Jitters over the UK's autumn budget grow as chancellor Rachel Reeves abandons plans to raise income tax on 26 NovemberThe pound is now trading down just 0.24% versus the dollar at around 1.3159.The 10-year gilt yield is now up 0.06 percentage points at 4.49%Chancellor of the Exchequer Rachel Reeves has been able to drop plans to raise income taxes because she received an improved fiscal forecast from the UK's budget watchdog, people familiar with the matter said.The latest update from the Office for Budget Responsibility moved in a significantly more favorable direction due to the strength of government receipts and stronger wage performance, the people said, asking not to be named discussing sensitive matters. Continue reading...
John Furner, the retail chain's boss in the US, will succeed McMillion as global CEO after 31 JanuaryWalmart's CEO, Doug McMillon, will retire next year after more than a decade in charge of one of the world's largest retailers.John Furner, the chain's boss in the US, will succeed McMillion as the Bentonville, Arkansas-based grocery retailer's global CEO after 31 January. Continue reading...
New economic data shows fall in UK exports to the US, as Britain's economy shrinks slightly in SeptemberChancellor Rachel Reeves is harking back to the happier days of stronger growth in the first two quarters of this year.Responding to this morning's GDP figures, Reeves says:We had the fastest-growing economy in the G7 in the first half of the year, but there's more to do to build an economy that works for working people.At my Budget later this month, I will take the fair decisions to build a strong economy that helps us to continue to cut waiting lists, cut the national debt and cut the cost of living." Continue reading...
Announcement by first minister John Swinney comes after Moody's and S&P give country same credit rating as UKThe Scottish first minister John Swinney has said Edinburgh is on track to issue its own government bonds, nicknamed kilts", after the country was given the same credit rating as the UK.Two ratings agencies Moody's and S&P Global gave Scotland a score of Aa3 and AA respectively, echoing their judgment for the UK as a whole. Continue reading...
Sale of index-linked debt sees record demand, while UK bond yields are only marginally higher on the back of political chaos'Southern Water is looking to tap the bond markets for hundreds of millions of pounds, just days after apologising for the catastrophic spill of plastic biobeads that polluted the Sussex coastline.Bloomberg reports that Southern Water is looking to sell as much as 600m of bonds today.The firm is sounding out investors for five-year and eight-year sterling denominated notes, both with a spread of around 230 basis points over gilts at initial price thoughts, according to a person familiar with the matter.At the same time, the company announced a tender offer for 350 million of Sub-Class A4 notes that mature in March 2026 at a purchase price of 100.5. It will conclude on November 19, according to a statement. Continue reading...
Experts say Brussels must stand up against Beijing using supplies of vital chips and minerals as sword of Damocles'As interventions go it was pretty audacious. The Dutch government decision at the end of September to take over Nexperia, a Chinese-owned chip factory, almost brought the entire European car industry to a halt.Tensions between Europe and China de-escalated over the weekend as Beijing confirmed it would ease restrictions on automotive chip supplies to the EU, prompting sighs of relief in car factories around the world. Continue reading...
Industry body says shoppers are waiting for discount day, as Barclays reports falling consumer confidenceRetailers suffered the slowest sales growth since May last month as shoppers were cautious in the run-up to expected budget tax rises and held out for Black Friday discounts.Sales rose 1.6% in October, a step down from 2.3% the month before, according to the latest figures from the British Retail Consortium (BRC) trade body and the advisory group KPMG. Continue reading...
ITV says it is in preliminary discussions regarding a possible sale of its M&E business to Sky for an enterprise value of 1.6bn.Despite pre-budget uncertainty, UK house prices jumped by 0.6% last month according to new data from lender Halifax.Halifax reported that the value of the average UK home increasing by almost 1,650 last month to 299,862 - the highest on record. This also lifted the annual rate of hous inflation to 1.9%, from 1.3% in September.Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market, with the number of new mortgages being approved recently hitting its highest level so far this year.There is no doubt that affordability remains a challenge for many. Average fixed mortgage rates are currently around 4% and likely to ease down further, but with property prices at record levels, moving home can feel like a stretch.A split of ITV's operations is one of a number of options that the broadcaster's management, led by chief executive Carolyn McCall, has looked at as part of efforts to boost the value of the company.McCall's team believes ITV is undervalued on the stock market.Doubling down on UK broadcasting would mark a gutsy bet by Comcast, which has written down the value of Sky by billions of dollars since acquiring it for $39 billion in 2018. The US company agreed in June to sell its German business Sky Deutschland for an upfront price of 150 million ($173 million), a fraction of its valuation in previous years, showing how much the market for European broadcasters has deteriorated.Comcast's deliberations are ongoing and may not lead to a transaction, the people said, asking not to be identified because the information is private.Media analyst Ian Whittaker told the BBC that a combination of Sky and ITV would mean that had 70% plus" of the UK TV advertising market, which he said in normal circumstances" would be rejected by regulators because of the dominance it would give them.But he added that with questions hanging over the future of TV, a takeover could be seen as almost a rescue deal. Continue reading...
S&P 500 down 1.1% and Nasdaq down 1.9% as hiring freezes and layoffs sharpen fears US economy is slowingFears that the US economy is slowing, with firms shedding jobs and imposing hiring freezes, sent Wall Street tumbling on Thursday.The S&P 500 index of leading firms was down 1.1% as investors also highlighted concerns about the potential for a slump in the value of businesses that have benefited from huge investments in artificial intelligence. The tech-heavy Nasdaq Composite fell 1.9%. Continue reading...
Economists predict UK rate cuts in December, after narrow vote to hold Bank Rate at 4% todayThe pound is trading near a seven-month low this morning, as the City awaits the Bank of England's decision on interest rates.Sterling is up just 0.1% against the US dollar at $1.3064, having threatened to fall below $1.30 earlier this week for the first time since April.Yet fresh dovish signals from the BoE today could validate further downside, keeping momentum stretched and positioning skewed.There's obviously a list of possible tax measures, but raising taxes on banks is a long way down that list," said one person briefed on her thinking.Another person close to the process said: She is not minded to do this." A third person said: Banks are already paying a lot of tax. We aren't going to do it." Continue reading...
Scheme aims to raise $125bn to invest in bonds, with returns used to reward tropical countries for conservationAs a battle-scarred veteran of the war against nature, Garo Batmanian has spent 45 years trying to defend the Amazon rainforest. For most of that time, the resistance he leads has been outfunded and outgunned by those who profit from destruction. The most Batmanian felt he could achieve was to slow the advance of the chainsaws and tractors.But the director-general of Brazil's forest service feels there could be a chance at the Cop30 climate summit in Belem, Brazil, next week, not just of an even fight, but perhaps a victory. There is one condition: world governments must rally behind an initiative being launched by the host nation - the Tropical Forest Forever Facility (TFFF). Continue reading...
This blog is now closed, you can read more on this story hereReeves says welfare needs to be reformed.There is nothing progressive about refusing to reform a system that is leaving one in eight young people out of education, or employment.I put our public finances back on a firm footing, provided an urgent cash injection into a faltering public services and began rebuilding our economy.But since that budget, the world has thrown even more challenges our way. Continue reading...
The chancellor is levelling with us about the pain to come. Is there anyone outside Planet Rachel who couldn't see that truth two years ago?This would actually have been quite an understandable day for Rachel Reeves to cry at work. I'm really clear," the chancellor told the CBI less than a year ago, I'm not coming back with more borrowing or more taxes." Can I shock you ...? We did wipe the slate clean," she continued less than 12 months ago. [We] put public finances and public services on a firm footing, and as a result we won't have to do a budget like this ever again." Again: can I shock you ...?So, then, to Reeves's podium appearance from Downing Street this morning. Vibes-wise, it was like knowing you were going to be very incompetently mugged in three weeks' time, but having to listen to a speech from the mugger about the context of it all. Or maybe a speech from an asteroid trying to get out in front of what people are going to say about it when it craters the West Midlands.Marina Hyde is a Guardian columnistA year in Westminster: John Crace, Marina Hyde and Pippa Crerar
Expert panel says report on gap in global wealth between rich and poor highlights need for intervention by G20More than $70tn (53tn) of inherited wealth will pass down the generations across the world over the next decade, widening inequality and highlighting the need for intervention by the G20 group of leading nations, a group of economists and campaigners have warned.In a report ahead of the G20 meetings in Johannesburg, hosted by the South African government later this month, the expert panel said the gap in global wealth between rich and poor will widen over the next decade without a permanent monitoring group such as the UN Intergovernmental Panel on Climate Change. Continue reading...
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Nigel Farage promised to set out his fiscal stall in a major speech in the City of London, but what did he actually say? Pippa Crerar and Kiran Stacey discuss Farage's retreat from its election promise to cut 90bn of taxes, his failure to commit to the pensions triple lock and his desire to woo the wealthy.Meanwhile, Rachel Reeves continues to labour on the autumn budget. What's going on behind the scenes?
Rolling coverage of the latest economic and financial news, as Opec+ pauses oil output hikes beyond December amid fears of a crude glutShares in Italian drinks maker Campari have fallen almost 3% tthis morning after Italian tax police seized 1.29bn worth of shares in the company, held by its controlling shareholder, following a tax evasion investigation.On Friday police said they were seizing Campari shares held by its controlling company Lagfin after a probe found 5.3bn of allegedly undeclared capital gains.The booking cycle for academic year 2025/26 has seen an increase in reservations from UK students and a reduction in the number of Chinese students staying with us, potentially the result of geopolitical events.Rental growth remains in line with guidance and we are well positioned for January sales activity. All the while, we have continued to improve the quality of the portfolio whilst delivering on capital deployment commitments." Continue reading...
EY Item Club downgrades forecast for next year, with Office for Budget Responsibility expected to follow suitThe prospect of looming tax rises and a fall in business investment will restrict the UK's economic growth rate next year to less than 1%, according to a health check of the economy by a leading consultancy.With less than four weeks before Rachel Reeves delivers her budget on 26 November, the EY Item Club has downgraded Britain's growth for next year, indicating that the economy will continue to expand at a sluggish pace, limiting tax receipts and the chancellor's financial room for manoeuvre. Continue reading...
Oxfam warns Trump policies risk driving inequality to new heights - but Democrats have also exacerbated wealth gapThe collective wealth of the top 10 US billionaires has soared by $698bn in the past year, according to a new report from Oxfam America published on Monday on the growing wealth divide.The report warns that Trump administration policies risk driving US inequality to new heights, but points out that both Republican and Democratic administrations have exacerbated the US's growing wealth gap. Continue reading...
The US high court will hear arguments on whether Trump's erratic imposition of global tariffs is legally validDonald Trump thrives on emergencies. He cried havoc on the very first day of his second term, declaring a national emergency caused by an invasion" of illegal aliens" from Mexico. He has since invoked emergencies more than any president since the passage of the National Emergencies Act in 1976.Next Wednesday, he faces another of his own making, as the US supreme court hears oral arguments on whether his globe-shaking signature economic policy - tariffs - is legally valid. Continue reading...
A debate on how to achieve fairer, greener growth could point the way to a successor for neoliberal capitalismWhat replaces neoliberal capitalism is a question at the forefront of Donald Trump's mind every day.The US president has never much liked those elements of the Washington consensus that celebrate free markets and liberal trade, as we have come to see in both his presidencies. Continue reading...
by Richard Partington Senior economics correspondent on (#71573)
Poor output since the leave vote has landed Rachel Reeves with a bigger-than-forecast budget spending gapFor Rob Rooney, the impact of Brexit for the City of London is clear. Frankfurt, Madrid, Milan and Paris are all doing better than they were. It has been at London's expense. There is no question about that."In his time as Morgan Stanley's top executive in London, Rooney led the US investment bank's relocation of hundreds of bankers and billions of pounds of assets to Frankfurt to sidestep Britain's shock EU departure. More than 440 other City companies followed suit, moving almost 1tn between them - roughly 10% of the entire UK banking system - to financial hubs across the EU. Continue reading...
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Mark Carney warns Asia-Pacific leaders global economy undergoing profound change, as China's president mounts defence of free tradeThe Canadian prime minister, Mark Carney, has warned that the era of free trade and investment that formed the foundations of the postwar global economy has ended.In a stark message to Asia-Pacific leaders at the Apec summit in South Korea on Friday, Carney said rules-based open trade no longer worked in a global economy that was undergoing one of its most profound periods of change since the fall of the Berlin Wall in 1989. Continue reading...
Talk of small boats' may dominate politics and the media, but the cost of living crisis is what most adults spend their time worrying aboutWage increases finally began to outpace price rises in June 2023, so we could technically class the previous month as the height of the cost of living crisis. Certainly, May that year was when the headlines about butter peaked. Lurpak and Anchor, both owned by the same dairy co-op, Arla, had reduced the size of their standard butter pack from 250g to 200g. The price was brought down accordingly, in due course, but for a while, certain supermarkets were still charging half-pound prices for a what would we even call 200g?" pack.The problem was, butter units are universal. A half-pound of butter always weighs the same amount in your hand, regardless of the brand. Seeing the small version in a supermarket felt almost sci-fi, like a tiny off-key detail that alerts you to the fact you've been kidnapped by aliens into a simulacrum world. They would have gotten away with it, but for that tiny flaw. Forced by the outcry to release a statement, the brand said it was trying to make prices more accessible" for consumers. One almost feels embarrassed for it, flailing around for cosy equality language that didn't explain its butter-miniatures at all.Zoe Williams is a Guardian columnist Continue reading...
Prices to spike by 10.8% this year, with some chocolatey treats seeing upticks of at least 20%, analysis showsGhosts and goblins might not be the only scary things popping up this Halloween. Prices for the holiday's most popular candy treats are rising, spooked by Donald Trump's tariffs and climate change.Candy prices are estimated to increase by 10.8% this year, according to new analysis from progressive groups the Century Foundation and the Groundwork Collaborative, with some popular chocolate-based treats seeing price upticks of at least 20%. The price increases could mean popular candy like Tootsie Rolls and Hershey's chocolate and variety packs are a few dollars more expensive than just a year ago. Continue reading...
Prospect of a tough budget is thought to have brought forward the likely date for a cut in interest rates to 3.75%The threat of higher taxes in next month's budget and concerns about slowing economic growth pushed the pound to its lowest level against the euro in more than two and a half years at one point on Wednesday.Sterling also slumped against the dollar as traders digested news that Rachel Reeves will need to fill a larger hole in the public finances when she puts together her budget plan, after a bigger-than-expected downgrade to the UK's productivity outlook. Continue reading...
Central bank sets rates at range between 3.75% and 4% amid turbulence from government shutdown and Trump's tariffsThe US Federal Reserve cut interest rates on Wednesday, the second rate cut this year amid economic turbulence from the federal government shutdown and Donald Trump's tariffs.The decision to cut the Fed's benchmark interest rate by a quarter point to a range of 3.75% to 4% comes at an extraordinary moment for the central bank. The Fed has been under immense pressure from Donald Trump to cut rates despite persistent inflation and no longer has access to key data thanks to the shutdown. Continue reading...
A $40bn rescue may have helped Javier Milei scrape through midterms, but it leaves Argentina's democracy and economy more dependent than ever on WashingtonArgentina's rightwing president, Javier Milei, his party and its allies claimed victory this week in key congressional elections. But it was Donald Trump who emerged the biggest winner. A $40bn lifeline from the US president gave Mr Milei's beleaguered government just enough credibility - and apparent firepower - to halt the Argentinian peso's slide. Crucially, this helped to stabilise consumer prices in the final weeks of the campaign. The US rescue engendered a short-lived aura of competence that allowed Mr Milei to shift the blame for rising prices back to the opposition, despite his own role in accelerating inflation by devaluing the currency when he took office.Mr Milei's wasn't a decisive triumph. His rightwing coalition got 40% of the midterms vote thanks largely to a low turnout and a fragmented opposition. His chainsaw" programme of privatisation and public spending cuts has not been popular. Polls suggest that six in 10 voters disapprove. Unsurprising, perhaps: since Mr Milei took office in December 2023, Argentinians' purchasing power has fallen sharply, real wages have declined and more than 200,000 jobs have been lost.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...
With living standards falling and the far right on the rise, the chancellor has the power to make decisions, not simply accept diktats from the marketsMore than three decades ago, James Carville, political adviser to Bill Clinton, made what became a famous quip about the power of bond markets to intimidate everybody". Clinton had entered office promising to transform the US's infrastructure, only to be told that big public spending would spook investors, drive up borrowing costs, and sink his presidency.Today, if there is one thing that Britain has in common with Clinton's US, it's that the bond markets loom large again in political discussion. Clinton shelved large-scale investment plans and slashed welfare in the belief that doing so would prove his economic credibility with investors. Likewise, in Britain, ever since Liz Truss's botched mini-budget, politicians have continually pointed to the risk of bond market revolt as the reason why public investment can't be afforded.Sahil Dutta is a lecturer in political economy and co-author of Unprecedented: How Covid-19 Revealed the Politics of Our Economy Continue reading...
UK chancellor confident of Gulf trade deal, as she faces 20bn-plus hit to public finances from UK productivity downgradeSteve Bates, executive chairman of the Office for Life Sciences, said a good US deal" would quickly resolve" the issue of a lack of confidence of big pharmaceutical companies such as AstraZeneca and MSD in the UK, and its impact on investment decisions.Quizzed by MPs on the science committee, Bates, who took up his new job at OLS in September after running the BioIndustry Association for 13 years, said:So I think a good deal with the USA can quickly resolve it, is the simple answer for that.I'm saying that if the UK can get a fantastic domestic business environment allied to access to global markets, that's a fantastic base from which any companies would want to grow for the world.I think for brand new, innovative medicines, it's likely there will be some price increase.If you go back to 2015 the spend on medicines was about 12% [of total NHS spending] if you go back earlier, it was higher, it was about 14%. It's now about 9%. So there is a possibility of increasing percentage spend. Continue reading...
by Sarah Marsh Consumer affairs correspondent and Sar on (#7129R)
Which? finds products shrinking while supermarkets keep prices flat or risingToothpaste, coffee and even heartburn medicine are among the latest products quietly shrinking in size while shoppers pay the same price, piling more pressure on household grocery budgets.Consumer watchdog Which? found a range of new examples of shrinkflation as brands cut back on quantity and quality in an effort to reduce their own costs. Continue reading...
Five ways the chancellor could mitigate a UK inflation rate that is harming households - and Labour's vote shareAfter more than three years of the cost of living crisis, Rachel Reeves is well aware of the harm inflation is inflicting on UK households - and on Labour's share of the vote.While figures out last week suggested that the annual rate of price increases may now have peaked, the chancellor focused on its continuing human impact, saying: For too long, our economy has felt stuck, with people feeling like they are putting in more and getting less out. That needs to change." Continue reading...
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For weeks now, thousands of Sydneysiders have queued for up to hours at a time, hoping to cash in on the soaring price of gold. Investors view the precious metal as a safe haven during times of economic uncertainty and despite fluctuating prices, gold is having its biggest rally since the 1970s.
While the European countries have brought their spending under control, the US president's tax cuts and defence spending will lead to increased borrowingDonald Trump is on course to push US debt levels above those of Italy and Greece by the end of the decade after wide-ranging tax cuts and increased defence spending, according to International Monetary Fund (IMF) forecasts.Illustrating the rising debt levels in Washington and efforts made by Rome and Athens to bring spending under control after the 2008 financial crash and Covid-19 pandemic, the IMF predicts the US will see its debts climb from 125% to 143% of annual income by 2030, while Italy's will flatline at about 137%. Continue reading...