Latest news with #LabourParty
Zawya
8 hours ago
- Business
- Zawya
UK borrows more as inflation adds to debt bill, and Reeves' headache
LONDON - Britain borrowed more than expected in June as a jump in inflation pushed up the government's debt costs, adding to speculation about the need for new tax hikes by finance minister Rachel Reeves later this year. Public sector net borrowing totalled 20.7 billion pounds ($27.9 billion) last month, official data showed on Tuesday, above a median forecast of 16.5 billion pounds in a Reuters poll of economists, and the second highest amount for June on record. The borrowing was also bigger than expected by Britain's budget watchdog, which forecast June borrowing of 17.1 billion pounds when it published its outlook in March. Since then, a strong inflation reading in April had the effect of pushing up inflation-linked government bond payments. Tuesday's data from the Office for National Statistics showed the government's debt interest bill was 16.4 billion pounds in June, the third highest since records began in 1997. Having pushed up taxes by the most in decades last year, Reeves is expected to raise them again in a budget statement towards the end of 2025 in order to remain on track to meet her own targets for fixing the public finances. That job was made harder this month when the government dropped its plans to reduce the welfare bill in the face of stiff opposition within the ruling Labour Party. Slow economic growth is also adding to Reeves' problems. She has said she will balance day-to-day spending with tax revenues by the end of the decade. The latest ONS data showed the current budget was in deficit by 44.5 billion pounds in the first three months of the financial year that began in April - 5 billion pounds more than expected by the Office for Budget Responsibility watchdog. "There is no denying that fiscal developments have been very disappointing so far this financial year and Rachel Reeves will almost certainly be investigating potential revenue raising measures," said Philip Shaw, chief UK economist at Investec. Reeves will probably need to raise taxes by 20 billion pounds - about half the size of last year's package - with future increases in defence spending only likely to add to the bill further ahead, said Rob Wood, chief UK economist at Pantheon Macroeconomics. Darren Jones, a deputy to Reeves at the Treasury, said the government remained committed to its fiscal rules. Over the first three months of the fiscal year which began in April, Britain borrowed 57.8 billion pounds, 15% more than in the same period last year and the third-highest April-to-June deficit on record. The figure was back in line with the year-to-date forecast by the OBR, whose projections underpin the government's tax and spending plans, after two months of lower-than-expected borrowing by the government. The public finances have been aided by Reeves' increase in social security payments by employers. Compulsory social contributions - mostly National Insurance Contributions - jumped by 18% in the April-to-June period to 48 billion pounds. ($1 = 0.7425 pounds) (Writing by William Schomberg; Editing by Kate Holton, Andrew Heavens and Hugh Lawson)
Arab News
8 hours ago
- Politics
- Arab News
Australia's Parliament resumes with pro-Palestinian protests and calls for Israel sanctions
MELBOURNE, Australia: Australia's Parliament resumed Tuesday for the first time since the center-left Labour Party won one of the nation's largest-ever majorities in the May elections. The day was largely ceremonial, with reminders of conflict in the Middle East. Hundreds of pro-Palestinian demonstrators gathered outside Parliament House on Tuesday, calling for the government to impose sanctions on Israel after Australia joined another 27 countries in issuing a joint statement, saying the war in Gaza 'must end now.' Security guards prevented 15 demonstrators from entering the public gallery of the Senate while Attorney-General Sam Mostyn, who represents Australia's head of state King Charles III, was giving a speech to lawmakers on Tuesday afternoon, Australian Broadcasting Corp. reported. But Sen. Mehreen Faruqi, deputy leader of the minor party Australian Greens, made a silent protest by holding up a sign in the chamber during Mostyn's speech that said: 'Gaza is starving, words won't feed them, sanction Israel.' Australia has imposed financial and travel sanctions on individual Israelis, including government ministers Itamar Ben-Gvir and Bezalel Smotrich. But the Australian government has not imposed wider sanctions on the state. Joint statement sparks debate Home Affairs Minister Tony Burke described the joint statement as the strongest words his government had used on the conflict in Gaza. 'When you can make a statement together with so many other significant powers, then we're all hoping that there'll be something that will break this,' Burke told ABC. 'What we are watching on the other side of the world is indefensible. The hostages still need to be released, but the war needs to end,' Burke added. But senior opposition lawmaker Jonathon Duniam described Australia joining 27 other nations in signing the statement as 'alarming.' 'There is more to this issue than this letter betrays and I think it is a sad turn of events for our government to have joined with other countries in signing this letter,' Duniam said. Australia's 48th Parliament was opened with Indigenous ceremonies in Parliament House on a day that was otherwise steeped in centuries of British Westminster political tradition. Prime Minister Anthony Albanese thanked the traditional owners of the national capital, Canberra, at a Welcome to Country ceremony. He noted that such ceremonies performed by Indigenous people to welcome visitors to their traditional land at the start of a new parliament had been introduced by a Labor government in 2007. 'In the 48th Parliament, we write the next chapter. Let us do it with the same sense of grace and courage that First Nations people show us with their leadership,' Albanese said. Biggest Australian government majority since 1996 Labor won 94 seats in the 150-seat House of Representatives, where governments are formed. Labor's majority is the largest since Prime Minister John Howard's conservative coalition won 94 seats in 1996, when the lower chamber had only 148 seats. Howard stayed in power for almost 12 years, and Albanese is the first prime minister since then to lead a party to consecutive election victories, following an extraordinary era of political instability. The main opposition Liberal Party has elected its first woman leader, Sussan Ley, after one of the party's worst election results on record. Her conservative coalition holds 43 seats in the House, while independent lawmakers and minor parties that are not aligned with either the government or opposition hold 13. No party holds a majority in the 76-seat Senate. Labor holds 29 seats and the conservatives 27 seats. The Australian Greens hold 10 seats, which is the next largest bloc. The government will likely prefer to negotiate with the conservatives or Greens to get legislation through the Senate, rather than deal with multiple minor parties and independents.
Reuters
9 hours ago
- Business
- Reuters
UK borrows more as inflation adds to debt bill, and Reeves' headache
LONDON, July 22 (Reuters) - Britain borrowed more than expected in June as a jump in inflation pushed up the government's debt costs, adding to speculation about the need for new tax hikes by finance minister Rachel Reeves later this year. Public sector net borrowing totalled 20.7 billion pounds ($27.9 billion) last month, official data showed on Tuesday, above a median forecast of 16.5 billion pounds in a Reuters poll of economists, and the second highest amount for June on record. The borrowing was also bigger than expected by Britain's budget watchdog, which forecast June borrowing of 17.1 billion pounds when it published its outlook in March. Since then, a strong inflation reading in April had the effect of pushing up inflation-linked government bond payments. Tuesday's data from the Office for National Statistics showed the government's debt interest bill was 16.4 billion pounds in June, the third highest since records began in 1997. Having pushed up taxes by the most in decades last year, Reeves is expected to raise them again in a budget statement towards the end of 2025 in order to remain on track to meet her own targets for fixing the public finances. That job was made harder this month when the government dropped its plans to reduce the welfare bill in the face of stiff opposition within the ruling Labour Party. Slow economic growth is also adding to Reeves' problems. She has said she will balance day-to-day spending with tax revenues by the end of the decade. The latest ONS data showed the current budget was in deficit by 44.5 billion pounds in the first three months of the financial year that began in April - 5 billion pounds more than expected by the Office for Budget Responsibility watchdog. "There is no denying that fiscal developments have been very disappointing so far this financial year and Rachel Reeves will almost certainly be investigating potential revenue raising measures," said Philip Shaw, chief UK economist at Investec. Reeves will probably need to raise taxes by 20 billion pounds - about half the size of last year's package - with future increases in defence spending only likely to add to the bill further ahead, said Rob Wood, chief UK economist at Pantheon Macroeconomics. Darren Jones, a deputy to Reeves at the Treasury, said the government remained committed to its fiscal rules. Over the first three months of the fiscal year which began in April, Britain borrowed 57.8 billion pounds, 15% more than in the same period last year and the third-highest April-to-June deficit on record. The figure was back in line with the year-to-date forecast by the OBR, whose projections underpin the government's tax and spending plans, after two months of lower-than-expected borrowing by the government. The public finances have been aided by Reeves' increase in social security payments by employers. Compulsory social contributions - mostly National Insurance Contributions - jumped by 18% in the April-to-June period to 48 billion pounds. ($1 = 0.7425 pounds)
Reuters
10 hours ago
- Business
- Reuters
UK borrowing climbs as inflation adds to debt bill, and Reeves' headache
LONDON, July 22 (Reuters) - Britain borrowed more than expected in June as high inflation pushed up the government's debt costs, according to data that is likely to add to speculation about the need for fresh tax increases by finance minister Rachel Reeves. Public sector net borrowing totalled 20.7 billion pounds ($27.88 billion) last month, the data showed, higher than a median forecast of 16.5 billion pounds in a Reuters poll of economists, and the second highest for June on record. The borrowing was also higher than expected by Britain's budget watchdog, the Office for Budget Responsibility, which forecast borrowing of 17.1 billion pounds in June when it published its outlook in March. That was before a strong inflation reading in April had the effect of pushing up inflation-linked government bond payments. Tuesday's data from the Office for National Statistics showed interest payable on central government debt was 16.4 billion pounds in June, the third highest since monthly records began in 1997. Reeves is expected to raise taxes in a budget statement towards the end of 2025 in order to remain on track to meet her targets for fixing the public finances. That job was made harder by the government dropping its plans to save money from the welfare bill due to stiff opposition from within Prime Minister Keir Starmer's Labour Party. Slow economic growth is also adding to Reeves' problems. "Recent U-turns on welfare and persistent growth headwinds could open a gap against fiscal targets, which could require further tax rises or spending cuts in the Autumn Budget," Dennis Tatarkov, senior economist at KPMG UK, said. Darren Jones, a deputy to Reeves at the Treasury, said the government remained committed to its fiscal rules, chief among them a promise to cover day-to-day spending with tax revenues by the end of the decade. Over the first three months of the fiscal year which began in April, Britain borrowed 57.8 billion pounds, 15% more than in the same period last year and the third-highest April-to-June deficit on record. However, the figure was in line with the three-month forecast by the Office for Budget Responsibility, offering some comfort to Reeves. The public finances have been bolstered by her increase in social security contributions paid by employers. Compulsory social contributions - mostly National Insurance Contributions - jumped by 18% in the April-to-June period to 48 billion pounds. ($1 = 0.7425 pounds)
11 hours ago
- Business
The UK says it will sanction those who enable migrant journeys across the English Channel
LONDON -- Members of people-smuggling gangs who send migrants across the English Channel in flimsy boats will face U.K. financial sanctions under measures announced Monday by the British government. The U.K. said the new powers target smugglers and those who supply them with money and equipment. Foreign Secretary David Lammy said the measures are 'the world's first sanctions regime targeted at gangs involved in people smuggling and driving irregular migration, as well as their enablers.' Those in breach of the rules can have U.K. assets seized, be barred from using British banks and be banned from entering Britain. The first sanctions under the new powers are due to be announced on Wednesday, the Foreign Office said. The government said the new rules are authorized by existing sanctions legislation. British lawmakers won't get a chance to debate them until they return from a summer break in September. Prime Minister Keir Starmer's Labour Party government has pledged to stop criminal gangs sending thousands of migrants each year on perilous journeys across one of the world's busiest shipping lanes. Starmer has said the crime gangs are a threat to global security and should be treated like terror networks. It's unclear how effective the measures will be, since British authorities can only freeze assets that are in the United Kingdom, and most of the smugglers are based elsewhere. Sanctions are one tool in an arsenal of measures that includes beefed-up U.K. border surveillance and increased law-enforcement cooperation with France and other countries. So far the moves have had little impact. Some 37,000 people crossed the channel in 2024, and more than 22,000 so far in 2025 – an increase of about 50% from the same period last year. Dozens of people have died attempting the journey.
