New report upgrades outlook for UK economy with growth now forecast at 1.1% rather than 0.7%
The International Monetary Fund has warned the trade tariffs favoured by US presidential candidate Donald Trump could hurt global growth, as it upgraded its forecast for the UK economy.
The Washington-based organisation said tariffs trigger tit-for-tat trade wars that impoverish the economies involved in the dispute and the wider global economy.
Continue reading...Move could raise £24bn a year say signatories including Jeremy Corbyn as polls suggest public support
A cross-party group of 30 MPs has urged Rachel Reeves to impose a wealth tax on Britain’s rich in next week’s budget rather than announce spending cuts that would hit the most poor hardest.
In a letter to the chancellor, the MPs – including the former Labour leader Jeremy Corbyn and his then shadow chancellor, John McDonnell – say she could raise £24bn a year from a 2% tax on wealth above £10m and lay the foundations for a fairer, more sustainable economy.
Continue reading...Loans will be repaid using interest generated by $300bn of frozen Russian assets held in the west
Britain is to lend Ukraine an additional £2.26bn and allow Kyiv to spend the money on weapons to fight off the Russian invasion as part of a wider $50bn (£38.5bn) loan programme expected to be confirmed by G7 members later this week.
The loans will be repaid using interest generated by the $300bn of frozen Russian assets held in the west, with the extra funds promised as the US heads towards a presidential election where support for Ukraine is a divisive issue.
Continue reading...The chancellor is set to announce a revenue-raising budget designed to reset Britain’s public finances
Rachel Reeves is set to use one of the most pivotal budgets of recent times to call on businesses to pay more tax to help restore the NHS, amid warnings that the health service has been left with a £9bn hole in its finances.
The chancellor is expected to stake her reputation on a tax-raising budget designed as a reset of the public finances. She has already had to deal with cabinet skirmishes over funding unveiled alongside the statement. However, Reeves is understood to believe that the public will accept a multibillion-pound hike in business taxes if it is linked to repairing the health system’s finances.
Continue reading...Whitehall source says it would only allow NHS to ‘stand still’ on waiting lists rather than reduce them
The NHS is set to get an inflation-busting 4% rise in its budget next year but health chiefs have said it may not allow them to cut waiting lists for another 18 months, the Guardian has learned.
The health service is on course to be one of the big winners in Rachel Reeves’s spending review on 30 October if it gets a proposed 4% real-terms uplift from the Treasury.
Continue reading...Policy known as ‘fiscal drag’ could bring in as much as £7bn a year after 2028, while dragging workers into paying more tax
Rachel Reeves is expected to extend a “stealth” freeze on income tax thresholds beyond the 2028 deadline set by the previous Conservative government to raise billions of pounds in the budget.
The chancellor is contemplating the move, first reported by the Financial Times, as she seeks tax-raising measures to plug a £40bn shortfall in the public finances that Labour claims was left by the Conservatives.
Continue reading...Rachel Reeves is to seek advice from City experts to ensure big projects’ value for money and reassure markets
Rachel Reeves, the chancellor, is taking action to ensure her budget plan for a multibillion-pound increase in government borrowing to fund infrastructure projects avoids a Liz Truss-style meltdown in financial markets.
Ahead of her tax and spending event on 30 October, the chancellor is convening on Friday the first meeting of a taskforce of leading City figures to advise on infrastructure projects. The government will also launch a watchdog to oversee public works and ensure value for money for the taxpayer.
Continue reading...Group of wealthy investors argue it would have no impact on investment in the UK and would raise vital funds for public services
Rachel Reeves has been urged by a group of millionaire business owners to raise £14bn from an increase in capital gains tax at this month’s budget, arguing it would have no impact on investment in Britain.
Ahead of the chancellor’s set-piece event on 30 October, the group of wealthy investors said increasing the tax rate on asset disposals would help to raise vital funds for public services and would not lead to slower economic growth.
Continue reading...Jürgen Maier’s vision for company includes the potential to borrow its own money in order to rival multinationals
Britain’s new national energy company will eventually become a major power generator, running its own windfarms, tidal power and carbon capture schemes and potentially borrowing its own money, according to its new chair.
Jürgen Maier, the chair of Great British Energy (GBE), told the Guardian in an interview that his vision for the company far outstrips its current scope and would put it on a par with multinational firms such as Denmark’s Ørsted or Sweden’s Vattenfall.
Continue reading...Rachel Reeves aims to find £40bn in budget but several ministers have written to Keir Starmer about spending cuts
Cabinet ministers have pushed back against planned cuts to their departments in the upcoming budget, with several writing to Keir Starmer to contest them.
Several are understood to have shared their concerns at the likelihood of deep cuts to unprotected departments such as housing and transport.
Continue reading...Latest PMQs comes as sources say chancellor is briefing ministers that £40bn will need to be found in the budget
Robert Jenrick has finished his speech, and he is now taking questions.
Q: Kemi Badenoch says she is Labour’s worst nightmare. Is she right?
I think that our party faces an existential challenge right now. Our party has no divine right to exist. That’s why we need to get the choice right in this leadership election, and that’s why I stand for ending the drama, ending the excuses, and actually delivering for the British people.
Continue reading...Surprise annual drop to 1.7% in September raises chance of interest rate cuts, increasing budget leeway
Inflation in the UK has fallen to its lowest level in three and a half years, giving a pre-budget boost to Rachel Reeves as expectations grow for the Bank of England to cut interest rates.
Figures from the Office for National Statistics show the consumer prices index dropped sharply to 1.7%, down from 2.2% in August, in a bigger fall than anticipated in financial markets, driven by lower air fares and petrol prices.
Continue reading...Chancellor’s words will be interpreted as signal she will not give in to ministers over cuts she imposes in budget
Rachel Reeves has told the cabinet that the UK still faces a £100bn black hole in the public finances over the next five years amid concerns that ministers are yet to grasp the full scale of the fiscal deficit ahead.
At a meeting of the political cabinet, the chancellor said the £22bn gap this year – which the government has blamed on their poor economic inheritance from the Tories – would be a recurring cost each year of this parliament.
Continue reading...The PM has backed transport secretary Louise Haigh after she called ferry firm a ‘rogue operator’, threatening investment summit
Keir Starmer expressed his full confidence on Saturday in the transport secretary, Louise Haigh, after an explosive cabinet row cast fresh doubt over his Downing Street operation and threatened to overshadow a key international investment summit in London.
Government sources said the prime minister and Haigh had spoken and made up on Saturday after Starmer appeared to rebuke her on Friday for branding P&O Ferries a “rogue operator” in a statement and then calling for customers to boycott the company in a subsequent media interview.
Continue reading...With the budget and Starmer’s investment summit approaching, the industry’s lobbyists are in full cry over ‘carried interest’
When the future deputy prime minister Angela Rayner walked the floor of a bespoke kitchen outfitter’s warehouse in October 2022, she was doing more than gladhanding local workers in her Greater Manchester constituency.
The real reason Rayner had been invited to tour Goyt Kitchen Fabrications in Ashton-under-Lyne was not to see how the firm had fared through the Covid pandemic, but to be sold the benefits of private equity. Goyt’s bosses had taken a £200,000 investment from Welsh-government-backed FW Capital.
Continue reading...Thousands could lose up to £4,900 a year if the plan is retained in the forthcoming budget
Rachel Reeves is coming under intense pressure to use the budget to abandon a £1.3bn cut to benefits for people with disabilities, first announced by the Tory government, amid warnings it will lead to hundreds of thousands of the most vulnerable people losing almost £5,000 a year.
The leading independent thinktank, the Resolution Foundation, has called on the chancellor to drop or delay changes to the work capability assessment (WCA), arguing that key aspects of the policy have not been thought through, and that around 420,000 people who are unable to work through disability or ill-health could lose up to £4,900 a year.
Continue reading...Treasury weighing proposals as chancellor attempts to plug £22bn hole in public finances
Ministers are considering a tax raid of up to £3bn on the gambling sector as Rachel Reeves casts around for funds to shore up the public finances.
Treasury officials are understood to be weighing up proposals, put forward by two influential thinktanks and backed by one of the party’s top five individual donors, to double some of the taxes levied on online casinos and bookmakers.
Continue reading...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.
Continue reading...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.
Continue reading...In today’s newsletter: Rachel Reeves calculates that changing debt rules could help boost the UK economy, but what does it really mean?
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Good morning.
There are just three weeks to go until the biggest fiscal and political event for any government: the budget.
Middle East | Israel has said it is expanding its ground operation in Lebanon with the deployment of a fourth division after another night of intense airstrikes. The reservist 146th division was sent to southern Lebanon overnight, meaning the number of troops on the ground is now likely to number 15,000. The Lebanese health ministry said late on Tuesday 36 people have been killed and 150 have been injured in Israeli attacks over the past 24 hours.
Environment | Florida’s western coast was making emergency preparations on Tuesday for the impact of Hurricane Milton, with thousands of evacuees clogging highways, contending with fuel shortages, and the mayor of Tampa warning residents bluntly “you are going to die” if they stayed behind.
Conservatives | James Cleverly has topped the latest MPs’ vote in the Conservative leadership contest, making him the new favourite, as Tom Tugendhat became the latest candidate to be eliminated.
Poverty | More than 9 million people in the UK experience levels of poverty and hunger so extreme they are vulnerable to reliance on charity food handouts, according to research by the charity Trussell.
Society | Deaths have outstripped births in the UK for the first time in almost half a century, excluding the start of the pandemic, official figures showed.
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