Chancellor Rachel Reeves announced that she has successfully negotiated spending allocations with all UK cabinet members ahead of next week’s budget, despite previous tensions over departmental cuts. In a light-hearted reference, she noted that the tradition of inflating balloons for each department has concluded, as there are now "no balloons left" in the Chief Secretary's office.
The International Monetary Fund has raised its 2024 growth forecast for the UK to 1.1%, up from 0.7%, citing lower inflation and interest rates as key factors boosting domestic demand. Inflation fell to 1.7% in September, down from 11.1% a year prior, prompting expectations of quicker interest rate cuts by the Bank of England. As the Labour Party prepares to unveil its first budget in 14 years, Prime Minister Keir Starmer warns of "tough" decisions to address a claimed £22 billion financing shortfall.
Chancellor of the Exchequer Rachel Reeves is contemplating a tax increase for online retailers like Amazon to support UK high street shops in her upcoming budget. She aims to reform the business rates system, which currently bases tax bills on physical premises, while also considering reductions for shops, leisure, and hospitality sectors.
The UK government recorded a borrowing of £79.6 billion ($103.6 billion) from April to September, exceeding forecasts by £6.7 billion. September's deficit stood at £16.6 billion, slightly better than expected but marking the third-highest borrowing for the month, intensifying pressure on Chancellor Rachel Reeves to consider tax increases and additional borrowing in the upcoming budget.
The Labour government, facing a £22 billion financing shortfall, is preparing a challenging October budget aimed at revitalizing the sluggish economy without returning to austerity. Economists anticipate a faster pace of interest rate cuts as inflation eases, with expectations for the Bank of England to lower rates to 4.5% by year-end and potentially to 3% by September 2025, contingent on the budget's impact.
Policymakers face challenges in reducing debt while avoiding tax increases, with U.K. Finance Minister Rachel Reeves addressing a £22 billion financing shortfall. Meanwhile, Maersk raised its 2024 EBITDA forecast to $11-11.5 billion, driven by strong demand and market conditions. Gold prices surged above $2,700 an ounce amid macroeconomic uncertainties, with analysts predicting further gains.
With just nine days until Rachel Reeves's first budget, questions loom over the chancellor's planned spending on public services and potential tax increases to fund it. Cabinet ministers are reportedly feeling anxious about the upcoming financial decisions. Additionally, the government is seeking public input on improving the NHS.
Britain's chancellor, Rachel Reeves, faces a pivotal moment with her first budget on October 30th, backed by a strong parliamentary majority and a leaderless opposition. This unique opportunity allows for significant tax and spending reforms aimed at stimulating economic growth before the next election in five years.
Public sector pay will increase by 4¾% to 6% in 2024–25, costing an additional £9.4 billion. While public sector pay has historically outperformed the private sector, it has lagged since 2014, with recruitment and retention challenges prevalent across various sectors, particularly in the NHS and police. The need for competitive pay is pressing, especially as the NHS aims to expand its workforce significantly by 2036.
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