expected in setback before budget

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October figures represent final snapshot of public finances before Rachel Reeves’s tax and spending statement

Rachel Reeves was urged to use next week’s budget to create significantly more headroom against her fiscal rules, after official figures showed the UK government borrowed almost £10bn more than forecast in the year to October.

In the final snapshot of the public finances before the chancellor’s crunch budget, the Office for National Statistics (ONS) said borrowing – the difference between public spending and income – was £17.4bn last month.

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Treasury won’t cut threshold for higher rate income tax, say sources – UK politics live

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Fallout continues over budget income tax U-turn, with Treasury saying expected fiscal gap has dropped to £20bn

This is from Helen Miller, director of the Institute for Fiscal Studies thinktank, on the market reaction to the chancellor’s reported budget U-turn.

Investors will have 2 broad concerns about news that Chancellor won’t increase income tax rates

1. Does it signal less willingness to do politically difficult things

Britain’s long-term borrowing costs were sent soaring as reports suggested the latest U-turn would leave Rachel Reeves scrambling to fill a gaping black hole in the nation’s finances just two weeks before the 26 November budget.

Yields on 30-year UK government bonds, also known as gilts, jumped as much as 14 basis points in early trading, and the yield on 10-year gilts also shot up 12 basis points – rising the most since July.

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