Latest news with #ChancellorReeves
Yahoo
3 days ago
- Business
- Yahoo
Government sells final shares in NatWest 17 years after £45bn bailout
The UK has sold its final shares in NatWest Group, ending 17 years of state ownership since the £45bn taxpayer bailout that saved the bank from collapse at the height of the 2008 financial crisis. The full privatisation of NatWest is a symbolic moment for the banking group – formerly known as Royal Bank of Scotland (RBS) – and draws a line under the most tumultuous chapter in its near 300-year history. However, it comes at a £10bn loss to the taxpayer, with the state having only recouped about £35bn of its costs, because its shares have long languished below the average 502p level paid in the bailout. That compares with the £900m profit recouped from the sale of shares in Lloyds Banking Group, which was privatised in 2017, nine years after receiving £20.3bn in state aid for rescuing HBOS during the banking crash. The Treasury said that while it did not recover the entirely of the RBS bailout bill, 'the alternative would have been a collapse with far greater economic costs and social consequences', that could shater confidence in the UK's financial system and put savings and livelihoods at risk. Chancellor Rachel Reeves, said: 'Nearly two decades ago, the then-government stepped in to protect millions of savers and businesses from the consequences of the collapse of RBS.' 'That was the right decision then to secure the economy and NatWest's return to private ownership turns the page on a significant chapter in this country's history. We protected the economy in a time of crisis nearly 17 years ago, now we are focused on securing Britain's future in a new era of global change.' The government has now exited all of the banks it helped bail out during the financial crisis, the Treasury said. RBS became a symbol of the UK banking sector's implosion during the 2008 global financial crisis, with public ire focusing on its aggressive expansion under the former chief executive Fred 'The Shred' Goodwin. Goodwin was stripped of his knighthood in 2012, but is now estimated to be receiving a pension worth nearly £600,000 per year. In 2007 RBS led a consortium to buy the Dutch bank ABN Amro for £49bn – a huge sum at the top of the market. It was then the largest deal in financial services history, and for a short period made RBS the world's biggest bank. With £2.2tn in assets, it was more than double the size of the UK economy. Executives' excessive spending, which extended to private jets and a lavish £350m campus outside Edinburgh, also stretched the bank's finances just as the sector was facing a credit crunch. RBS was eventually forced to take a state bailout in October 2008, with the taxpayer eventually injecting £45bn into the lender, without which millions of customers' savings would have been put at risk. It left the government with an 84% stake in the banking group, leading to years of government austerity that many blame for hollowing out public services across the country. RBS, for its part, was forced to cancel bonuses and begin a long turnaround that involved slashing tens of thousands of jobs, shrinking its investment bank, and pulling out of almost 50 countries to become a UK-focused lender. It finally returned to profit in 2018, but ditched the toxic RBS name in 2020, rebranding the group – and its branches in England and Wales – as NatWest. The government started to recoup its costs through dividends paid out by the lender, and slowly sold its shares through a combination of sales to institutional investors and a drip-feeding of stock into the open market. NatWest also fast-tracked the process through multibillion-pound share buybacks. That process is now completed, bringing NatWest back into full private ownership nearly two decades after taxpayers saved it from the brink. NatWest chief executive, Paul Thwaite, said: 'This is a significant moment for NatWest Group, for all those who work here and for the UK more widely. As we turn the page on the financial crisis, we can look to the future with confidence, without forgetting the lessons of the past.' 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
The Guardian
4 days ago
- Business
- The Guardian
Government sells final shares in NatWest 17 years after £45bn bailout
The UK has sold its final shares in NatWest Group, ending 17 years of state ownership since the £45bn taxpayer bailout that saved the bank from collapse at the height of the 2008 financial crisis. The full privatisation of NatWest is a symbolic moment for the banking group – formerly known as Royal Bank of Scotland (RBS) – and draws a line under the most tumultuous chapter in its near 300-year history. However, it comes at a £10bn loss to the taxpayer, with the state having only recouped about £35bn of its costs, because its shares have long languished below the 502p level paid in the bailout. That compares with the £900m profit recouped from the sale of shares in Lloyds Banking Group, which was privatised in 2017 nine years after receiving £20.3bn in state aid for rescuing HBOS during the banking crash. The Treasury said that while it did not recover the entirely of the RBS bailout bill, 'the alternative would have been a collapse with far greater economic costs and social consequences,' shattering confidence in the UK's financial system and putting savings and livelihoods at risk. Chancellor Rachel Reeves, said: 'Nearly two decades ago, the then-government stepped in to protect millions of savers and businesses from the consequences of the collapse of RBS.' 'That was the right decision then to secure the economy and NatWest's return to private ownership turns the page on a significant chapter in this country's history. We protected the economy in a time of crisis nearly seventeen years ago, now we are focused on securing Britain's future in a new era of global change.' The government has now exited all of the banks it helped bail out during the financial crisis, the Treasury said. RBS became a symbol of the UK banking sector's implosion during the 2008 global financial crisis, with public ire focusing on its aggressive expansion under the former chief executive Fred 'The Shred' Goodwin. Goodwin was later stripped of his knighthood in 2012, but is now estimated to be receiving a pension worth nearly £600,000 per year. In 2007 RBS led a consortium to buy the Dutch bank ABN Amro for £49bn – a huge sum at the top of the market. It was then the largest deal in financial services history, and for a short period made RBS the world's biggest bank. With £2.2tn in assets, it was more than double the size of the UK economy. Executives' excessive spending, which extended to private jets and a lavish £350m campus outside Edinburgh, also stretched the bank's finances just as the sector was facing a credit crunch. RBS was eventually forced to take a state bailout in October 2008, with the taxpayer eventually injecting £45bn into the lender, without which millions of customers' savings would have been put at risk. It left the government with an 84% stake in the banking group, leading to years of government austerity that many blame for hollowing out public services across the country. RBS, for its part, was forced to cancel bonuses and begin a long turnaround that involved slashing tens of thousands of jobs, shrinking its investment bank, and pulling out of almost 50 countries to become a UK-focused lender. It finally returned to profit in 2018, but ditched the toxic RBS name in 2020, rebranding the group – and its branches in England and Wales – as NatWest. The government started to recoup its costs through dividends paid out by the lender, and slowly sold its shares through a combination of sales to institutional investors and a drip-feeding of stock into the open market. NatWest also fast-tracked the process through multibillion-pound share buybacks. That process is now completed, bringing NatWest back into full private ownership nearly two decades after taxpayers saved it from the brink. NatWest chief executive, Paul Thwaite, said: 'This is a significant moment for NatWest Group, for all those who work here and for the UK more widely. As we turn the page on the financial crisis, we can look to the future with confidence, without forgetting the lessons of the past.'
Malay Mail
4 days ago
- Business
- Malay Mail
The World Debt Situation Has Become More Unstable, Octa Broker warns
5-Year Credit Default Swaps Source: LSEG Yields on 20-Year Government Bonds Source: LSEG KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 30 May 2025 - Traders and investors alike are unnerved by the recent turbulence in the bond markets. After Moody's—a major rating agency—downgraded U.S. government debt on 16 May, and Japanese long-term bond yields soared to multi-decade highs, some market participants started to fear that the world may be on the verge of a major debt crisis. Meanwhile, the yield on 20-year UK government bonds neared 5.5%, a level not seen in 27 years, as investors grew more worried about the extent of Chancellor Rachel Reeves' borrowing plans. Octa Brokers looks at the potential implications of these developments for global U.S. mounting national debt has long been the subject of intense debate and concern among economists, policymakers, and the public. Apocalyptic predictions of a U.S. default and dollar collapse are nothing new. They first appeared decades ago and have been surfacing here and there regularly, attracting plenty of followers. However, these predictions have never materialised, while the doomsayers have been dismissed as amateur conspiracy theorists at best and irresponsible alarmists at worst. Still, while we are not inclined to take a grand stance on this issue, we cannot afford to ignore the latest market developments regarding the U.S. debt. Often called a 'ticking fiscal bomb', it has recently started raising fears about the nation's long-term economic stability and potential impact on global markets., says Kar Yong Ang, a financial market analyst at Octa the market's perception of risk regarding U.S. government debt has clearly risen. This is evident in the noticeable increase in the cost of insuring exposure to U.S. government debt over the past month. The spreads on U.S. credit default swaps (CDS)—a key measure of default risk—have reached their widest levels since the 2023 debt ceiling crisis in recent weeks (see chart below).Market stress intensified even more following Moody's downgrade and the passage of the U.S. President Donald Trump's 'One Big Beautiful Bill Act' in the House of Representatives. The bill features $3.8 trillion in tax cuts and is widely expected to worsen the federal budget deficit outlook. As a result, investors started to demand higher returns for holding long-term U.S. government bonds, pushing the yields on 20-year notes above the important 5% level on 21 Yong Ang comments:Indeed, the U.S. government actually hit its legal borrowing limit back in January and has been using special procedures to avoid exceeding it and potentially defaulting. However, these measures are expected to run out around late August or early September, at which point the government might be unable to meet all its financial of government bonds with the longest maturities have been rising sharply not just in the United States but also in Japan and the United Kingdom (UK) (see chart below). On 20 May, Japan's 20-year government bond (JGB) auction had its worst results since 2012. The demand was weak, with the bid-to-cover ratio dropping to 2.50, while the lowest accepted price was just ¥98.15, some 2% below the expected asks Kar Yong Ang, referring to BoJ plans to taper its massive bond purchase although yields on long-term JGBs have been rising since the COVID pandemic, the trend accelerated after the Bank of Japan (BoJ) moved toward monetary policy normalisation amid rising wage growth and inflation. Policy normalisation implied higher short-term rates and fewer bond purchases. Thus far, BoJ has ended its yield curve control (YCC), raised its benchmark interest rate from -0.1% to 0.5% and even embarked on quantitative tightening (QT). These factors contributed to the consistent increase in Japanese government bond yields. Today, however, the situation is complicated by additional fiscal stimulus, which could result in more government borrowing just as the BoJ prepares to slowly exit the debt markets. The Cabinet already approved a massive ¥21.9 trillion ($142 billion) economic stimulus package back in November 2024. Most recently, it approved an emergency plan to allocate ¥388 billion ($2.7 billion) from reserve funds to assist businesses and households affected by U.S. Kar Yong recent movements in the U.S., Japanese, and UK government bond markets paint a concerning picture of increasing investor unease regarding sovereign debt. From the rising cost of insuring U.S. debt and the poor reception of Japan's long-term bond auction to the near 27-year high in the UK gilt yields, a common thread of heightened risk perception is evident. As Kar Yong Ang of Octa Broker points out, factors like policy uncertainty, fiscal profligacy, and the prospect of central banks reducing their bond purchases are prompting investors to demand greater compensation for lending to Kar Yong should watch the upcoming BoJ meeting scheduled for 17 June. The BoJ will issue its regular policy rate decision and will likely announce its balance sheet reduction plan. According to MacroMicro, markets currently expect a gradual pace—around 6–7% reduction over two years. However, if the BoJ opts to speed up the process, it could put pressure on global markets___Hashtag: #Octa The issuer is solely responsible for the content of this announcement. Octa Octa is an international CFD broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools. The company is involved in a comprehensive network of charitable and humanitarian initiatives, including improving educational infrastructure and funding short-notice relief projects to support local communities. In Southeast Asia, Octa received the 'Best Trading Platform Malaysia 2024' and the 'Most Reliable Broker Asia 2023' awards from Brands and Business Magazine and International Global Forex Awards, respectively.
Daily Mail
7 days ago
- Business
- Daily Mail
ANDREW NEIL: Rachel Reeves has condemned us to a doom loop of economic despair. Brace yourself for a £30BILLION tax raid
Mark my words: there will be tax rises in the autumn. Big ones. Perhaps not quite as big as the £40billion in extra taxes Chancellor Rachel Reeves slapped on us in her first Budget last October, after promising no major tax rises to get elected. But pretty hefty nonetheless. Big enough to hurt most folks, even the 'working people' Keir Starmer is always going on about but is no more able to define than he's been able to tell us what constitutes a 'woman' (at least not until the Supreme Court helped him out).
Daily Mail
25-05-2025
- Business
- Daily Mail
Bank of England warned Downing Street against building a Chinese embassy near sensitive financial centres in London, Trump security advisers have revealed
The Bank of England has warned Downing Street against allowing a Chinese embassy to be built near sensitive financial centres in London, Donald Trump 's security advisers have revealed. The plan for the 'super embassy' was blocked by the previous government amid British intelligence warnings about its location and espionage risk, but has now been revived. Mapping data shows the proposed site lies directly between financial hubs in the City and Canary Wharf and close to three major data centres. Downing Street refused to say if it was backing the embassy plans to boost trading relations with the Chinese. Within a fortnight of Chancellor Rachel Reeves returning from an official visit to China this year, both Scotland Yard and Tower Hamlets Council mysteriously dropped their objections to the project. The plan for the 'super embassy' was blocked by the previous government amid British intelligence warnings about its location and espionage risk, but has now been revived. Pictured: Royal Mint Court, the site of the proposed new Chinese Embassy in London Now the Bank of England's opposition to building the embassy has been revealed by American intelligence sources to justify the US's own concerns. Diplomats say President Trump's administration would have reservations about sharing intelligence with the UK if the embassy opened. Documents obtained by the Conservatives also reveal Innovate UK, the Government's experts on cyber-physical infrastructure, warned the local authority 'is woefully unprepared to handle an application of this nature', as a BT telephone exchange serving the City is adjacent to the site. A Chinese embassy spokesman dismissed the espionage claims, saying: 'Anti-China elements are always keen on slandering and attacking China.' A spokesman for the Bank of England declined to comment.
