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Time of India
4 days ago
- Business
- Time of India
Mortgage approvals in UK drop to lowest in over a year after tax break ends
LONDON: The number of mortgages approved by British lenders for house purchase fell more than expected in April to their lowest in over a year as the market adjusted to higher purchase taxes. Earlier government data showed that British house purchases surged in March to take advantage of the final month of an exemption from stamp duty land tax for many buyers, before slumping in April when the tax reverted to its normal rate. Mortgage approvals - which are typically given at least a month before a purchase completes - fell to 60,463 in April from a downwardly revised 63,603 in March. This was the lowest total since February 2024 and below economists' expectations in a Reuters poll of a smaller fall to 63,000. Net mortgage lending fell by 759 million pounds ($1.03 billion) in April - the largest monthly drop since January 2024 - after a 12.957 billion pound rise in March. This weakness may prove temporary. Earlier on Monday, Nationwide Building Society - Britain 's second-largest mortgage lender - reported faster than expected house price growth in May and said underlying demand remained strong due to low unemployment and wages outstripping inflation. However, consultancy Capital Economics said April's drop represented the third consecutive drop in mortgage approvals and the decline might not all be due to buyers bringing forward purchases to beat the tax deadline. Ruth Gregory, Capital's deputy chief economist, said she saw downside risks to her forecast of 3.5% annual house price growth for the fourth quarter of 2025. Nationwide's data showed prices up 3.5% in the year to May. The BoE data also showed unsecured consumer lending rose by a net 1.580 billion pounds - above economists' 1.1 billion pound forecast - and the annual growth rate rose to 6.7% from March's 6.2%, the fastest growth since October 2024. Capital viewed this as a sign that British domestic consumer demand remained strong despite downbeat headlines in April around U.S. President Donald Trump's tariff plans, while KPMG interpreted it as evidence that households had come under strain from an outsize rise in household bills in April.
Daily Record
26-05-2025
- Business
- Daily Record
Experts warn tax rises ‘feel inevitable' at Autumn Budget after jump in Uk Government borrowing
Income tax bands are different in Scotland, but the Personal Allowance of £12,570 is universal across the UK. Economists have said that tax increases from the Chancellor later this year 'feel inevitable' after UK Government borrowing jumped last month. The Office for National Statistics (ONS) said public sector net borrowing rose to £20.2 billion, its fourth-highest April figure on record, mounting further pressure on Chancellor Rachel Reeves to meet her fiscal rules. The state borrowing figure reflects the difference between UK Government spending and its income, largely through tax receipts. The latest figure showed that the Chancellor had to borrow more money than expected over the month, surpassing analyst predictions of £17.6 billion. It comes as Rachel Reeves seeks to meet her fiscal rule of balancing day-to-day spending with revenues by 2029/30, while improving public services and targeting accelerated economic growth. Economists have said the increased deficit, plans to increase defence spending and the U-turn on Winter Fuel Payments could indicate future tax rises are needed to balance the state finances in the longer term. Ruth Gregory, deputy chief UK economist at Capital Economics, said: 'April's public finances figures showed that despite the boost from the rise in employers' national insurance (NI) contributions, the fiscal year got off to a poor start. 'With the PM announcing a partial U-turn on the cut to winter fuel payments, the dilemma faced by the Chancellor over how to deal with increased spending pressures in an environment of low economic growth and high interest rates hasn't gone away. 'With the markets seemingly uneasy about more public borrowing, further tax rises are starting to feel inevitable.' Matt Swannell, chief economic adviser to the EY Item Club, said higher borrowing and pressure from US tariff plans on economic growth could 'more than eliminate the slim headroom' against the rules. He said: 'A potential reversal of Winter Fuel Payment cuts and the likelihood that defence spending will need to rise again will make the fiscal arithmetic even more challenging and increase the pressure to generate more revenue through tax rises.' The rise in borrowing was largely linked to increases in public sector pay, National Insurance payments and higher benefits and State Pensions. The Labour Government announced earlier this year the Personal Allowance will remain frozen at £12,570 until the 2028/29 financial year. Central government departmental spending on goods and services rose by £4.2 billion year-on-year to £37.9 billion thanks to April pay increases and cost inflation. Meanwhile, social benefits paid by the state rose £1.3 billion to £26.8 billion after inflation-linked rises in many benefits. Public sector net debt was estimated at 95.5% of UK GDP (gross domestic product) at the end of April 2025, meaning the proportion of debt was 0.7 percentage points higher than a year earlier and remains at levels last seen in the early 1960s. The deputy director for public sector finances at the ONS, Rob Doody, said: 'At £1 billion higher than the same time last year, this April's borrowing was the fourth highest for the start of the financial year since monthly records began more than 30 years ago. 'Receipts were up on last April, thanks partly to the higher rate of national insurance contributions. However, this was outweighed by greater spending, due to rising public services' running costs and increases in many benefits and state pensions.' On Thursday, the ONS also revised down its borrowing figure for the latest fiscal year, to March 2025, by around £3.7 billion to £148.3 billion after receiving more information on tax receipts. It was still around £11 billion above the forecast set by the UK Government's official forecaster, the Office for Budget Responsibility. Chief secretary to the Treasury Darren Jones said: 'After years of economic instability crippling the public purse, we have taken the decisions to stabilise our public finances, which has helped deliver four interest rate cuts since August, cutting the cost of borrowing for businesses and working people. 'We're fixing the NHS, with three million more appointments to bring waiting lists down, rebuilding Britain with our landmark planning reforms and strengthening our borders, delivering on the priorities of the country through our Plan for Change.'
Yahoo
22-05-2025
- Business
- Yahoo
FTSE 100 slides after jump in UK Government borrowing
The FTSE 100 slumped on Thursday after new data showed UK Government borrowing surged higher than expected last month. London's blue-chip index ended the day down 47.20 points to finish the day at 8,739.26, a 0.54% fall. Earlier in the day, official figures showed that public sector net borrowing in the UK soared above expectations to £20.2 billion, leading economists to predict that tax increases 'feel inevitable' later this year. The state borrowing figure reflects the difference between Government spending and its income, largely through tax receipts. Ruth Gregory, deputy chief UK economist at Capital Economics, said: 'April's public finances figures showed that despite the boost from the rise in employers' national insurance contributions, the fiscal year got off to a poor start. 'With the PM (Prime Minister) announcing a partial U-turn on the cut to winter fuel payments, the dilemma faced by the Chancellor over how to deal with increased spending pressures in an environment of low economic growth and high interest rates hasn't gone away. 'With the markets seemingly uneasy about more public borrowing, further tax rises are starting to feel inevitable.' In Europe, Germany's Dax fell 0.47% and France's Cac 40 fell 0.58%. On Wall Street, the S&P 500 was up 0.15% as UK markets were closing, while the Dow Jones was up 0.12%. Sterling was up 0.04% against the US dollar at 1.3424, while it was 0.5% up against the euro at 1.1901. In company news, BT's share price jumped higher after the telecoms giant said it was on track to deliver its major cost-cutting programme and had made more than £900 million annual savings so far. The firm said underlying earnings rose 1% to £8.21 billion in the year to the end of March, as cost savings helped offset a 2% fall in revenues. It is forecasting earnings to be broadly flat over the next financial year, between £8.2 billion and £8.3 billion. BT shares closed 3.6% higher. Elsewhere, Bloomsbury shares plummeted by a fifth after the publisher revealed its pre-tax profits slipped by 22% to £32.5 million for the year to the end of February, compared with the previous year. This was despite revenues rising by 5% year-on-year, as it benefited from expanding its consumer portfolio, and its non-consumer division was boosted by the acquisition of US publisher Rowman & Littlefield. Bloomsbury shares were down 19.5% at close. The biggest risers on the FTSE 100 were Hiscox, up 90p to 1284p, BT, up 6.1p to 175.35p, Pershing Square, up 130p to 3,856p, Beazley, up 30.5p to 949.5p, and Marks & Spencer, up 9.3p to 384p. The biggest fallers on the FTSE 100 were DCC, down 234p to 4,540p, Intermediate Capital, down 86p to 1,982p, Diageo, down 72p to 2,061p, Intertek, down 162p to 4,758p, and Kingfisher, down 9.9p to 300p. 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 Independent
22-05-2025
- Business
- The Independent
FTSE 100 slides after jump in UK Government borrowing
The FTSE 100 slumped on Thursday after new data showed UK Government borrowing surged higher than expected last month. London's blue-chip index ended the day down 47.20 points to finish the day at 8,739.26, a 0.54% fall. Earlier in the day, official figures showed that public sector net borrowing in the UK soared above expectations to £20.2 billion, leading economists to predict that tax increases 'feel inevitable' later this year. The state borrowing figure reflects the difference between Government spending and its income, largely through tax receipts. Ruth Gregory, deputy chief UK economist at Capital Economics, said: 'April's public finances figures showed that despite the boost from the rise in employers' national insurance contributions, the fiscal year got off to a poor start. 'With the PM (Prime Minister) announcing a partial U-turn on the cut to winter fuel payments, the dilemma faced by the Chancellor over how to deal with increased spending pressures in an environment of low economic growth and high interest rates hasn't gone away. 'With the markets seemingly uneasy about more public borrowing, further tax rises are starting to feel inevitable.' In Europe, Germany's Dax fell 0.47% and France's Cac 40 fell 0.58%. On Wall Street, the S&P 500 was up 0.15% as UK markets were closing, while the Dow Jones was up 0.12%. Sterling was up 0.04% against the US dollar at 1.3424, while it was 0.5% up against the euro at 1.1901. In company news, BT's share price jumped higher after the telecoms giant said it was on track to deliver its major cost-cutting programme and had made more than £900 million annual savings so far. The firm said underlying earnings rose 1% to £8.21 billion in the year to the end of March, as cost savings helped offset a 2% fall in revenues. It is forecasting earnings to be broadly flat over the next financial year, between £8.2 billion and £8.3 billion. BT shares closed 3.6% higher. Elsewhere, Bloomsbury shares plummeted by a fifth after the publisher revealed its pre-tax profits slipped by 22% to £32.5 million for the year to the end of February, compared with the previous year. This was despite revenues rising by 5% year-on-year, as it benefited from expanding its consumer portfolio, and its non-consumer division was boosted by the acquisition of US publisher Rowman & Littlefield. Bloomsbury shares were down 19.5% at close. The biggest risers on the FTSE 100 were Hiscox, up 90p to 1284p, BT, up 6.1p to 175.35p, Pershing Square, up 130p to 3,856p, Beazley, up 30.5p to 949.5p, and Marks & Spencer, up 9.3p to 384p. The biggest fallers on the FTSE 100 were DCC, down 234p to 4,540p, Intermediate Capital, down 86p to 1,982p, Diageo, down 72p to 2,061p, Intertek, down 162p to 4,758p, and Kingfisher, down 9.9p to 300p.
North Wales Chronicle
22-05-2025
- Business
- North Wales Chronicle
Tax rises ‘feel inevitable' after jump in Government borrowing
The Office for National Statistics (ONS) said public sector net borrowing rose to £20.2 billion, its fourth-highest April figure on record, mounting further pressure on Chancellor Rachel Reeves to meet her fiscal rules. The state borrowing figure reflects the difference between Government spending and its income, largely through tax receipts. The latest figure showed that the Chancellor had to borrow more money than expected over the month, surpassing analyst predictions of £17.6 billion. It comes as Rachel Reeves seeks to meet her fiscal rule of balancing day-to-day spending with revenues by 2029-30, while improving public services and targeting accelerated economic growth. Economists have said the increased deficit, plans to increase defence spending and the U-turn on winter fuel payments could indicate future tax rises are needed to balance the state finances in the longer term. Ruth Gregory, deputy chief UK economist at Capital Economics, said: 'April's public finances figures showed that despite the boost from the rise in employers' national insurance (NI) contributions, the fiscal year got off to a poor start. 'With the PM announcing a partial U-turn on the cut to winter fuel payments, the dilemma faced by the Chancellor over how to deal with increased spending pressures in an environment of low economic growth and high interest rates hasn't gone away. 'With the markets seemingly uneasy about more public borrowing, further tax rises are starting to feel inevitable.' Matt Swannell, chief economic adviser to the EY Item Club, said higher borrowing and pressure from US tariff plans on economic growth could 'more than eliminate the slim headroom' against the rules. He said: 'A potential reversal of winter fuel payment cuts and the likelihood that defence spending will need to rise again will make the fiscal arithmetic even more challenging and increase the pressure to generate more revenue through tax rises.' The rise in borrowing was largely linked to increases in public sector pay, national insurance payments and higher benefits and state pensions. Central government departmental spending on goods and services rose by £4.2 billion year-on-year to £37.9 billion thanks to April pay increases and cost inflation. Meanwhile, social benefits paid by the state rose £1.3 billion to £26.8 billion after inflation-linked rises in many benefits. Public sector net debt was estimated at 95.5% of UK GDP (gross domestic product) at the end of April 2025, meaning the proportion of debt was 0.7 percentage points higher than a year earlier and remains at levels last seen in the early 1960s. Public sector net borrowing excluding public sector banks was £20.2 billion in April 2025. This was £1.0 billion more than in April 2024 and the fourth-highest April borrowing since monthly records began in 1993. Read more ➡️ — Office for National Statistics (ONS) (@ONS) May 22, 2025 The deputy director for public sector finances at the ONS, Rob Doody, said: 'At £1 billion higher than the same time last year, this April's borrowing was the fourth highest for the start of the financial year since monthly records began more than 30 years ago. 'Receipts were up on last April, thanks partly to the higher rate of national insurance contributions. 'However, this was outweighed by greater spending, due to rising public services' running costs and increases in many benefits and state pensions.' On Thursday, the ONS also revised down its borrowing figure for the latest fiscal year, to March 2025, by around £3.7 billion to £148.3 billion after receiving more information on tax receipts. It was still around £11 billion above the forecast set by the Government's official forecaster, the Office for Budget Responsibility. Chief secretary to the Treasury Darren Jones said: 'After years of economic instability crippling the public purse, we have taken the decisions to stabilise our public finances, which has helped deliver four interest rate cuts since August, cutting the cost of borrowing for businesses and working people. 'We're fixing the NHS, with three million more appointments to bring waiting lists down, rebuilding Britain with our landmark planning reforms and strengthening our borders, delivering on the priorities of the country through our Plan for Change.'
