Latest news with #MelStride
Daily Mail
2 hours ago
- Business
- Daily Mail
IMF urges UK to make two interest rate cuts... as Labour's pledge to make Britain fastest growing economy in the G7 lies in tatters
Britain looks set for two more interest rate cuts this year to boost the economy as it lags behind Donald Trump 's America, according to a leading global watchdog. In a report on Tuesday, the International Monetary Fund (IMF) said it expects rates to drop from the current 4.25 per cent to 3.75 per cent by Christmas. It came as the fund warned Labour's pledge to make Britain the fastest growing economy in the G7 is in tatters in the wake of the Chancellor's tax hikes. EU members of the group are faring even worse – compounding the bloc's misery as it reels from a lopsided trade deal with the US that has left it with worse terms than Brexit Britain. Germany, France and Italy, as well as Japan, will all grow less than the UK over the next two years, according to the IMF. Two more rate cuts – as suggested by the IMF – would boost households and businesses hoping for lower borrowing costs. Britain does hold some unwanted records, with inflation the highest among the seven nations at 3.6 per cent. The UK Government's borrowing costs on the international bond markets are also higher than in any other G7 nation – piling further strain on creaking public finances. Shadow Chancellor Mel Stride said: 'Business confidence has collapsed all because of the Chancellor's reckless economic choices.' In an update to its World Economic Outlook, the IMF said it expects the UK economy to grow by 1.2 per cent this year and 1.4 per cent in 2026.
Scottish Sun
a day ago
- Business
- Scottish Sun
Fifty thousand businesses on brink of collapse over ‘immense strain' of rising wage costs
Those in 'significant' financial distress increased by ten per cent over the year 'CRITICAL' LEVELS Fifty thousand businesses on brink of collapse over 'immense strain' of rising wage costs FIFTY thousand businesses are on the brink of collapse as rising wage costs put them under 'immense strain', a report reveals. The number in critical financial distress has risen by more than a fifth compared with a year ago. Advertisement 2 The British Beer and Pub Association warned 378 pubs would close this year in England, Wales and Scotland Credit: Getty Chancellor Rachel Reeves' increases in National Insurance costs and the minimum wage are seen as key reasons, the Begbies Traynor survey shows. Bars and restaurants at 'critical' financial level were up by 41 per cent. And there was a 39 per cent rise among travel and tourism companies. The total number hit 49,309. Advertisement Those in 'significant' financial distress increased by ten per cent over the year to 666,876. Shadow Chancellor Mel Stride said: 'Labour's reckless Jobs Tax is pushing thousands of small businesses to the brink. "The lifeblood of local communities are paying the price.' Ric Traynor, of Begbies Traynor, said: 'Small and medium-sized businesses across the UK are being put under immense strain by the recent increases to employer's NI and the national minimum wage.' Advertisement The British Beer and Pub Association warned 378 pubs would close this year in England, Wales and Scotland. The BBPA's Emma McClarkin said: 'We're calling on government to fulfil promises of business rates reform, mitigate costs and cut beer duty.' 2 The number of businesses in critical financial distress has surged by over 20% — with Rachel Reeves' hikes in National Insurance and minimum wage blamed Credit: PA
Yahoo
2 days ago
- Business
- Yahoo
What to expect in the Budget 2025
Anaemic growth and higher-than-expected government borrowing will be weighing on Rachel Reeves as MPs head off on their six-week summer recess. The Chancellor will not be able to avoid questions about how she's going to address the economic hole the country faces. Shadow chancellor, Mel Stride, accused Ms Reeves of 'burying' an extra £10bn of spending in her Spending Review. It came as government borrowing in June hit £20.7bn – several billion pounds higher than in May – to bridge the gap between tax receipts and spending. Inevitably, speculation is already ramping up about what the next Budget will bring. Ms Reeves has refused to be drawn on whether she might be forced to break Labour's manifesto pledge not to raise taxes on 'working people'. But as the Chancellor demonstrated last year, she's not adverse to other tax raids. The date of the next Budget is not yet confirmed, but the announcement of the Government's fiscal policy usually takes place in late October or early November. Here, Telegraph Money looks at some of what might be included, as Ms Reeves scrambles to balance the books. National Insurance on landlordsChances: 3/10 Labour has shown that it doesn't mind taking on landlords with the Renters' Rights Bill, and politicians of all stripes have seemingly had it in for property investors for years now. Landlords could be in the firing line as the Treasury looks to tax their 'passive' income as if it had been earned from a job. There are several ways in which the Treasury could target landlords. Profit from lettings could be made subject to National Insurance, for instance, or a separate tax rate could be created for rental income, which aligns with income tax bands. Taxing landlord income in the same way as employment has been called for by left-leaning think tanks before. Adam Corlett, of the Resolution Foundation, said: 'With tax rises clearly coming this autumn, the Chancellor should use this as an opportunity to make the tax system fairer and more efficient. 'One way to achieve this is to ensure different forms of income are taxed at the same rate, for example by levying National Insurance on income for rental properties. After all, there's no good reason why landlords should face lower tax rates than their tenants.' But campaign group, Generation Rent, warned that as more landlords move the ownership of their rental properties to limited companies structures, the tax raid could become less effective. More than 680,000 rental homes were owned by companies in March, research conducted by estate agency Hamptons found. Dan Wilson Craw, from the campaign group, said: 'The Treasury should bear in mind that increasing numbers of rental homes are owned by limited companies and in many cases would continue to pay a lower tax rate than an employee.' Another attack on pensions?Chances: 3/10 Labour has kicked a lot of decisions on pensions into the long grass. The debacle on winter fuel payments will also make the Government wary of being seen to target older people again. On Monday, Labour announced that a so-called 'Pension Commission' would be launched to investigate chronic under-saving for retirement. It came days after the Office for Budget Responsibility warned that the cost of the 'triple lock' on state pension payments would be three times what was originally predicted. So it seems unlikely that the Government will make any sweeping changes to pensions, as ministers have said that changes to how much employees save automatically won't happen before the next election. Maintaining the triple lock was also a manifesto pledge Labour breaks at its own peril. But that doesn't mean other reforms are impossible. Ahead of last year's Budget, rampant speculation about the future of the 25pc tax-free lump sum was rife, leading some savers to take out their cash in panic. It is believed Treasury civil servants have long wanted to reduce tax relief offered to higher- and additional-rate taxpayers on their pensions. Pension experts too have argued a 'flat rate' would be fairer, and could save vast sums of money. Sir Steve Webb, former pensions minister and partner at LCP, said: 'Major changes would be likely to affect millions of public sector workers, many of whom form the Government's core support base. 'But more technical areas such as the use of salary sacrifice for pension contributions could well come under the spotlight in the Chancellor's hunt for cash.' Cuts to cash IsasChances: 5/10 Change has been trailed for some time – expect the Budget to at least warn savers that reform is coming. Savers were braced for the Chancellor to cut the annual cash Isa allowance at a speech in the City earlier this month. But following a significant backlash from building societies and savers, Ms Reeves delayed any announcement. Rumours have been swirling since change was first mooted in January that the £20,000 limit for cash savings could be cut to as little as £4,000. Ms Reeves is keen to push the more than £300bn held in cash Isas into the stock market, preferably into London-listed businesses. But stopping the flood of money into cash Isas could make mortgages more expensive, building societies warned, because they use deposits to fulfil capital requirements and secure lending. Cynics would say the Government's real intention is to force people to hold their money in traditional savings accounts which are, of course, taxable. Tom Selby, of stockbroker AJ Bell, said: 'The Government has been clear it wants to encourage a retail investment culture in the UK and get more people investing for the long-term rather than stashing their hard-earned savings in cash, but there has been little detail beyond this. 'The Budget could provide the Chancellor with a platform to put some meat on the bones of this agenda.' Income tax thresholds freezeChances: 6/10 It's a big fundraiser – and a stealth tax. Seven million taxpayers have been dragged into paying higher rates of income tax as a result of frozen income tax thresholds. This policy of using 'fiscal drag' to boost tax receipts was introduced under the Conservatives. The thresholds, including the £12,570 tax-free personal allowance, were first frozen by the Tories in 2021. As things stand, the freeze is set to last until 2028 – and Ms Reeves committed to it ending then at last year's Budget. As wages increase to keep up with inflation, more workers are pulled into higher rates, meaning a bigger tax take. The freeze forced an extra 520,000 taxpayers into the 40p bracket in the last year, according to estimates by HM Revenue & Customs (HMRC). The OBR thinks that the freeze will raise an extra £48bn in 2029-2030, as the number of taxpayers passes 40 million. Sir Keir Starmer has refused to rule out a further freeze beyond the 2028 expiry date. It would be a relatively simple and, crucially, little-understood way to raise serious amounts of cash. But the Government could choose not to extend the freeze at this Budget, and instead do it at the next – well before it is due to run out. Fuel dutyChances: 4/10 Labour has a strong net zero agenda under Ed Miliband, but the Government may be too weak to load more costs on to drivers, many of whom are the very definition of working people. At last year's Budget, Ms Reeves extended a long-standing freeze on fuel duty. There is also a 5p per litre cut, which was introduced in March 2022, and will end, as things stand, next March. The estimated cost of the freeze for the current tax year is more than £3bn. Edmund King, of motoring company AA, told The Sun that any increase in cost at the pumps 'could be catastrophic' for the economy. The OBR said last October that unwinding the freeze in 2026 would increase inflation, as the price of fuel would increase. Wealth taxChances: 2/10 While Labour backbenchers are keen on introducing a wealth tax, the Cabinet appears to have come to its senses. Wealth taxes are difficult to administer and have backfired in most of the places they've been tried. Earlier this week, 26 MPs signed a Parliamentary motion calling for an annual wealth tax of 2pc on individual assets of more than £10m. They claimed that this could raise £24bn a year. Supporters included arch-Corbynites, alongside other Labour, Independent and several Plaid Cymru MPs. Some of Labour's biggest names, including Lord Kinnock, have advocated for a wealth tax. Ahead of this year's Spring Statement, Patriotic Millionaires, a campaign group which asks for higher taxes for the super-rich, said that 80pc of UK-based millionaires would support a wealth tax. But The Times reported earlier this week that Mrs Reeves was resisting calls for the implementation of such a levy, with Cabinet ministers calling it a 'non-starter'. Eight countries have previously implemented wealth taxes, including Austria, Denmark, Germany, Finland, Iceland, Luxembourg, Sweden and France, only to scrap them. Just four countries, Norway, Spain, Switzerland and Colombia still have a wealth tax. The exodus of non-doms since Labour took power will be in the forefront of Reeves' mind. A Treasury spokesman said: '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.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. 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
Yahoo
22-07-2025
- Politics
- Yahoo
Kemi Badenoch reshuffling Tory shadow cabinet today - James Cleverly set to return to frontbench
Kemi Badenoch is reshuffling her shadow cabinet today - and former foreign secretary James Cleverly is set to return to the Conservative frontbench, Sky News understands. Ms Badenoch is reorganising her frontbench for the first time since she became Conservative leader - and leader of the opposition - in November 2024. Mr Cleverly, who served as both foreign and home secretary, is understood to be being brought into her shadow cabinet. Politics latest: However, it is understood Mr Cleverly will not be made shadow chancellor, currently Mel Stride's role, but is expected to get a major role. Many thought he would beat Ms Badenoch to the leadership role last year, but he failed to make the final two. Last week, asked if he still had leadership ambitions, Mr Cleverly said: "I've forced a discipline on myself which is not to jump at something." This breaking news story is being updated and more details will be published shortly. Please refresh the page for the fullest version. You can receive Breaking News alerts on a smartphone or tablet via the Sky News App. You can also follow @SkyNews on X or subscribe to our YouTube channel to keep up with the latest news.
The Guardian
22-07-2025
- Politics
- The Guardian
James Cleverly to return as Kemi Badenoch reshuffles Tory frontbench
James Cleverly will return to the Conservative frontbench as Kemi Badenoch reshuffles her shadow cabinet on Tuesday. A Conservative source said the former leadership contender who served as home secretary would have a 'prominent role' in the reshuffled team. The shadow health secretary, Edward Argar, is expected to step down from his role due to personal issues. 'The leader of the opposition will be making some changes to her frontbench team today,' a Tory source confirmed. 'The changes reflect the next stage of the party's policy renewal programme and underline the unity of the party under new leadership. 'Sir James Cleverly is expected to return in a prominent frontbench role to take the fight to this dreadful Labour government.' A source close to the shadow chancellor, Mel Stride, said they believed he would be staying in post. The full changes are expected to be announced on Tuesday afternoon. Cleverly, who also served as foreign secretary, had returned to the backbenches after losing the leadership contest in the final round of MPs' votes, meaning Badenoch faced Robert Jenrick in the members' vote. Jenrick, who is still ambitious for the leadership, has maintained a prominent public profile as shadow justice secretary. In a speech last week, Cleverly warned the Conservatives against pursuing a populist agenda that would try to ape Nigel Farage's Reform UK. He also discounted the idea that he hoped to replace Badenoch, saying his party had to 'get out of this habit of cycling through leaders in the hope that ditching this one and picking a new one will make life easy for us'. Cleverly had been linked to a run as the Tory candidate for mayor of London and would not be drawn on his future ambitions when he gave the speech last week. He received a knighthood in April last year.
