Latest news with #ThomasPugh
Irish Times
07-08-2025
- Business
- Irish Times
Grocery price inflation jumps to almost 5%
Grocery price inflation in Ireland jumped to almost 5 per cent in July, nearly three times the rate of overall inflation. The latest Consumer Price Index (CPI) showed headline inflation in the Irish economy dropped to 1.7 per cent in July, edging down from 1.8 per cent the previous month, as consumers benefited from cheaper clothes, air fares and transport fuels. However, the figures show that food prices at a faster pace, up 4.7 per cent year-on-year, as consumers paid more for a range of basic food items. 'Food and non-alcoholic beverages rose due to higher prices across a range of products such as meat, chocolate and confectionery and milk, cheese and eggs,' the Central Statistics Office (CSO) said, with analysts attributing this to higher agricultural commodity prices working through the supply chain. READ MORE Prices – on a monthly basis – rose by 0.1 per cent in July having risen by 0.5 per cent the previous month. 'Heavy discounting in the clothing and footwear sector was the main driver of the slowdown in inflation in July,' said Thomas Pugh, chief economist at RSM Ireland. 'Clothing and footwear prices dropped by 6.3 per cent in July alone, dragging the annual rate of inflation down to -2.4 per cent.' The other notable annual change was for alcoholic beverages and tobacco, which rose by 3 per cent. There were also increases in the cost of restaurants and hotels due to higher prices for alcoholic drinks and food consumed in licensed premises, restaurants and cafes. Transport prices fell by 2.8 per cent on an annual basis 'primarily due to lower prices for air fares, petrol and diesel'. Air Fares are now 12.2 per cent lower than this time last year, according to the CSO numbers. The cost of housing, water, electricity, gas and other fuels increased primarily due to higher rents, and an increase in the cost of electricity, the CSO said. Within this category, private rents rose by 4.4 per cent while the cost of electricity rose by 2.4 per cent. Excluding energy and unprocessed food, the underlying rate of inflation was 1.8 per cent in July. 'We still think that the risks are weighted towards inflation accelerating further, but the drag on growth from US tariffs will take the sting out of domestic inflationary pressures,' Mr Pugh said. 'As the new tariffs begin to squeeze margins, many Irish businesses may be left with little choice but to pass higher costs on to consumers, adding to inflationary pressures,' said Robert Purdue, head of dealing Ireland at Ebury.
Free Malaysia Today
30-06-2025
- Business
- Free Malaysia Today
UK economy grew at fastest pace in a year in Q1 before expected slowdown
The Bank of England is expected to cut interest rates twice more over the remainder of 2025, which is likely to support household spending. (AP pic) LONDON : Britain's economy grew at its fastest pace in a year in the first three months of 2025 as homebuyers rushed to beat a deadline on property purchases and manufacturers sped up output ahead of US President Donald Trump's higher import tariffs. In a bounce that is not expected to be maintained in the rest of 2025, output grew by 0.7%, confirming a preliminary estimate and the fastest quarterly pace since the first three months of 2024, the Office for National Statistics (ONS) said. 'Growth in March alone was revised up to 0.4% from a previous reading of 0.2%,' the ONS said. The jump in economic output in early 2025 contrasted with growth of just 0.1% in the fourth quarter of 2024 and data has already shown that gross domestic product fell by 0.3% in April from March, although the drop was exacerbated by one-off factors. The Bank of England (BoE) has said it expects economic growth of about 0.25% in the second quarter of this year. Finance minister Rachel Reeves is hoping for a pickup to reduce the pressure on her to raise taxes again later this year to remain on course to meet her budget targets. Thomas Pugh, chief economist at audit firm RSM UK, said weak consumer spending and hiring figures in recent weeks were likely to be a one-off reaction to a tax increase on employers and Trump's tariffs, many of which have been suspended. 'Now that uncertainty has started to recede, consumer confidence is rebounding, and business surveys point to the worst of the labour market pain being behind us,' Pugh said. A survey published earlier today showed confidence levels among British employers hit a fresh nine-year high as they became more optimistic about the outlook for the economy. The BoE is expected to cut interest rates twice more over the remainder of 2025 which is likely to support household spending. However, a renewed rise in energy prices in the event of further conflict in the Middle East could add to the strains on the already slow-growing economy. Today's data from the ONS showed household expenditure grew by 0.4% in the January-to-March period, revised up from an initial estimate of an increase of 0.2%, driven by housing and household goods and services as well as transport. Britain's property market saw a sharp increase in activity in the run-up to the March 31 expiry of a tax break for some homebuyers. Households dipped into their reserves to help fund their spending with the saving ratio falling for the first time in two years although at 10.9% it remained strong. Manufacturing grew by 1.1% in the first quarter – ahead of the increase in US import tariffs in April – compared with the last three months of 2024. The ONS also said Britain's current account deficit grew to a bigger-than-expected £23.46 billion in the January to March period from just over £21 billion in the last three months of 2024.
Scottish Sun
20-06-2025
- Business
- Scottish Sun
Families face £20billion tax sting as Government borrowing soars to second highest May level on record
Labour have been accused of 'spending recklessly' TAX YIKES Families face £20billion tax sting as Government borrowing soars to second highest May level on record Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) FAMILIES face a £20billion tax hit after Government borrowing jumped last month, experts warned. The second highest figure on record for May, beaten only during the pandemic, saw borrowing surge to £17.7 billion, higher than forecast by the independent watchdog. Sign up for Scottish Sun newsletter Sign up Receipts for the Treasury were up to £82 billion due to higher income tax and the NI increase that kicked in from April. But with sluggish growth and the high borrowing costs could mean Rachel Reeves could lose her £10 billion financial cushion by the Budget. Thomas Pugh, economist at RSM UK, said the Chancellor may have to raise taxes between £10-£20 billion. He added: 'The under-performance of the economy and higher borrowing costs mean the Chancellor may already have lost the £9.9bn of fiscal headroom that she clawed back in March.' Shadow Chancellor, Sir Mel Stride said: 'Labour is spending recklessly, with no plan to pay for it. "Debt interest now costs us £100bn a year - that's almost twice the defence budget. 'Having turned on the spending taps, Labour have left themselves with only one option and that's to put up your taxes. Treasury Minister Darren Jones insisted the government had 'stabilised the economy and the public finances'. Growth forecast SLASHED in Spring Statement - sparking fears of MORE tax rises
Yahoo
20-06-2025
- Business
- Yahoo
Tax hike fears mount after government borrowing jumps in May
Fears the Chancellor will raise taxes in the autumn have been fuelled after official figures showed the highest May government borrowing outside the pandemic despite a tax boost from the national insurance hike. The Office for National Statistics (ONS) said borrowing surged to £17.7 billion last month, the second highest figure on record for May, surpassed only at the height of Covid. May borrowing was £700 million higher than a year earlier, though it was slightly less than the £18 billion most economists had been expecting. The higher borrowing came in spite of a surge in the tax take from national insurance after Chancellor Rachel Reeves increased employer contributions in April. The decision, which was announced in last autumn's budget, has seen wage costs soar for firms across the UK as they also faced a minimum wage rise in the same month. Experts warned the higher borrowing figures raised the chances of tax hikes to come in the budget later this year, with Ms Reeves under pressure to balance the books amid rising borrowing and her spending commitments. Thomas Pugh, economist at audit and consulting firm RSM UK, said he is pencilling in tax increases of between £10 billion and £20 billion. He said: 'The under-performance of the economy and higher borrowing costs mean the Chancellor may already have lost the £9.9 billion of fiscal headroom that she clawed back in March. 'Throw in the tough outlook for many Government departments announced in the spending review and U-turns on welfare spending and the Chancellor will probably have to announce some top-up tax increases after the summer.' Danni Hewson, AJ Bell head of financial analysis, said the borrowing figures 'will only add to speculation that the Chancellor will have to announce more spending cuts or further tax increases at the next budget if she wants to meet her fiscal rules and pay for her spending plans'. 'One big shock could wipe out any headroom Rachel Reeves might have, and there are still question marks about how much of GDP (gross domestic product) should be spent on defence and where the money is going to come from,' she added. Borrowing for the first two months of the financial year to date was £37.7 billion, £1.6 billion more than the same two-month period in 2024, according to the ONS. The data showed so-called compulsory social contributions, largely made up of national insurance contributions (NICs), jumped by £3.9 billion or 14.7% to a record £30.2 billion in April and May combined. Rob Doody, deputy director for public sector finances, said: 'While receipts were up, thanks partly to higher income tax revenue and national insurance contributions, spending was up more, affected by increased running costs and inflation-linked uplifts to many benefits.' While May's borrowing out-turn was lower than economists were expecting, it was more than the £17.1 billion pencilled in by the UK's independent fiscal watchdog, the Office for Budget Responsibility (OBR), in March. The figures showed that central government tax receipts in May increased by £3.5 billion to £61.7 billion, while higher NICs saw social contributions rise by £1.8 billion to £15.1 billion last month alone. Public sector net debt, excluding public sector banks, stood at £2.87 trillion at the end of May and was estimated at 96.4% of GDP, which was 0.5 percentage points higher than a year earlier and remains at levels last seen in the early 1960s. The ONS said the sale of the final tranche of taxpayer shares in NatWest, formerly Royal Bank of Scotland, cut net debt by £800 million last month, but did not have an impact on borrowing in the month. Interest payments on debt, which are linked to inflation, fell £700 million to £7.6 million due to previous falls in the Retail Prices Index (RPI). But recent rises in RPI are expected to see debt interest payments race higher in June. Chief Secretary to the Treasury Darren Jones insisted the Government had 'stabilised the economy and the public finances'. 'Since taking office, we have taken the right decisions to protect working people, begin repairing the NHS, and fix the foundations to rebuild Britain,' he said.
The Independent
20-06-2025
- Business
- The Independent
Tax hike fears mount after government borrowing jumps in May
Fears the Chancellor will raise taxes in the autumn have been fuelled after official figures showed the highest May government borrowing outside the pandemic despite a tax boost from the national insurance hike. The Office for National Statistics (ONS) said borrowing surged to £17.7 billion last month, the second highest figure on record for May, surpassed only at the height of Covid. May borrowing was £700 million higher than a year earlier, though it was slightly less than the £18 billion most economists had been expecting. The higher borrowing came in spite of a surge in the tax take from national insurance after Chancellor Rachel Reeves increased employer contributions in April. The decision, which was announced in last autumn's budget, has seen wage costs soar for firms across the UK as they also faced a minimum wage rise in the same month. Experts warned the higher borrowing figures raised the chances of tax hikes to come in the budget later this year, with Ms Reeves under pressure to balance the books amid rising borrowing and her spending commitments. Thomas Pugh, economist at audit and consulting firm RSM UK, said he is pencilling in tax increases of between £10 billion and £20 billion. He said: 'The under-performance of the economy and higher borrowing costs mean the Chancellor may already have lost the £9.9 billion of fiscal headroom that she clawed back in March. 'Throw in the tough outlook for many Government departments announced in the spending review and U-turns on welfare spending and the Chancellor will probably have to announce some top-up tax increases after the summer.' Danni Hewson, AJ Bell head of financial analysis, said the borrowing figures 'will only add to speculation that the Chancellor will have to announce more spending cuts or further tax increases at the next budget if she wants to meet her fiscal rules and pay for her spending plans'. 'One big shock could wipe out any headroom Rachel Reeves might have, and there are still question marks about how much of GDP (gross domestic product) should be spent on defence and where the money is going to come from,' she added. Borrowing for the first two months of the financial year to date was £37.7 billion, £1.6 billion more than the same two-month period in 2024, according to the ONS. The data showed so-called compulsory social contributions, largely made up of national insurance contributions (NICs), jumped by £3.9 billion or 14.7% to a record £30.2 billion in April and May combined. Rob Doody, deputy director for public sector finances, said: 'While receipts were up, thanks partly to higher income tax revenue and national insurance contributions, spending was up more, affected by increased running costs and inflation-linked uplifts to many benefits.' While May's borrowing out-turn was lower than economists were expecting, it was more than the £17.1 billion pencilled in by the UK's independent fiscal watchdog, the Office for Budget Responsibility (OBR), in March. The figures showed that central government tax receipts in May increased by £3.5 billion to £61.7 billion, while higher NICs saw social contributions rise by £1.8 billion to £15.1 billion last month alone. Public sector net debt, excluding public sector banks, stood at £2.87 trillion at the end of May and was estimated at 96.4% of GDP, which was 0.5 percentage points higher than a year earlier and remains at levels last seen in the early 1960s. The ONS said the sale of the final tranche of taxpayer shares in NatWest, formerly Royal Bank of Scotland, cut net debt by £800 million last month, but did not have an impact on borrowing in the month. Interest payments on debt, which are linked to inflation, fell £700 million to £7.6 million due to previous falls in the Retail Prices Index (RPI). But recent rises in RPI are expected to see debt interest payments race higher in June. Chief Secretary to the Treasury Darren Jones insisted the Government had 'stabilised the economy and the public finances'. 'Since taking office, we have taken the right decisions to protect working people, begin repairing the NHS, and fix the foundations to rebuild Britain,' he said.
