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In a live episode of Merryn Talks Money, experts discussed Chancellor Rachel Reeves' first budget, which includes a £40 billion tax increase. The panel debated whether this move underplayed the impact on working people, with analysis suggesting that three-quarters of the tax hike could lead to lower real wages. Concerns were raised about the potential effects on interest rates as well.
British businesses have expressed concerns over a £40 billion tax increase imposed by the Labour government, indicating that it will lead to reduced hiring and investment. Chancellor Rachel Reeves has excluded direct tax hikes on workers, placing the financial burden primarily on companies and shareholders.
U.K. bond yields surged following the Labour government's announcement of a £40 billion tax hike and increased borrowing. The 2-year gilt yield rose to over 4.5%, while the 10-year yield reached 4.497%. Analysts noted that projected borrowing will average £36 billion higher annually over the next five years.
Chancellor Rachel Reeves has defended her decision to impose a 20% inheritance tax on agricultural properties valued over £1 million, a move criticized by farmers who fear it may threaten family farms. Reeves stated that the change aims to protect smaller farms, with three-quarters of cases remaining unaffected.
The Resolution Foundation warns that an impending rise in UK payroll taxes could exacerbate wage stagnation, significantly impacting lower-earning workers. By 2028, real weekly wages are expected to be only £13 higher than two decades ago, hindered by inflation and stagnant pay during the current parliamentary term. This analysis aligns with findings from the Office for Budget Responsibility regarding Chancellor Rachel Reeves' plans to raise £26 billion through increased National Insurance contributions.
Rachel Reeves's first budget, which includes a £70 billion plan, has sparked discussions about the allocation of funds for the NHS and the implications of her "tax and spend" approach. Analysts are weighing the potential risks for the chancellor moving forward.
Block, owned by Jack Dorsey, has launched its Square Card corporate service in the U.K., marking its first expansion outside North America. The free business spending card aims to provide faster access to funds for merchants, competing with major players like American Express and local banks. Square's investment comes amid concerns over U.K. taxation changes that could impact tech talent retention.
Chancellor Rachel Reeves and Prime Minister Keir Starmer strategically preannounced key measures in this year's UK budget, aiming to mitigate the impact of a traditional Labour tax-and-spend approach. Their main revenue-raising proposal includes a rise in employers' National Insurance Contributions, expected to generate an additional £25 billion. This move comes amid the ambiguity of their manifesto pledge not to raise taxes on "working people."
Chancellor Rachel Reeves announced a £40 billion tax increase and a significant rise in borrowing as part of the UK Labour's Budget. Meanwhile, Microsoft reported a 16% revenue increase driven by strong demand in cloud computing, and the US economy grew at an annualized rate of 2.8% in the third quarter, fueled by robust consumer spending. Critics are also raising concerns over a proof of citizenship law in Arizona that complicates voting in the state.
The UK is set to tighten tax rules for non-domiciled residents, replacing the current regime with a residence-based system starting April 2025. This reform aims to generate £12.7 billion ($16.6 billion) over five years and may prompt wealthy individuals to relocate to alternative hubs like Dubai, Singapore, and Switzerland.
Rachel Reeves
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Rachel Reeves faces scrutiny over tax increases in first budget presentation
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