FTSE 100 touches above 9,000 for the first time
The top tier later eased back to stand 3.34 points lower at 8994.72 by mid-morning.
Markets across Europe lifted tentatively with the Dax in Germany and France's Cac 40 up 0.3% and 0.2% respectively.
Investors were optimistic that a deal can still be reached between the US and EU, despite the latest tariff threats from US President Donald Trump.
Mr Trump said on Saturday that major trading partners Mexico and the EU would face a 30% tariff starting next month, piling on the pressure for deals to be struck.
Some stocks were struggling on the FTSE despite the record being reached, with Barratt Redrow plunging to the bottom of the top tier, shedding 7% after a disappointing update, which also dragged rival housebuilders Persimmon and Berkeley Group lower.
Victoria Scholar, head of investment at Interactive Investor, said a speech by Chancellor Rachel Reeves later will also be in sharp focus.
She said: 'UK Chancellor Rachel Reeves prepares to deliver her closely watched Mansion House speech tonight when she is anticipated to outline a series of financial reforms including measures to improve mortgage access.'
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The Independent
22 minutes ago
- The Independent
What is a wealth tax – and would it work in the UK?
Pressure is growing on Rachel Reeves to find new ways to boost the ailing economy after government borrowing reached the second-highest June figure since 1993 last month. Many now predict the chancellor will have little choice but to tweak taxes to find more funds for the Treasury following dramatic changes to government policy over cutting welfare spending and stripping back the winter fuel payment. At the same time, calls are also growing to axe the two-child benefit cap – a Tory-era policy which experts say keeps 400,000 children in poverty and runs contrary to Labour 's missions. These policy decisions, paired with a difficult economic backdrop, will require funds from somewhere. The chancellor has so far stuck to Labour's manifesto commitment not to raise taxes for working people, meaning tweaks to national insurance, income tax, and VAT are off the table. This means more creative tweaks may be under consideration for her next autumn budget, building on changes already made to levies like inheritance tax and employers' national insurance. One option an increasing number of campaigners are pointing to is a ' wealth tax', an economic policy adopted by very few countries which focuses on the ultra-rich. Here's everything you need to know about the idea and what the experts say about it: What is a wealth tax? A wealth tax is a direct levy on an individual's total net assets – things like property, investments, cash, and other possessions. Unlike most regular taxes, the idea is to target accumulated wealth, rather than only income earned that year. Alongside being a new way to raise revenue for the exchequer, the policy is also designed to redistribute wealth to reduce economic inequality. The UK already has some taxes that focus on assets, such as inheritance tax, capital gains tax, and council tax. Tweaking any of these may also be on the table for the chancellor later this year. Capital gains tax is most similar to a wealth tax in that it sees a levy charged on the sale of an asset. However, most models of a wealth tax would see an annual charge based on the value of assets held, even if they are not sold. The idea of a wealth tax has proven divisive among economic experts, with debates ongoing around its fairness, revenue-raising potential, and economic impact. Could a wealth tax work in the UK? Campaigners say a wealth tax could generate significant sums for the Treasury, whilst only affecting a small number of individuals who are less likely to feel the sting of higher receipts. Tax Justice UK is calling for a two per cent levy on individuals who own assets worth more than £10 million. They say this would affect 0.04 per cent of the population, while raising £24 billion a year. The calls come at a time when the wealth of the ultra-rich in the UK has increased massively in recent decades, while living standards have dropped for those on low- to middle-incomes. The Sunday Times rich list recorded 171 UK billionaires in 2023 – up from 15 in 1990. At the same time, there are now record numbers of children living in poverty in the UK, and in precarious living conditions like temporary accommodation. A wealth tax should be seriously considered by the chancellor, said author and host of the Macrodose podcast, James Meadway: 'It starts to chip away at the idea that we're just going to allow wealth to pile up in a very few hands forevermore.' Responding to criticism that a wealth tax would threaten investment in the UK, the economist said: 'Investment has fallen off a cliff between Brexit and the financial crisis. Sixty per cent of wealth in Britain is inherited. It's not something that's been built up by somebody going off and setting up a new business. 'If these people were any good, our economy would be better. It isn't better, so they're not that good, so it doesn't matter that much.' He added: 'It's not going to solve every single economic problem, but 24 billion is not a number to be sniffed at if you're the government right now looking at how you're going to continue to fund the NHS, how you're going to pay for not imposing massive benefit cuts, how you're going to get rid of the two child benefit cap. 'There's a whole stack of things that we could do with that money that isn't being done at the minute because it's just sitting in the hands of very, very wealthy people.' What are the issues with a wealth tax? One of the most difficult factors in calculating the benefits of any wealth tax is predicting what the behavioural response will be. While a wealth tax would raise fairly large sums in any scenario, this uncertainty means it is hard to model. A common concern put forward is the risk of 'capital flight,' where wealthy individuals – who tend to be more globally mobile – simply leave the UK, or at least move some of their assets. Wealth can also be held in a diverse range of assets, anything from cars to art, meaning it may be hard for tax authorities to know exactly how to enforce the levy. Dan Neidle, founder of Tax Policy Associates, said it is highly uncertain how much could be raised by implementing a wealth tax. While it is difficult to estimate exactly how many wealthy individuals would leave the UK should the measure come into force, the tax expert points out that just ten leaving could reduce the revenue by billions. This is because 15 per cent of the projected yield would come from just ten ultra-wealthy individuals, while 80 per cent would come from less than 5,000. Alongside the risk of capital flight, Mr Neidle argues that the economic damage of a wealth tax to the UK would be massive. He explained: 'If you tax something, you get less of it – always. All taxes are a trade-off; you need to just be clear about what they are. With a wealth tax, you're taxing savings and investment, so you get less savings and investment.' The tax expert points to modelling of wealth tax in the US and Germany, which found the long-term effect was a two per cent and five per cent reduction in GDP respectively. This would be damaging for the economy and hit employment hard. 'We need to respond not to what we want policies to do, but what they actually do,' Mr Neidle added. 'There are lots of ways you can reform tax and tax the wealthy fairly in a way that doesn't damage the rest of us.' These could include reforming land tax, capital gains tax, and inheritance tax. Any of these is probably a more likely option for Labour than introducing a wealth tax. But as autumn approaches, calls for some form of more redistributive measure will likely only grow louder.
Daily Record
22 minutes ago
- Daily Record
Extra £3.45 million awarded to study into possible upgrades to key Dumfries and Galloway road
The UK Government has allocated the cash to a project looking into bypassing the A75 around Springholm and Crocketford. An extra £3.45 million is to be put into investigating upgrades to the A75. The UK Government has allocated the cash to a study looking into bypassing Springholm and Crocketford. The new funding is part of a £66 million package Chancellor Rachel Reeves has announced to improve transport links in the west of Scotland. She said: 'We're pledging billions to back Scottish jobs, industry and renewal - that's why we're investing in the major transport projects, including exploring upgrades to the A75, that local communities have been calling for. 'Whilst previous governments oversaw over a decade of decline of our transport infrastructure, we're investing in Britain's renewal. This £66 million investment is exactly what our Plan for Change is about, investing in what matters to you in the places that you live.' The need to upgrade the A75 was identified in the Scottish Government's second Strategic Transport Projects Review and the UK Government's Union Connectivity Review. Despite roads devolved to the Scottish Government, in 2022, the then Chancellor Jeremy Hunt announced £5 million for a feasibility study into bypassing Springholm and Crocketford. That was increased to £8 million by Tory Prime Minister Rishi Sunak in 2023 – but after Labour won last year's General Election, the amount allocated was reduced to 'up to £5 million'. The aaward of an extra £3.45 million now takes the total for the study to a potential £8.45 million. Scotland Secretary, Ian Murray, said: 'This £66 million investment in Scotland's roads demonstrates the UK Government's commitment to improving infrastructure and driving economic growth in all parts of the UK as part of our Plan for Change. This investment will make a real difference to people's daily lives and to the local economies of the south of Scotland, Ayrshire and Renfrewshire. 'The A75 is strategically important just not within but beyond Scotland. Its upgrading is long overdue. I am pleased that the UK Government has stepped up to fund the delivery of the A75 feasibility study in full. 'This investment is yet another example of how the UK Government is building the foundations for a stronger, more prosperous future that benefits communities right across Scotland.' While the UK Government is funding the study, work to upgrade the road will come from Holyrood. The Scottish Government appointed technical advisors to work on plans for upgrades last year.
Telegraph
23 minutes ago
- Telegraph
Super-rich cancel property purchases in Britain over wealth tax fears
The super-rich are cancelling property purchases amid fears of a wealth tax, experts have said. Rachel Reeves is under mounting pressure from backbenchers and unions to impose a new levy on savings, investments and property as she looks for ways to fill an estimated £30bn hole in the public finances. Former Labour leader, Lord Kinnock, has said a 2pc tax on assets over £10m would bring in £11bn for the Treasury. So far, the Chancellor has refused to rule this out, despite warnings a wealth tax could trigger major capital flight. Advisers to the wealthy say the rumours have already pushed some to change their plans. Nimesh Shah, of business advisory firm Blick Rothenberg, said his clients – who were previously committed to Britain – were cancelling plans to buy property so they could remain 'flexible' in the event of a wealth tax. He said: 'I have had a wave of enquiries from clients after [Lord] Kinnock talked about a wealth tax. I had a query from a client this morning who was committed to staying and was about to buy a property and now think they won't because they want to be flexible about leaving.' He added others were planning to go 'anywhere but the UK' if the wealth tax went ahead. Mr Shah also said many feared Labour could bring in the wealth tax 'overnight', and impose anti-forestalling measures. James Ward, of law firm Kingsley Napley, said others had started moving cash and investments out of the UK ahead of the Budget this autumn. 'The potential wealth tax is on the tip of everyone's tongue at present,' he said. 'There is a genuine concern that there will be capital flight restrictions introduced if the situation gets too bad – so those who can be financially mobile are getting their assets away from the UK.' Wealthy fleeing UK Meanwhile, some advisers said clients had doubled back on property purchases because of the non-dom reforms and other tax changes. Matthew Braithwaite, of law firm Wedlake Bell, said: 'A high-profile wealthy client of mine last year was considering buying a trophy property this year, but has decided not to and is instead considering leaving the UK principally because of the business property relief reforms.' The Chancellor cut business property relief in the last Budget, introducing a £1m allowance for company shares qualifying for inheritance tax. Previously, families could pass on businesses of unlimited value tax-free. She also launched a major overhaul of the non-dom regime, reducing tax breaks for wealthy foreigners. Under the old non-dom rules, foreign nationals could live in the UK without paying tax on overseas income and gains for up to 15 years – but the Government has now reduced this window to just four years. The Chancellor is looking for ways to fill a black hole in the public finances resulting from weak growth, high borrowing costs and a £5bn welfare spending about-turn. A spokesman for HM Treasury said: 'As set out in the Plan for Change, the best way to strengthen public finances is by growing the economy – which is our focus. 'Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8bn and cut borrowing by £3.4bn. 'We are committed to keeping taxes for working people as low as possible, which is why at last autumn's Budget, we protected working people's payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee National Insurance, or VAT.'
