Milken Attendees Show Calm Over Economy in Public, Worry in Private
Attendees of this week's Milken Institute Global Conference heard a lot of upbeat chatter from the stages of the Beverly Hilton hotel, where billionaires and executives frequently took a sanguine tone about the state of markets and the global economy.
Treasury Secretary Scott Bessent touted the US as the premier destination for global capital. KKR & Co. co-founder George Roberts told the audience to 'stay calm and carry on.' Ares Management Corp. Chief Executive Officer Mike Arougheti spoke of the 'golden opportunity' of private credit.
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22 minutes ago
- Yahoo
Trump tariffs live updates: Trump says he will set unilateral tariff rates within weeks
President Donald Trump told reporters on Wednesday that he would send letters to trading partners in the next week or two setting unilateral tariff rates. 'At a certain point, we're just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it,' the president said at the Kennedy Center in Washington. Soon after introducing steep new tariffs that roiled markets, Trump instituted a pause on his most punishing duties that expires July 9. His latest comment, however, only muddies the waters about what could happen next as the deadline approaches. Earlier on Wednesday, Treasury Secretary Scott Bessent told Congress that it is "highly likely" that the tariff pause would be extended for countries that are negotiating with the administration "in good faith." "There are 18 important trading partners — we are working toward deals on those — and it is highly likely that those countries that are ... negotiating in good faith, we will roll the date forward," Bessent said during testimony before the House Ways and Means Committee. On Tuesday, the US and China agreed to a framework and implementation plan to ease tariff and trade tensions. Trump signaled his approval, saying the deal was "done" pending sign-off from him and Chinese President Xi Jinping. Trump and other US officials indicated the deal should resolve issues between the two countries on rare earths and magnets, though reports later indicated China would only loosen restrictions on rare earth mineral exports for a six-month period. Trump also said the US will allow Chinese students in US colleges, a sticking point that had emerged in the weeks following the countries' mid-May deal in Geneva. Trump said the US would impose a total of 55% tariffs on Chinese goods. Yahoo Finance's Ben Werschkul reports, citing a White House official, that Trump arrived at that figure by adding together an array of preexisting duties and not any new tariffs. Meanwhile, though Trump's most sweeping tariffs continue to face legal uncertainty, on Tuesday, the president received a favorable update. A federal appeals court held a decision saying his tariffs can temporarily stay in effect. The US Court of International Trade had blocked their implementation last month, deeming the method used to enact them "unlawful." Read more: What Trump's tariffs mean for the economy and your wallet Here are the latest updates as the policy reverberates around the world. Treasury Secretary Scott Bessent told House lawmakers on Wednesday that the Trump administration may extend the 90-day tariff pause on some countries in order to continue trade negotiations. When asked if Americans should prepare for another "Liberation Day" on July 9, when the tariff pause ends for most countries, Bessent said that the administration may choose to move the deadline on 18 of the most important trading partners, so long as they make an effort to come to the negotiating table. "We are working toward deals on those, and it is highly likely that [for] those countries — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the day forward to continue good faith negotiations," Bessent said (see video below). "If someone is not negotiating, then we will not." A recent report on the drastic decline of US ocean imports serves as an example of how President Trump's increased tariffs on China affected supply chains and several industries as ttalks continue. Reuters reports: Read more here. The Treasury Department says that the US government is successfully using tariffs to decrease the budget deficit by more than $30 billion, largely due to increased customs receipts. Reuters reports: Read more here. China will ease curbs on exports of rare earth minerals for six months as part of a new trade understanding with the US, according to The Wall Street Journal. The move could add more uncertainty for American manufacturers, particularly the auto industry, which has been pushing for easier access. The Journal notes that the move gives China leverage down the line if tensions ratchet back up. From the report: In celebrating the agreement early Wednesday, President Trump noted "any necessary rare earths will be supplied, up front, by China." He did not mention any time limit on loosening those restrictions. Treasury Secretary Scott Bessent, in testimony before Congress on Wednesday, painted Wednesday's agreement as an incremental step on the longer road to a more comprehensive trade deal. "A trade deal today or last night was for a specific goal, and it will be a much longer process," he told a House committee. When asked if current US tariff levels on Chinese imports would not change again, Commerce Secretary Howard Lutnick told CNBC, "You can definitely say that." "We're in a great place with China," Lutnick said Wednesday. While the US-China truce framework is awaiting final word from US President Trump and Chinese President Xi Jinping, Lutnick added, "Both sides are really positive." The agreement is largely viewed as reestablishing the "handshake" that US and Chinese officials reached in Geneva last month, as details on a larger trade pact remain scant. Trump posted on social media this morning that the US has imposed 55% tariffs on China, a number that does not include any new tariffs but instead comprises some preexisting tariffs, Trump's fentanyl tariffs, and 10% "Liberation Day" tariffs. Lutnick touted that, as a result of the two-day talks, the US will gain access to rare earths and magnets, while the Chinese delegation sought to remove the US's export controls. He added that the trade deficit remains an ongoing issue, stating, "We're going to examine how China can do more business with us." May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump's tariffs would accelerate the pace of price increases. The Consumer Price Index (CPI) increased 0.1% on a monthly basis in May and 2.4% on an annual basis, a slight uptick from April's 2.3% gain. Yahoo Finance's Allie Canal reports: Read more here. I would keep an eye on consumer names off the news of a trade deal with China floated by President Trump this morning (see our prior post below). Seeing upticks premarket in heavily China-exposed retailers such as Nike (NKE), Walmart (WMT), Target (TGT), and Abercrombie & Fitch (ANF). The premarket gains here aren't mind-blowing in part because tariffs appear to still be in place. Trump posted on Truth Social: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Treasury Secretary Scott Bessent told House lawmakers on Wednesday that the Trump administration may extend the 90-day tariff pause on some countries in order to continue trade negotiations. When asked if Americans should prepare for another "Liberation Day" on July 9, when the tariff pause ends for most countries, Bessent said that the administration may choose to move the deadline on 18 of the most important trading partners, so long as they make an effort to come to the negotiating table. "We are working toward deals on those, and it is highly likely that [for] those countries — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the day forward to continue good faith negotiations," Bessent said (see video below). "If someone is not negotiating, then we will not." A recent report on the drastic decline of US ocean imports serves as an example of how President Trump's increased tariffs on China affected supply chains and several industries as ttalks continue. Reuters reports: Read more here. The Treasury Department says that the US government is successfully using tariffs to decrease the budget deficit by more than $30 billion, largely due to increased customs receipts. Reuters reports: Read more here. China will ease curbs on exports of rare earth minerals for six months as part of a new trade understanding with the US, according to The Wall Street Journal. The move could add more uncertainty for American manufacturers, particularly the auto industry, which has been pushing for easier access. The Journal notes that the move gives China leverage down the line if tensions ratchet back up. From the report: In celebrating the agreement early Wednesday, President Trump noted "any necessary rare earths will be supplied, up front, by China." He did not mention any time limit on loosening those restrictions. Treasury Secretary Scott Bessent, in testimony before Congress on Wednesday, painted Wednesday's agreement as an incremental step on the longer road to a more comprehensive trade deal. "A trade deal today or last night was for a specific goal, and it will be a much longer process," he told a House committee. When asked if current US tariff levels on Chinese imports would not change again, Commerce Secretary Howard Lutnick told CNBC, "You can definitely say that." "We're in a great place with China," Lutnick said Wednesday. While the US-China truce framework is awaiting final word from US President Trump and Chinese President Xi Jinping, Lutnick added, "Both sides are really positive." The agreement is largely viewed as reestablishing the "handshake" that US and Chinese officials reached in Geneva last month, as details on a larger trade pact remain scant. Trump posted on social media this morning that the US has imposed 55% tariffs on China, a number that does not include any new tariffs but instead comprises some preexisting tariffs, Trump's fentanyl tariffs, and 10% "Liberation Day" tariffs. Lutnick touted that, as a result of the two-day talks, the US will gain access to rare earths and magnets, while the Chinese delegation sought to remove the US's export controls. He added that the trade deficit remains an ongoing issue, stating, "We're going to examine how China can do more business with us." May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump's tariffs would accelerate the pace of price increases. The Consumer Price Index (CPI) increased 0.1% on a monthly basis in May and 2.4% on an annual basis, a slight uptick from April's 2.3% gain. Yahoo Finance's Allie Canal reports: Read more here. I would keep an eye on consumer names off the news of a trade deal with China floated by President Trump this morning (see our prior post below). Seeing upticks premarket in heavily China-exposed retailers such as Nike (NKE), Walmart (WMT), Target (TGT), and Abercrombie & Fitch (ANF). The premarket gains here aren't mind-blowing in part because tariffs appear to still be in place. Trump posted on Truth Social: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
41 minutes ago
Asian shares are mixed as markets shrug at latest China-US trade deal
TOKYO -- Asian shares were trading mixed early Thursday after Wall Street's rally stalled as investors appeared not to react much to the results of the latest round of China-U.S. trade talks. U.S. futures slipped and oil prices slipped. Japan's Nikkei 225 lost 0.5% to 38,213.20. Hong Kong's Hang Seng sank 0.5% to 24,234.80, while the Shanghai Composite index edged 0.1% lower to 3,404.66. In South Korea, the Kospi gained 0.8% to 2,929.94, while Australia's S&P/ASX 200 edged 0.1% higher to 8,604.50. Taiwan's Taiex lost 0.8%. On Wednesday, the S&P 500 fell 0.3% to 6,022.24 for its first loss in four days. The Dow Jones Industrial Average was virtually unchanged at 42,865.77 after edging down by 1 point. The Nasdaq composite slipped 0.5% to 3,400.30. All told, the S&P 500 fell 16.57 points to 6,022.24. The Dow Jones Industrial Average slipped 1.10 to 42,865.77, and the Nasdaq composite sank 99.11 to 19,615.88. Several Big Tech stocks led the way lower, and a 1.9% drop for Apple was the heaviest weight on the market. It's been listless this week after unveiling several modest upcoming changes to the software that runs its devices. The action was stronger in the bond market, where Treasury yields eased after a report suggested President Donald Trump's tariffs are not pushing inflation much higher, at least not yet. U.S. consumers had to pay prices for food, gasoline and other costs of living that were 2.4% higher overall in May than a year earlier. That was up from April's 2.3% inflation rate, but it wasn't as bad as the 2.5% that Wall Street was expecting. A fear has been that Trump's wide-ranging tariffs could ignite an acceleration in inflation, just when it had seemed to get nearly all the way back to the Federal Reserve's 2% target from more than 9% three summers ago. It hasn't happened, though economists warn it may take months more to feel the full effect of Trump's tariffs. Trump said Wednesday that China will supply rare-earth minerals and magnets to the United States, while his government will allow Chinese students into U.S. universities in a deal that still needs an agreement by him and by China's leader. Trump also said that 'President XI and I are going to work closely together to open up China to American Trade. This would be a great WIN for both countries!!!' Investors are still hoping for a more sweeping trade deal that would ease tensions between the world's two largest economies. Hopes for such deals between the United States and countries around the world have been one of the main reasons the S&P 500 has charged nearly all the way back to its all-time high after dropping roughly 20% below a couple months ago. Without them, the fear is that Trump's high tariffs could drive the economy into a recession while pushing inflation higher. The S&P 500 is now sitting 2% below its record. Tesla swung between gains and losses before finishing with a rise of 0.1% to continue its shaky run. It's been recovering much of its big losses taken last week after Elon Musk's relationship with Trump imploded, which in turn raised fears about a loss of business for the electric-vehicle company. Musk on Wednesday backed away from some of his earlier comments and said they went 'too far.' In the bond market, the yield on the 10-year Treasury eased to 4.41% from 4.47% late Tuesday. Shorter-term yields, which more closely track expectations for what the Fed will do with overnight interest rates, fell more. Wednesday's better-than-expected reading on inflation raised expectations along Wall Street that the Fed could cut its main interest rate at least twice by the end of the year. In other dealings early Thursday, U.S. benchmark crude oil lost 33 cents to $67.82 per barrel. Brent crude, the international standard, shed 37 cents to $69.40 per barrel. The U.S. dollar slipped to 143.89 Japanese yen from 144.60 yen. The euro rose to $1.1520 from $1.1487.
Yahoo
an hour ago
- Yahoo
This Spending Review treats London as a one-way cash cow — again
The Chancellor took us on a breezy whistle-stop tour of the entire United Kingdom in her spending review statement to Parliament. Few corners of the realm were ignored as Rachel Reeves name-checked the towns and cities that will benefit from her defence, health and infrastructure spending largesse over the coming years. Lincoln, Portsmouth, Rosyth, Glasgow, Stevenage, Barrow, Derby, Blackpool and Sheffield all got a shout out as she ran MPs through some of the greatest hits of her £1.4 trillion annual sending plans. But, as has become the pattern over recent chancellor statements, there was scant mention of London, the metropolis of nine million people and economic superpower that generates much of the tax revenues she will be busily handing out over the next four years of the Parliament. The oversight did not come as a great surprise. London Labour council leaders who visited Downing Street for briefings in the run up to the spending review came away stony-faced after being told by unsmiling Treasury ministers that they were having to make 'difficult decisions' in a very tough economic environment. But without the capital firing on all cylinders, there is no hope of the UK achieving the growth that Keir Starmer and Reeves promised the nation. London is the golden goose. The oversight did not come as a great surprise Latest ONS figures showed the public sector raised £216.4bn of revenue from London taxpayers in 2023, while public spending only totalled £172.8bn in the capital. That £43.6bn annual fiscal surplus — it will be bigger this year — helps funds the spending programmes that the Chancellor outlined in her speech. By contrast, Scottish taxpayers raised just £86.8bn but £105.4bn of public money was spent north of the border, a fiscal deficit of £18.6bn. It was the same story in the north-west where tax revenues were £95.2bn, while spending totalled £130.1bn, a deficit of £34.9bn. There is nothing wrong with that. It is only right and fair that regeneration resources should be focused on those regions that have been allowed to decline so drastically since the great de-industrialisation of the Thatcher years. But London has its own acute deprivation problems too and without investment in its own housing, policing and transport infrastructure, the city will lose its status as Europe's pre-eminent metropolis, attracting the talent and capital that the UK economy depends on. Sadiq Khan promised that the election of a Labour government would lead to a new era of peaceful coexistence between City Hall and Downing Street after the scratchy years dealing with an unsympathetic Tory chancellor. But there is no disguising the disappointment from the Mayor. A glass half full view is that it could have been worse; the £2.2bn long-term funding settlement for Transport for London was better than feared. But as the Mayor laid bare in his reaction statement, 'this spending review could result in insufficient funding for the Met and fewer police officers.' He added: 'It's also disappointing that there is no commitment today from the Treasury to invest in the new infrastructure London needs. Projects such as extending the Docklands Light Railway not only deliver economic growth across the country, but also tens of thousands of new affordable homes and jobs for Londoners. Unless the Government invests in infrastructure like this in our capital, we will not be able to build the numbers of new affordable homes Londoners need.' Those are scarcely the words of the grateful recipient of bounty from his friends at the Treasury. The spending review also detailed how the machinery of government will continue to be ripped out of London and transferred to the provinces in a huge decentralisation programme. Over the next five years ministers plan to relocate 12,000 civil service roles out of the capital and 'have 50 per cent of UK-based senior civil servants in regional offices across the UK.' Sir Humphrey may have to get used to living in Harrogate rather than Hampstead. Over the same period 11 central London offices will be closed, including 102 Petty France and 39 Victoria Street. Perhaps more significant are plans to overhaul the long-standing cost-benefit rules for investment decisions that apparently have favoured London and the south-east over the rest of the country. That sends a very clear message that public investment allocations are now likely to prioritise 'levelling up' in the regions rather than maximising returns in London — at least for the next four years. So forget Crossrail 2, and do not hold out too much hope for Hammersmith Bridge ever being fixed. The anti-London tone of today's statement may make good politics. The MP for Leeds West and Pudsey will be only too aware of the existential threat posed to Labour from the Reform party forces gathering in the Red Wall towns and cities of the Midlands and the North. She needs to give those voters reasons to back Labour again in 2029 or 2030. The country can only thrive if London keeps pumping out the tax revenues While Reform is growing in strength in the capital the Government still believes it can rely on London to deliver MPs to the Labour benches at the next general election. But does it make good economics? The country can only thrive — that spending only be made, that investment only committed — if London keeps pumping out the tax revenues that pays for it. But there are worrying signs that London is feeling pressures of its own, from the flight of young families that are emptying its schools to the exodus of tech companies from the City's stock market. The alarming reality is that the Chancellor's trip round the country handing out money also certainly means she will have to ask for more tax increases in the autumn Budget. Whether that comes in the form of a further extension of income tax thresholds, which inevitably has a bigger impact in higher earning areas such as the capital, or restoring the pension lifetime allowance, as suggested by Angela Rayner, London and Londoners will bear the brunt. London has been treated as cash cow by successive chancellors ever since the financial crash. Sooner or later there will have to be some give as well as take. Sign in to access your portfolio
