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☆ Former UK PM Liz Truss is blaming the left-wing 'economic establishment' for ousting her
▼ + stars: | 2023-02-06 | by ( Elliot Smith | ) www.cnbc.com time to read: +7 min

British Prime Minister Liz Truss announces her resignation, outside Number 10 Downing Street, London, Britain October 20, 2022. Henry Nicholls | ReutersLONDON — Former U.K. Prime Minister Liz Truss is blaming a "powerful economic establishment" for bringing her chaotic 44-day tenure to an end last year. Truss was elected leader of the Conservative Party in September, defeating her eventual successor Rishi Sunak, after garnering 81,326 votes from party members following the ousting of Boris Johnson. She was acting as if winning a majority of the Conservative Party membership gave her economic credibility, and it most clearly doesn't." Current Prime Minister Rishi Sunak's government vowed to restore this credibility upon taking over in October, and quickly reversed Truss' entire economic agenda.

☆ British finance minister sticks to tax-hiking plans, pledges post-Brexit reforms
▼ + stars: | 2023-01-27 | by ( Hannah Ward-Glenton | ) www.cnbc.com time to read: +3 min

Optimism in the U.K. economy has been in "short supply" in recent months, Hunt said. The Finance Minister stressed the importance of making the U.K. a place where companies want to do business. Hunt's speech comes as the U.K. inflation rate most recently reached 10.5% in December, well above the Bank of England's target of 2%. U.S. Inflation Reduction Act concernsJeremy Hunt said the U.K. government has "some concerns" about the U.S. Inflation Reduction Act in a Q&A session that followed his speech Friday. Absolutely not," Hunt added.

☆ UK must review decision to block UK-France power cable project - court ruling
▼ + stars: | 2023-01-24 | by ( Sam Tobin | ) www.reuters.com time to read: +2 min

LONDON, Jan 24 (Reuters) - Britain must review its refusal to grant development consent for a high-voltage undersea power cable project linking Britain and France, London's High Court ruled on Tuesday. A government spokesperson said: "The UK Government is disappointed by the outcome but we will be considering the judgment carefully before deciding next steps." After requesting further information, Kwarteng last year decided that Aquind had given "insufficient consideration" to an alternative connection point in Dorset in southern England, which Aquind had previously rejected. However, the High Court ruled that it was "irrational" for Kwarteng to refuse Aquind’s application without making further inquiries about the feasibility of the location in Dorset. Reporting by Sam Tobin and Elizabeth Piper, editing by William James, Ed Osmond and Angus MacSwanOur Standards: The Thomson Reuters Trust Principles.

☆ Demand for rural homes in Britain drops as pandemic effect fades, report says
▼ + stars: | 2022-12-22 | by ( Hannah Ward-Glenton | ) www.cnbc.com time to read: +2 min

Demand for rural homes in Britain dropped as the pandemic trend of relocating to the countryside faded, according to real estate website Zoopla. In the wider Lake District national park area, demand dipped 5% compared to the same period, and in mid-Wales it fell 10%. In April 2020, during the height of the Covid-19 pandemic, 46.6% of people in employment did some work from home, according to the Office for National Statistics. The U.K. mortgage market fell into crisis in September following drastic policy shifts by then-Finance Minister Kwasi Kwarteng. Some market watchers are now predicting a major downturn in the U.K. property market as a result of the country's weakened economy and sticky high inflation rate.

☆ UK announces major overhaul of its financial sector in attempt to spur growth
▼ + stars: | 2022-12-09 | by ( Jenni Reid | ) www.cnbc.com time to read: +3 min

The U.K. government on Friday announced extensive reforms to financial regulation that it says will overhaul EU laws that "choke off growth." Finance Minister Jeremy Hunt said he wanted to ensure the U.K.'s status as "one of the most open, dynamic and competitive financial services hubs in the world." "And we will go further – delivering reform of burdensome EU laws that choke off growth in other industries such as digital technology and life sciences." Researchers at the London School of Economics said earlier this year that financial services will be among the sectors worst hit by Brexit. Another proposed reform would see regulators' remit increased to include facilitating the competitiveness of the U.K. economy, particularly the financial services sector.

☆ U.K. Tax Change to Yield Higher Costs, But Much-Needed Certainty For Companies
▼ + stars: | 2022-12-04 | by ( Jennifer Williams-Alvarez | Nina Trentmann | ) www.wsj.com time to read: +6 min

Now, under a new prime minister, the government is pledging fiscal austerity, accompanied by an increase in the corporate tax rate to 25%. Photo: Agence France-Presse/Getty ImagesWith the latest change, the corporate tax rate has flip-flopped four times in less than a year. The tax increase, from the current rate of 19%, will apply to companies with annual profit of more than £250,000, equivalent to more than $307,000. We know it is increasing to 25%.”The U.K. government’s change brings the corporate tax rate in line with those of other large economies. Photo: Jason Alden/Bloomberg NewsU.K. companies’ costs are rising on multiple fronts.

☆ U.K. Tax Change to Yield Higher Costs, but Much-Needed Certainty for Companies
▼ + stars: | 2022-12-04 | by ( Jennifer Williams-Alvarez | Nina Trentmann | ) www.wsj.com time to read: +6 min

☆ UK banks’ Big Bang thankfully looks like big flop
▼ + stars: | 2022-11-30 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

Yet, the mooted changes would probably only benefit middling lenders like Santander UK, Virgin Money (VMUK.L) and Banco Sabadell’s (SABE.MC) TSB Bank, according to the FT. And on Wednesday, the BoE’s supervisory body said it planned largely to stick to international bank-capital rules, dubbed Basel 3.1. But the big flop might not be such a bad thing for the country’s financial sector. Separately, the government’s City minister Andrew Griffith said on Nov. 29 that he wanted to relax the so-called ringfencing regime that forces large British lenders to separate their retail and investment banking arms. According to the Financial Times, the ringfencing regime would still apply to the biggest UK banks but there could be exemptions for lenders with limited trading operations including Santander UK, Virgin Money and TSB Bank.

LONDON, Nov 24 (Reuters) - Bank of England Deputy Governor Dave Ramsden backed more interest rate hikes on Thursday, but said he would consider cutting rates if the economy and inflation pressures panned out differently to his expectation. But Ramsden also said he would "continue to vote to respond forcefully" if inflation pressures proved to be more persistent than expected. The BoE has raised interest rates eight times since December 2021. Ramsden said the government's budget statement published earlier this month - comprising tax rises and spending restraint - was likely to push down on economic growth and inflation. "However, the vast majority of these measures do not come into effect until April 2025 so will have very little effect over the MPC's three-year forecast horizon, relative to what was assumed in the November MPC," Ramsden said.

☆ Bank of England confirms start of new gilt sale programme
▼ + stars: | 2022-11-23 | by ( David Milliken | Gibran Naiyyar Peshimam | ) www.reuters.com time to read: +2 min

The BoE intends to offer gilts for sale on Tuesdays, Wednesdays and Fridays, giving minimum prices that it will accept before each sale. "There will be instances when the Bank could sell a larger volume of gilts if demand is particularly strong, but also times when the Bank will sell few or no gilts if there is insufficient demand," the BoE said. On days when the DMO had held a long-dated gilt auction, the BoE would only sell index-linked gilts and vice versa. The BoE said it would publish details of the gilt sales as soon as possible after each sales window closed. ($1 = 0.8312 pounds)Reporting by David Milliken, Editing by Kylie MacLellanOur Standards: The Thomson Reuters Trust Principles.

☆ IMF backs UK plan for $65 billion of budget tightening
▼ + stars: | 2022-11-18 | by ( David Milliken | ) www.reuters.com time to read: +1 min

LONDON, Nov 18 (Reuters) - The International Monetary Fund's managing director, Kristalina Georgieva, said she had spoken with British finance minister Jeremy Hunt on Friday to welcome his latest plan for 55 billion pounds ($65 billion) of budget tightening. "It strikes the right balance between fiscal responsibility and protecting growth and vulnerable households," Georgieva said in a brief statement on social media. loadingThe IMF had criticised Hunt's predecessor, Kwasi Kwarteng, for previous budget plans in September which included 45 billion pounds of unfunded tax cuts. Hunt's plan represents tax rises and spending cuts equivalent to 2% of gross domestic product by the 2027-28 financial year. ($1 = 0.8412 pounds)Reporting by David Milliken; Editing by Alistair Smout and James DaveyOur Standards: The Thomson Reuters Trust Principles.

He froze until 2028 a threshold at which employers start to pay social security contributions, which will cost companies more. Public spending would grow more slowly than the economy but rise in overall terms, he said. It now expects gross domestic product to contract by 1.4% next year compared with its projection in March for growth of 1.8%. The OBR forecasts GDP growth of 1.3% in 2024 and 2.6% in 2025, compared with previous forecasts of 2.1% and 1.8% respectively. Thursday's forecasts by the OBR showed that target would be met in the 2027/28 financial year.

LONDON, Nov 17 (Reuters) - The pound rose for a third day against the dollar on Thursday ahead of finance minister Jeremy Hunt's new budget full of "tough but necessary" measures to control inflation. Against the euro , sterling has only risen by around 6% since late September and by 9% against the yen. Benchmark 10-year gilts are around 3.3%, their lowest since mid-September, just before Truss and Kwarteng released their budget. Typically, this would have dragged on the pound, given the lower yield advantage it affords investments in sterling. Adding an extra element of risk on Thursday, are the economic forecasts of the independent Office for Budget Responsibility, which did not release any kind of breakdown of the impact of Truss' budget in September.

☆ Premarket stocks: Get ready for a spending slowdown this holiday season
▼ + stars: | 2022-11-17 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

Retail sales surged by 1.3% in October. What’s happening: Wednesday’s headline retail sales numbers, reported by the US Census Bureau, came in strong, but the momentum is unlikely to continue. These cracks in retail are starting to show just as the sector enters its most critical sales period: The holiday shopping season. The bottom line: This holiday season will likely be a mixed bag with some winners and losers in the retail sector, said Saunders. “We do have to do some tax rises, do some spending cuts, if we’re going to show we’re a country that pays our way,” he told Sky News on Sunday.

☆ The UK has laid out a $65 billion package of tax rises and spending cuts to restore faith after political upheaval and a market storm
▼ + stars: | 2022-11-17 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

The UK's finance minister Jeremy Hunt has laid out a £55 billion package of tax rises and spending cuts. The government wants to restore credibility after a prior tax plan drove the pound to an all-time low. The fiscal plan will be divided roughly equally between tax rises and spending cuts, Hunt said. That goes contrary to the tax plan laid out by former finance minister Kwasi Kwarteng, which called for huge tax cuts. Read more: UK inflation tops 11% to hit its highest level since 1981 as food and energy prices soar

However, Biden said the weapon was probably not fired by Russia, although the investigation was ongoing. NATO ambassadors will hold an emergency meeting on Wednesday with a news conference due around 11.30 GMT. The European common currency was then knocked off that high, falling as low as $1.028 after news of the explosion in Poland sent traders to the safety of the dollar, which also caused falls in equities. "Geopolitical risks continue to hang over currency markets and are likely to remain a key driver of volatility," she said. The greenback was also down 0.15% on the Swiss franc at 0.9418, near Tuesday's seven-month low, and the dollar index, which tracks the greenback against six main peers, was 0.24% lower at 106.26.

☆ UK bond dealers see jump in gilt issuance for 2023/24 - Reuters poll
▼ + stars: | 2022-11-16 | by ( David Milliken | ) www.reuters.com time to read: +4 min

However in the 2023/24 financial year, gilt issuance is expected to jump to 238 billion pounds, according to the median poll forecast, the second highest ever after the 486 billion pounds of issuance in 2020/21 to fund COVID-19 support measures. “It feels like there shouldn’t be too many surprises, but the gilt market remains febrile, and even small news could create oversized reactions,” he said. Gilt issuance is distinct from public sector net borrowing (PSNB), the main borrowing measure forecast by Britain’s Office for Budget Responsibility. Here GEMMs expect PSNB, excluding public-sector banks, to rise to a median 187 billion pounds, almost double the 99 billion pounds forecast by the OBR in March. Next year it is forecast to fall to 142 billion pounds, versus an OBR forecast of 50.2 billion pounds.

☆ UK to turn page on 'Trussonomics' with budget plan
▼ + stars: | 2022-11-16 | by ( William Schomberg | ) www.reuters.com time to read: +4 min

He and Sunak say they must now go further. Critics say a return to austerity is unnecessary, will hurt millions of households and will deepen the expected recession. How soon spending cuts and tax rises come will be key for the short-term economic outlook. Hunt risks reviving tensions within the ruling Conservative Party, many of whose members were already upset at the scale of tax increases he announced when finance minister. The budget statement will be accompanied by forecasts from the Office for Budget Responsibility which are likely to echo the BoE's message that Britain is heading for a long recession.

☆ British government to usher in new era of austerity in effort to restore market confidence
▼ + stars: | 2022-11-15 | by ( Elliot Smith | ) www.cnbc.com time to read: +6 min

We're going to see spending cuts," Hunt told the BBC on Sunday, while also promising the government would deliver a new and more focused plan to help with household energy bills beyond April. First, an increase in council tax with local authorities allowed to raise the level of council tax above 3% without a referendum," Raja said. "And second, an increase in both the duration and scale of the windfall tax on oil and gas 'excess profits'." Spending cuts, again executed via "stealth," could take the form of "nominal cash freezes to departmental budgets," Raja said, with spending budgets topped up minimally going forward. "If he wants to reassure the markets, he will have to announce early action in the form of a big fiscal tightening.

☆ UK needs to make politically unpopular reforms to boost growth, business group says
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: +2 min

LONDON, Nov 14 (Reuters) - The British government must be willing to make politically unpopular choices in areas such as immigration and regulation to boost business investment and economic growth, the Confederation of British Industry (CBI) said on Monday. It also called on the government to streamline "the slow and inconsistent planning system", and speed-up decision-making for major developments. "All of us need to accept now that with fiscal and monetary policy tightening, we need many more pro-growth policies for our economy, if we’re to avoid a decade of no growth," CBI Director-General Tony Danker said in a statement. Danker said that if Hunt's plan for growth was only "warm words and aspirations" it wouldn't stop businesses pulling back from investment. "We need to make the UK an attractive place to invest."

☆ UK must raise taxes and cut spending, Hunt says ahead of budget
▼ + stars: | 2022-11-13 | by ( ) www.cnbc.com time to read: +2 min

Jeremy Hunt arrives at his home in London after he was appointed Chancellor of the Exchequer following the resignation of Kwasi Kwarteng. But he said poorer households should be spared much of the pain and cuts to public services would be balanced. "You don't want to do things that make any recession that you may be in worse," Hunt told Sky News on Sunday. Asked about spending cuts, Hunt said a strong economy needed good public services and cuts would be made in "balanced way". "I'm arguing for two things: both fairer choices on taxes, but also crucially, a plan for growth," she told Sky News.

☆ Britain's businesses are 'running out of fight' as country faces longest-ever recession
▼ + stars: | 2022-11-11 | by ( Karen Gilchrist | ) www.cnbc.com time to read: +5 min

U.K. businesses are bracing for a difficult winter amid soaring inflation and higher energy bills. Andrew Matthews - Pa Images | Pa Images | Getty ImagesLONDON — The doors to The 25, a Torquay-based boutique bed and breakfast on the U.K.'s southwest coast, are now closed for the winter period. With rising energy bills and higher costs piling pressure on U.K. businesses, owner Andy Banner-Price has deferred reopening by a month until well into the spring. The Bank of England has warned that the U.K. is facing its longest recession since records began a century ago. Huw Fairclough | Getty Images News | Getty ImagesUntil now, Holliday said his business has been "taking the hit" and absorbing increased production and energy costs to buffer customers.

☆ Take Five: A UK budget and trouble in crypto land
▼ + stars: | 2022-11-11 | by ( ) www.reuters.com time to read: +5 min

LONDON, Nov 11 (Reuters) - The long-awaited UK fiscal plan is (almost) here and after the ructions unleashed by September's mini-budget, markets are paying close attention. UK markets have recouped most of the maxi-losses from the mini-budget, but the outlook is grim. Reuters Graphics2/ CRYPTO CHAOSThe crypto world has been thrown into fresh chaos by a meltdown at FTX. Big banks too are starting to pare back staffing levels. September data showed a measure of underlying retail sales rising thanks to strong wage gains and savings, even as the broader number came in flat.

LONDON, Nov 7 (Reuters) - British finance minister Jeremy Hunt will seek to fill a 50 billion pound ($57 billion) hole in the country's public finances with around 30 billion pounds of spending cuts and 20 billion in tax rises, two government sources said on Monday. Hunt is due to present a fiscal statement to parliament on Nov. 17. Britain's Guardian newspaper reported on Sunday that early drafts of Hunt's statement included up to 35 billion pounds of spending cuts and 25 billion pounds of tax rises, while on Monday the Financial Times gave figures of 33 billion pounds and 21 billion pounds respectively. Last week a finance ministry source said broad-based tax rises were likely to fill a "fiscal black hole". Most of the 45 billion pounds of unfunded tax cuts which Kwarteng announced were rapidly reversed, apart from a 16 billion pound cut in payroll taxes which took effect on Nov. 6.

"There's a growing perceived chance that the Fed will be the last major central bank to throw in the towel and arrest its tightening cycle," said Francesco Pesole, FX strategist at ING. U.S. payrolls data released later on Friday will provide the latest indication of the health of the U.S. economy. In contrast, Friday data showed euro zone business activity contracted last month at the fastest pace since late 2020. CHINA HOPESFriday's 'risk on' move in currencies, as well as commodity and share markets, followed reports China could relax its anti-COVID restrictions, which have been hobbling economic activity. "CNH (the yuan traded offshore) will tell you if investors are running hot or cold in China markets.

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