Category Archives: Government borrowing

Negative stereotypes in international media cost Africa £3.2bn a year – report

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Focus on conflict, corruption and poverty heightens perception of risk, raising interest on sovereign debt, authors say

Africa loses up to £3.2bn yearly in inflated interest payments on sovereign debt due to persistent negative stereotypes that dominate international media coverage of the continent, according to a new report.

Research by consultants Africa Practice and the advocacy non-profit Africa No Filter suggests that media portrayals, especially during elections when global coverage is heightened, focus disproportionately on conflict, corruption, poverty, disease and poor leadership, widening disparities between perceived and actual risks of investing in the continent, and creating a monolithic view of Africa.

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Shares in UK gambling firms fall £3bn amid talk of higher taxes in budget

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Thinktank reports saying sector should be hit with extra £900m to £3bn in levies prompts market selloff

Shares in British gambling companies have dropped sharply, reducing the stock market value of large operators by more than £3bn, after the Guardian reported that Treasury officials could tap the sector for between £900m and £3bn in extra taxes.

The chancellor, Rachel Reeves, has come under pressure from two influential thinktanks to raise taxes on the industry, as she pulls every available lever to plug a £22bn “black hole” in the nation’s finances.

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Will Rachel Reeves’s rules on debt and spending survive the budget?

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The chancellor desperately needs more money to finance growth and public spending so expect a bit of tweaking to supposedly strict constraints

Change*. If Labour’s one-word campaign slogan had an asterisk, it would have directed voters to Rachel Reeves’s budget.

Later this month the chancellor will attempt to walk the line between repairing Britain’s battered public realm, while sticking to a manifesto promise to balance the books without raising taxes on working people.

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Labour needs £25bn a year in tax rises to rebuild public services, warns IFS

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Thinktank says tax increases in budget will be necessary even if Rachel Reeves changes fiscal rules

Keir Starmer’s promise to end austerity and rebuild public services will require tax increases of £25bn a year in the coming budget even if debt rules are changed to provide scope for extra investment spending, a leading thinktank has said.

In its preview of the first Labour budget in 14 years, the Institute for Fiscal Studies said Rachel Reeves would need to raise taxes to fresh record levels to meet the government’s policy goals. The chancellor was also warned of the risk of a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing.

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Labour ‘promoting age-old message of fear and hostility’ over migrants, says charity – UK politics live

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Amnesty International UK says Labour is ‘reheating’ the previous government’s rhetoric as Yvette Cooper vows to increase removals

Clean water campaigner Feargal Sharkey has written an opinion piece for the Guardian about the ways in which privatised water firms have polluted English rivers and beaches with sewage, causing significant damage to public health.

You can read it in full here:

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How bad are Britain’s finances? Five questions on the state of the UK economy | Phillip Inman

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Several factors restrict the Labour government’s room for manoeuvre in its agenda for growth

The economic outlook is improving, but a recovery from last year’s recession will be long and arduous without a boost to public investment.

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NHS spending rise lags behind Tory funding pledges, IFS finds

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Thinktank says extra funding eaten up by higher inflation despite greater demand with service in poor state of repair

Spending on the NHS in England has risen less quickly than the Conservatives promised at the last election despite the extra demand created by the pandemic and record waiting lists, a leading thinktank has said.

The Institute for Fiscal Studies (IFS) said increases in funding from the government had been eaten up by higher than expected inflation and, as a result, NHS day-to-day spending had grown by 2.7% a year during the current parliament – below the 3.3% pledged by Boris Johnson in 2019.

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Thames Water collapse could trigger Truss-style borrowing crisis, Whitehall officials fear

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Exclusive: Concerns over effect on UK’s finances lead officials to believe utility should be renationalised before general election

Senior Whitehall officials fear Thames Water’s financial collapse could trigger a rise in government borrowing costs not seen since the chaos of the Liz Truss mini-budget, the Guardian can reveal.

Such is their concern about the impact on wider borrowing costs for the UK, even beyond utilities and infrastructure, that they believe Thames should be renationalised before the general election.

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UK government borrowing higher than expected in February

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Borrowing of £8.4bn last month could threaten OBR forecast for £114.1bn deficit for 2023-24 as a whole

Jeremy Hunt has been handed disappointing news from the public finances after government borrowing was higher than expected in February, leaving the national debt at the highest levels since the 1960s.

The Office for National Statistics said public sector net borrowing was £8.4bn in February, £3.4bn less than in the same month a year ago. However, it was higher than any economist expected in a Reuters poll that predicted a deficit of £6bn.

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Budget 2024: Jeremy Hunt announces 2p cut in national insurance

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Chancellor also scraps ‘non-dom’ tax breaks and slashes capital gains on property in pre-election gambit

Jeremy Hunt has announced a 2p national insurance cut in his budget as a pre-election gambit to revive flatlining opinion poll ratings and reboot Britain’s economy from recession.

In what could be the last major economic intervention before voters go to the polls, the chancellor said the government was making progress on its economic priorities and could now help hard-pressed families by permanently lowering certain taxes.

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Cash-strapped London council starts crowdfunding drive to pay for green upgrades

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Southwark asks residents to invest as little as £5 to help fund eco-projects such as cycle hangars and school upgrades

Deep cuts to government funding have led a council in south London to ask its residents to invest their own money, for a financial return, to build cycle hangars, new LED street lighting and green upgrades at schools and leisure centres.

In the midst of a financial crisis hitting town halls across England, councillors in Southwark have resorted to a crowdfunding scheme to raise £6m over the next six years to help fund climate-friendly projects.

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Jeremy Hunt fuels election speculation as 6 March spring budget announced

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Chancellor has asked the OBR to prepare forecasts for the economy and public finances to be presented to parliament

Jeremy Hunt has announced that a spring budget expected to feature a host of tax cuts will be held on 6 March, fuelling speculation over an early general election.

While government sources insisted nothing should be read into the date, it is the earliest the set-piece fiscal event has been held in 13 years of Conservative government – apart from 2021 when the Treasury was trying to kickstart the economy after Covid.

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How a spring UK budget could fire the starting gun for an early election

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UK economic prospects are bleak but an agenda-setting fiscal event such as sweeping tax cuts in March offers another roll of the dice

To grasp the nettle, or wait in the hope that things somehow miraculously improve. This is the choice Rishi Sunak will be weighing for the next general election, as the Conservatives limp towards the finishing line of another challenging year.

After Jeremy Hunt announced the government would hold an earlier than anticipated budget, with a date set for 6 March, the possibility of a poll in May, in the afterglow of some electioneering tax cuts, is clearly being given considerable thought.

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James Cleverly tells MPs crackdown will cut annual immigration numbers by about 300,000 – as it happened

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Home secretary to announce big hike in salary requirement for migrants to the UK as Rishi Sunak tries to cut net migration figures

Hunt says the government wants to speed up the time it takes to get a connection to the national grid by 90%.

Zanny Minton Beddoes, the editor of the Economist, is interviewing Hunt. She says he has mentioned the 110 policies, but she wants to know what the growth strategy is.

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Autumn statement live: Jeremy Hunt cuts national insurance as OBR downgrades UK growth forecast

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Chancellor cuts employee national insurance to 10% while abolishing class 2 national insurance

Keir Starmer has said that a pause in hostilities between Israel and Hamas must be used to tackle the “urgent and unacceptable humanitarian catastrophe” in Gaza.

Welcoming the deal, which is expected to involve the release of 50 hostages being held by Hamas and a number of women and teenagers from Israeli jails, the Labour leader said his party had been calling for “a substantial humanitarian pause”. He said:

There must be immediate access to aid, food, water, fuel and medicine to ensure hospitals function and lives are saved. Aid and fuel need to not just get in but be distributed widely and safely.

We must also use the space this pause creates to take more steps on a path towards a full cessation of hostilities rather than an escalation of violence.

The real function of the projected spending squeeze is as a trap for Labour. If the opposition rejects the Tory trajectory, it will be accused of planning a profligate spree with public money. And if it pledges adherence to impossible targets, it will enter government with its hands bound too tight to deliver prompt satisfaction to the people who voted for it.

Keir Starmer and Rachel Reeves have so far operated a sensible policy of not walking into traps of this kind. That approach restored swing voters’ trust in Labour as stewards of the economy. But it tests the patience of an activist base that sees reversal of austerity as a moral imperative and can smell the incipient disappointment in promises of fiscal discipline.

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OBR halves UK growth forecast and warns inflation will exceed 2% target until 2025

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Despite £27bn windfall for the autumn statement, government forecaster warns of generally more difficult outlook until 2028

The government’s official forecaster has slashed its predictions for economic growth over the next two years, and warned that inflation could take until 2025 to come back to the official 2% target.

In an updated financial health check to accompany the autumn statement, the Office for Budget Responsibility (OBR) said a more resilient economy this year had handed the chancellor a £27bn budget windfall, but it warned of a more difficult outlook up to 2028 than previously forecast at the time of the budget in March.

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Autumn statement: Jeremy Hunt looks to cut UK taxes and ‘turbo-charge growth’

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Amid less gloomy OBR forecasts the chancellor is expected to take first steps towards cutting personal taxes

Jeremy Hunt will announce 110 measures to boost Britain’s stagnant economy and bow to demands from anxious Tory MPs for tax cuts when he delivers his second autumn statement on Wednesday.

In one of the last set-piece economic events before the general election, the chancellor will pledge to “turbo charge” growth while taking the first steps to cut personal taxes after recent sharp increases.

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Labour motion to ban Truss-style budget meltdowns puts pressure on Tory MPs

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Party loyalty would force Conservatives to vote against plan for fiscal responsibility

Read more: ‘I challenge Rishi Sunak: vote with Labour to stop a Truss-style disaster happening again,’ writes Rachel Reeves

Labour will force a Commons vote this week aimed at creating new legal safeguards against fiscal disasters such as Liz Truss’s catastrophic mini-budget, which sent the financial markets into meltdown and drove up mortgage rates.

The party’s plan for a “fiscal lock” to protect personal, family and the national finances from reckless politicians will be contained in an amendment to the king’s speech that will be voted on by MPs on Tuesday. The manoeuvre will present Conservative backbenchers with a dilemma over whether to back a Labour amendment, or vote against what is a plan designed to embed fiscal responsibility into the budgetary process, and protect it from wild or accidental political misjudgments.

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Hunt urged to invest £30bn a year in infrastructure or risk ‘decade in doldrums’

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Thinktank says stronger than expected tax revenues have given chancellor scope for bold package in autumn statement

Jeremy Hunt risks condemning Britain to a decade in the doldrums unless he uses this month’s autumn statement to announce a £30bn-a-year investment plan to upgrade public infrastructure, a leading thinktank has warned.

The National Institute for Economic and Social Research (NIESR) said the chancellor should ignore calls by Tory MPs for pre-election tax cuts and instead focus on measures to boost growth through improvements to transport, digital networks, skills and housing.

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Bond market sell-off sends UK long-term borrowing cost to 25-year high

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Rate tops level last seen after Liz Truss mini-budget as fears of global inflation and US political instability spook markets

Britain’s long-term cost of borrowing has hit its highest level since 1998, as political instability in the US and fears of sustained high levels of inflation triggered a sell-off in global bond markets.

The yield, or interest rate, on 30-year UK government bonds hit 5.115% early on Wednesday, according to the financial data provider Refinitiv.

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