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☆ Analysis: Despite tax U-turn, UK's Hunt still faces tough budget choices
▼ + stars: | 2022-10-17 | by ( William Schomberg | ) www.reuters.com time to read: +5 min

LONDON, Oct 17 (Reuters) - The screeching about-turn on tax cuts by finance minister Jeremy Hunt on Monday will not spare Britain from painful spending cuts and new tax hikes to fix the country's public finances. Paul Johnson, director of the Institute for Fiscal Studies, a think-tank, said Monday's tax cuts U-turn was relatively simple compared with the balance Hunt must strike between more tax increases and spending cuts over the next two weeks. Hunt said the tax U-turns announced so far would raise about 32 billion pounds a year in extra revenues. That was 40 billion pounds above the level needed to cut debt as a share of the economy which currently is about 97%. "With tens of billions of spending cuts still to come, and a new energy support package needing to be devised, many of Jeremy Hunt's tough choices still lie ahead," Torsten Bell, chief executive of the Resolution Foundation, said.

"The ongoing squeeze on household finances continues to weigh on growth, and likely to have caused the UK economy to enter a technical recession from the third quarter of this year," Yael Selfin, chief economist at KPMG UK, said. Manufacturing fell by 1.6% from July and more maintenance than unusual in the North Sea hit the mining and quarrying sector which includes oil and gas. "Many other consumer-facing services struggled, with retail, hairdressers and hotels all faring relatively poorly," ONS Chief Economist Grant Fitzner said. GDP in September is likely to be weakened by a one-off public holiday to mark the funeral of Queen Elizabeth. The International Monetary Fund said on Tuesday it expected British GDP to grow in 2023 but only by 0.3%.

☆ UK house prices could plunge 15% because of soaring mortgage rates
▼ + stars: | 2022-09-28 | by ( Anna Cooban | ) edition.cnn.com time to read: +3 min

London CNN Business —House prices in the United Kingdom could plummet by as much as 15% if the country presses ahead with its tax-slashing economic gamble. Credit Suisse (AMJL) said on Tuesday that UK house prices could “easily” fall between 10% and 15% over the next 18 months if the Bank of England aggressively hikes interest rates to keep inflation in check. Some analysts now expect the Bank of England to raise interest rates to 6% next year, up from its current 2.25%, to prop up the ailing currency. Capital Economics, which likewise forecasts a drop in house prices of between 10% and 15%, warned the slump could be “devastating.”“The resulting drop in buying power makes a significant drop in house prices inevitable,” Andrew Wishart, senior economist at Capital Economics, said in a research note on Tuesday. “Mortgage arrears and default would rise just as house prices likely would be tumbling, placing huge strain on banks’ balance sheets,” Tombs said.

☆ UK lenders halt mortgage deals to customers after market chaos
▼ + stars: | 2022-09-27 | by ( Sophie Kiderlin | ) www.cnbc.com time to read: +3 min

Oli Scarff | Getty Images News | Getty ImagesLONDON - U.K. lenders Virgin Money, Halifax and Skipton Building Society pulled some of their mortgage deals to customers after the tumult in British bond markets. Virgin Money and Skipton Building Society temporarily paused mortgage offers for new customers, while Halifax — owned by the Lloyds Banking Group — is planning to halt any mortgage products with fees where lower interest rates are usually offered. Skipton Building Society said they had paused their products in order to "reprice following the market response over recent days." Markets have begun pricing in a base rate rise to as high as 6% for next year, from 2.25% currently, raising concerns among mortgage lenders and borrowers. "Households refinancing a two-year fixed rate mortgage in the first half of next year will see monthly repayments jump to about £1,490 early next year, from £863 when they took on the mortgage two years prior."

☆ UK mortgage borrowers are in for a nasty shock from soaring rates
▼ + stars: | 2022-09-27 | by ( Anna Cooban | ) edition.cnn.com time to read: +4 min

London CNN Business —Millions of mortgage borrowers in the United Kingdom are bracing themselves for huge hikes to their monthly payments as a consequence of the run on the pound. Markets had already been expecting the central bank to raise interest rates to 4.75% by next spring. There are 9 million outstanding residential mortgages in the United Kingdom, according to UK Finance, an association of banks and financial services firms. About 20% of those loans are tracker, or variable rate products, that typically become more expensive when the central bank hikes rates. Halifax, owned by Lloyds Bank (LLDTF), removed some of its mortgage products, while Virgin Money stopped taking mortgage applications from new customers until later this week.

☆ The Truss tax plan cushions the wealthy while pushing borrowers toward a financial cliff
▼ + stars: | 2022-09-27 | by ( Allison Morrow | ) edition.cnn.com time to read: +7 min

That’s because the Bank of England is now widely expected to hike interest rates even further to tackle inflation that will be exacerbated by the government’s sweeping tax cuts. That means many as 1.8 million borrowers are now hurtling toward a financial cliff as they prepare to refinance next year, when the mortgage rate may well have doubled. The vast majority (nearly two-thirds) of the tax gains go to the wealthiest one-fifth of households, according to one think tank estimate. According to the US Treasury, tax cuts reduced federal revenues by about 9% in the first couple of years. However, Congress eventually decided the sweeping tax cuts were unsustainable and, with Reagan’s approval, raised taxes by a lot in 1982.

The British pound plunged to a record low against the U.S. dollar Monday. The pound, historically one of the strongest currencies in the world, fell to as low as $1.04 before bouncing back to approximately $1.07. For most of the past few decades, the pound averaged a price of about $1.50 against the dollar. The decline in the British pound in itself won't have a direct impact on the U.S. economy, experts say. But as the value of the pound has dropped, the value of the U.S. dollar has reached all-time highs.

☆ The drop in the pound is sending UK rate expectations to 6% in 2023 - and that means a spike of 73% for some mortgage payments, economist says
▼ + stars: | 2022-09-26 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Expectations are rising that the UK's benchmark rate will reach 6% in 2023 on the back of the pound's slide. That could mean monthly payments for some refinanced mortgages could jump by 73% to nearly £1,500 in the first half of next year, said Pantheon Macroeconomics's chief UK economist. In dollar terms Monday, monthly payments could rise to $1,593 from $923. A 2-year fixed rate mortgage is the shortest-term offered in the UK for a fixed home loan, according to product comparison website Money.co.uk. The UK's central bank has raised the benchmark interest rate to 2.25% in seven hikes since December to control inflation.

☆ China lost its Yangtze River dolphin. Climate change is coming for other species next
▼ + stars: | 2022-09-17 | by ( Heather Chen | ) edition.cnn.com time to read: +7 min

China has been grappling with its worst heat wave on record and the Yangtze, the third longest river in the world, is drying up. Parts of the Yangtze River have dried up from the extreme heat. Experts have also noticed a drastic decline of many native freshwater species of fish, like the now extinct Chinese paddlefish and sturgeon. “The Yangtze is the longest river in China and (all of) Asia and has long been a cradle of civilization. “If there’s anything we can learn from the death of the Yangtze River dolphin, it’s that extinction is forever and we can’t afford to take it lightly.”

☆ Read the exclusive pitch deck that recruiting startup Joonko used to raise $25 million from top VCs including Insight Partners
▼ + stars: | 2022-09-13 | by ( Jessica Xing | ) www.businessinsider.com time to read: +3 min

Read the pitch deck Joonko used to raise a $25 million Series B led by Insight Partners. Joonko, a human-resources tech startup in Israel, just raised a $25 million Series B funding round led by the venture-capital heavyweight Insight Partners. Backing its mission with business metrics like annual recurring revenue and a growing client base won over those investors, CEO Ilit Raz told Insider. It raised a $10 million Series A round last year at a $89 million valuation, according to PitchBook. Read the pitch deck that Joonko used to raise its $25 million Series B:

☆ Transgender TikTok creators say the app's mysterious 'For You' page is a breeding ground for transphobia and targeted harassment
▼ + stars: | 2021-02-27 | by ( Connor Perrett | ) www.businessinsider.com time to read: +27 min

Brickham, a 38-year-old trans woman living in Florida, posted photos of her transition after seeing other trans creators do the same. But transgender creators say TikTok is an unwitting accelerator for transphobia and harassment. TikTok features — like duets, which allow users to respond to another user's videos — have also been a tool for harassers. Trans creators told Insider that the "For You" page allowed them to quickly find a community and support on the app. Creators told Insider that the transphobia they faced on TikTok was more intense than on other social-media platforms.

Persons: —, Chelsea Brickham, TikTok, Brickham, she'd, didn't, they'd, Madelyn Whitley, Whitley, Gen, we're, Aiden Mann, I've, Mann, Daniel Sinclair, Sinclair, ByteDance, There's, Trump, you've, Fletcher Furst, Furst, who've, Samuel, he'd, it's, Eric Han, Han, Dr, Ric Matthews, Matthews, Melissa Robinson, Brown, I'm, Jade Marie Eichelberger, Marie Eichelberger, Eichelberger, Chris Organizations: Service, Business, Chelsea, Washington Post, Trans, Facebook, Twitter, YouTube, Wired, City , University of London, Intercept, Australian, American Academy of Pediatrics, TikTokers, TikTok, New York Times Locations: Florida, TikTok, COVID, New York, France, Tennessee, China, Musical.ly, Alberta, Canada, Oregon, South Carolina, Black

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