Category Archives: Economic growth (GDP)

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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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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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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Rachel Reeves says higher taxes on wealthy ‘part of the story’ for November budget

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Exclusive: Chancellor hints at rises and calls out past ‘scaremongering’ over VAT on private schools and changes to non-doms

Rachel Reeves has said higher taxes on the UK’s wealthy will form part of next month’s budget, as she shrugged off the “scaremongering” and “bleating” of her critics, and stressed her determination to repair the public finances.

Speaking in Washington, where she is attending the annual meetings of the International Monetary Fund (IMF), the chancellor told the Guardian there “won’t be a return to austerity” and hinted at tax increases for the most well-off.

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Reeves to host bosses of UK and US financial firms as Trump visit begins

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Chancellor hosting Downing Street talks with Treasury secretary, which are aimed at securing more US investment

Rachel Reeves will host the bosses of top US and UK financial firms in Downing Street on Tuesday morning, as Donald Trump begins his official state visit.

The meeting, which will be jointly hosted by US Treasury secretary, Scott Bessent, will be attended by senior figures from BlackRock, Barclays and Blackstone, who will have roundtable talks with officials hoping to highlight economic cooperation between the two countries.

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Confidence drops across UK services in face of higher costs and weak demand

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CBI survey shows firms cutting hiring and investment as profits squeezed, with outlook gloomy for rest of year

Business confidence plunged this month across the UK’s services sector as mounting cost pressures and weak demand hit profits and undermined the outlook for the rest of the year.

The CBI’s latest service sector poll found that a majority of companies were gloomy about their prospects and discounted the acceleration in activity that usually follows the return to work after the summer break.

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UK unemployment rises and wage growth slows as jobs market ‘weakens’

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ONS data shows jobless rate climbing to highest rate since June 2021 with growth in average earnings slowing to 5%.

Unemployment climbed and wage growth slowed in the three months to May, according to official figures that will pressure the Bank of England to cut interest rates next month.

Data from the Office for National Statistics, released on Thursday, showed that Britain’s official unemployment rate rose to 4.7% in the three months to May, up 0.1% from April to reach the highest level since June 2021.

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UK economic growth confirmed at 0.7% in first quarter; Lincolnshire oil refinery calls in administrators – business live

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UK-US trade deal kicks in today, lowering tariffs for British carmakers and aerospace sector

UK households hit by squeeze on living standards despite fastest growth in G7

Karim Haji, global and UK head of financial services at KPMG, said:

May’s uptick in mortgage approvals bucks the downward trend we’ve seen throughout the year so far. The gradual easing of interest rates could be helping to boost confidence and demand amongst mortgage borrowers.

The cost of living remains high, but a drop in consumer borrowing in May signals that rising incomes are starting to feed through to the cost of day-to-day expenses.

It is incredibly positive news to see an increased number of mortgage applications approved. It is one of the loudest signals of them all regarding consumer affordability, and it is also a massive vote of confidence from lenders in the longer-term prospects of the economy too.

As we head into the summer months, we have witnessed on average the number of viewings per property available see an uplift of around 30% compared to the month previous. On top of this, we have also seen the UK Government make a pledge to create a National Housing Bank which could bring significant investment to help build 500,000 new homes, enabling a potential greater degree of flexibility for those who aspire to buy.

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Reeves hopes hat-trick of deals shows Britain is open for business

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Impact of agreements on food, energy and defence may not be huge but chancellor believes it will draw investors to UK

Rachel Reeves joked to journalists after Monday’s EU-UK reset that trade deals were coming along “like buses”, given the agreements with India and the US that had also been sealed in the past fortnight alone.

The chancellor described the EU deal as the best that had been secured by any non-member country, but she was also keen to talk about the three successful negotiations as a package.

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Giving weight loss jabs could bolster UK economy by £4.5bn a year, study says

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Providing semaglutide for all those eligible may bring productivity gains as people are able to work more

Giving weight loss jabs to everyone eligible for them could boost the UK economy by £4.5bn, according to research.

Worldwide, about 3.8 billion people over 25 and just under 750 million children and young people are forecast to be overweight or obese by 2050. In England, 26.5% of adults are obese, while across the UK 4.6 million are diagnosed with type 2 diabetes.

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UK interest rates fall to 4.25% as Bank of England announces a quarter-point cut

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Move follows run of downbeat economic data and looks to cushion UK from Trump’s trade war fallout

Bank of England policymakers have cut interest rates by a quarter point to 4.25% to cushion the UK economy against the impact of Donald Trump’s trade war.

The widely expected move from the Bank’s monetary policy committee (MPC), its fourth cut since last August, should lead to cheaper mortgages for homeowners.

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Trump tariffs cause fastest slump in British factory export orders in five years

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Decline in output and new orders in April allied with rising uncertainty is prompting layoffs, survey finds

Britain’s factories suffered a slump in export orders last month as Donald Trump’s globally unsettling tariff regime sent overseas demand for UK goods tumbling at the fastest pace in five years.

Manufacturers reported rising economic and trade uncertainties in April as some tariffs took effect and other threatened border taxes loomed, forcing them to lay off workers for a sixth consecutive month.

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GDP growth an ‘encouraging sign but we are not complacent’, says Reeves – UK politics live

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Chancellor says government ‘will remain pragmatic and cool-headed’ while seeking US trade deal

The care minister has defended the government’s cautious response to developments in global trade after the sweeping imposition of tariffs by the US administration in Washington.

Stephen Kinnock said “If we were to just jump in one direction or the other every time there’s a new development, we would be jumping around all over the place. I don’t think that that’s going to be in the interest of our economy or of our national security or of our business community.”

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UK economy far exceeds forecasts to grow 0.5% in boost to Rachel Reeves

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February GDP rise was bigger than forecast – but impact from Donald Trump’s tariff war is yet to come

The UK economy unexpectedly expanded by 0.5% in February, figures show, in a boost for the chancellor, Rachel Reeves, before an expected downturn sparked by Donald Trump’s tariff war.

The increase in gross domestic product in February was five times larger than the 0.1% that a poll of City economists had forecast, while January’s figure of a modest fall of 0.1% was revised up to 0.0% growth.

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Trump tariffs likely to drag down weak UK growth, Bank policymaker warns

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Sarah Breedon says too early to judge impact on inflation of ‘most significant change in trade policy in a century’

UK economic growth will be hit by US tariffs, which are the biggest trade policy change in a century, a senior Bank of England official has warned.

Sarah Breeden, the Bank’s deputy governor for financial stability, said on Thursday that business activity was likely to be adversely affected by Donald Trump’s tariff regime, dragging down the UK’s already weak growth rate.

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Government will step in to support key industries amid tariff turmoil, says Starmer

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Carmakers will be given more flexibility over targets on transitioning to electric vehicles

Keir Starmer has said the government will step in to support key British industries, as business grapples with the economic turmoil unleashed by Donald Trump’s global tariffs.

As the government attempts to counter the impact of the White House hitting the UK with a 10% base levy on exports to the US, the prime minister will promise to help shelter vulnerable sectors and will implement key parts of the industrial strategy months early.

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250,000 more people will face relative poverty after Rachel Reeves’ benefits cuts, DWP says – spring statement live

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Department for Work and Pensions says thousands, including children, will be hit by chancellor’s announcement, as OBR forecasts UK growth to halve in 2025

Rachel Reeves will not be raising taxes in the spring statement today, even though there are many people on the left who would prefer taxes to rise as an alternative to public spending being cut. Reeves came into office promising only one budget-type event a year, and that is one reason why she is not hiking taxes today. But mainly it’s because she thinks Britons are relatively highly taxed already, because Labour was elected on a manifesto ruling out most of the obvious possible tax rises and because she’s not convinced a sweeping wealth tax would work.

But that has not stopped campaigners calling for a wealth tax, and yesterday about 300 people attended a ‘Tax the Super-Rich’ rally outside the Treasury. It was organised by charities and social justice campaign groups, but one of the speakers was Carla Denyer, co-leader of the Green party, which is in favour of a wealth tax.

Across the country, inequality is soaring and people are being left behind, struggling to make ends meet and dealing with broken public services, all while the very richest get richer. Choosing to make cut after cut to the poorest and most marginalised, while leaving the vast resource of the extreme wealth of the super rich untouched, is immoral, harmful, and will not deliver for our communities or the economy.

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Bank of England in no hurry on interest rates – but cuts will come

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Despite the decision to hold at 4.5%, businesses and households can take a confident view of the UK’s prospects

Bank of England policymakers might be on a “go-slow” as they look forward to interest rate cuts this year, but the direction of travel is almost certain.

After a meeting on Thursday when interest rates were kept on hold at 4.5%, City investors bet there would be more reductions in the cost of borrowing this year, most likely two cuts reducing the rate to 4%.

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Shrinking economy offers unhelpful backdrop for Rachel Reeves’s growth push

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GDP goes in wrong direction as chancellor puts final touches to fiscal plans

For a government that has made growth its overriding mission, the 0.1% decline in GDP in January signalled by the Office for National Statistics will be depressing news.

As Rachel Reeves prepares to announce her spring statement on 26 March, the economy appears to be going in the wrong direction – underlining the fact that the Office for Budget Responsibility is likely to have presented her with notably weaker forecasts than in October.

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UK economy shrinks unexpectedly in blow to Rachel Reeves

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ONS data showing 0.1% fall in GDP in January comes less than two weeks before chancellor’s spring statement

The UK economy contracted by 0.1% in January, dealing a blow to Rachel Reeves before the spring statement later this month.

In a surprise to City economists, who expected 0.1% growth in January, the Office for National Statistics data showed the services sector failed to offset a decline in the industrial sector and maintain growth from the previous month.

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