Britain's labor market is showing signs of cooling, with the weakest wage growth since early 2021, as starting pay for permanent roles fell to 52.5 in October. The Recruitment and Employment Confederation reported a decline in permanent placements and vacancies, while tax increases from the recent budget may further hinder hiring. The Bank of England's interest rate cuts are expected to be gradual, as firms face rising costs and uncertainty.
Swiss Finance Minister Karin Keller-Sutter and UK counterpart Rachel Reeves discussed the implications of Donald Trump's presidential election win on banking regulation during a meeting in London. They noted the potential for a wave of deregulation in the U.S. and emphasized the need to balance competitiveness with stability in the banking sector. Keller-Sutter is also overseeing efforts to tighten regulations in Switzerland following the recent collapse of Credit Suisse.
UK Chancellor of the Exchequer Rachel Reeves faced challenges with her debut budget, which proposed £142 billion ($184 billion) in additional borrowing, raising concerns about inflation. However, Bank of England Governor Andrew Bailey expressed support for the plan, easing market apprehensions.
Bank of England Governor Andrew Bailey briefed Chancellor Rachel Reeves on potential market reactions ahead of the UK budget. In an interview, he noted discussions about financial markets before and after the budget on October 30, which introduced significant fiscal loosening, unsettling investors.
A senior official from the UK Treasury has dismissed claims that civil servants broke the law by withholding information about a significant financial shortfall from the Office for Budget Responsibility (OBR). Permanent Secretary James Bowler acknowledged a breach of conduct but emphasized that the Treasury acted legally in its communications with the OBR, highlighting the need to enhance the existing framework.
UK borrowing costs have surged since last week's budget, erasing Chancellor Rachel Reeves' fiscal headroom. A 0.3 percentage point increase in government borrowing costs has eliminated the £9.9 billion ($12.9 billion) buffer against her fiscal rule, raising concerns over potential tax hikes or spending cuts.
Britain's wealthy are facing significant tax hikes following the Labour government's budget, which abolishes the non-dom regime and imposes new levies on private equity, second homes, and private jets. Finance Minister Rachel Reeves argues these measures are necessary for financial stability, but many affluent individuals are planning to leave the U.K., fearing a wealth exodus. Lobby groups warn that jurisdictions like Italy and Dubai are poised to attract the departing super-rich.
Chancellor of the Exchequer Rachel Reeves will attend the Eurogroup meeting on December 9, marking the first participation of a UK chancellor since Brexit. This move reflects the new Labour government's commitment to enhancing cooperation with the European Union, despite the UK not adopting the euro.
Chancellor of the Exchequer Rachel Reeves focused her first budget on business revenue, resisting calls for heavy wealth taxes. While tax breaks for pensions and ISAs remain intact, and inheritance tax unchanged, modest increases in capital gains tax primarily affect the affluent, sparing the middle classes for now.
The Bank of England is poised to implement its second interest rate cut of the year, reducing the benchmark rate to 4.75%, despite a recent fiscal boost from Chancellor Rachel Reeves that may elevate near-term inflation. While the Budget's impact on long-term inflation remains uncertain, economists believe the easing of inflationary pressures provides the central bank with the flexibility to lower rates.
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