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Daily Mail
a day ago
- Business
- Daily Mail
Rachel Reeves forced to correct string of gaffes
Rachel Reeves has been forced to correct the official record after she got her facts about a flagship pension reform wrong, underestimated the unemployment rate and confused the name of a Northern town earmarked for a major tram network extension. The Chancellor, who has previously had to amend her profile on social networking site LinkedIn after overstating her qualifications as an economist, made the string of errors at a recent grilling by peers over her handling of the public finances. It prompted shadow business secretary Andrew Griffith to accuse her of a 'shocking grasp of detail'. And it came as Reeves prepares to unleash another volley of tax rises later this year that experts say will further strangle anaemic growth. In one exchange with former Chancellor Lord Lamont, Reeves twice claimed the £425 billion Local Government Pension Scheme was managed by '96 administering authorities' which she wants to cut to 'eight pools'. 'We are going to consolidate local government pensions, because we want them to work better for savers and taxpayers,' she added, flanked by two senior Treasury officials. But the LGPS is managed by 86 local authorities, not 96, while the number of pools is being cut from eight to six under controversial new laws that will force two of them covering the Tory shires of southern England to find new homes by March. After being contacted by The Mail on Sunday, Treasury officials corrected Hansard, Parliament's written record of debates. They were also forced to clarify to the House of Lords Economic Affairs committee that when Reeves told peers the unemployment rate was 'just over 4 per cent', the latest figure from the Office for National Statistics was closer to 5 per cent – at 4.7 per cent. Griffith told The Mail on Sunday: 'When she's writing such big cheques with taxpayers' money, it's no time to be loose with your numbers.' The Chancellor's geography also escaped her at the hearing, which took place three weeks after her tearful appearance before MPs during Prime Minister's questions. Reeves, who represents a constituency in Leeds, told peers that the Greater Manchester tram network was being extended to 'Bury and somewhere else'. In fact Bury already has a tram stop. The planned extension will go to Stockport, more than 20 miles away. Bury station is being upgraded but the work was 'not an extension to the metro line', Treasury officials admitted. The latest revelations about Reeves's lack of attention to detail come as she prepares to fill a hole of up to £50 billion in the public finances in her Autumn Budget . She has ruled out tax rises on 'working people' – namely income tax , VAT and employee National Insurance – but left the door open to raids on inheritance tax , pensions, gambling companies and banks. Reeves could also extend the freeze on income tax thresholds to help balance the books. The pause is due to end in 2028, from which point the thresholds are set to rise with inflation . But keeping the freeze for another two years would generate more cash for the Treasury, as rising wages and pensions pull more people into higher tax bands. Extending the stealth tax, known as 'fiscal drag', could raise £8 billion, claims the Resolution Foundation think-tank. Experts say she boxed herself in by also pledging to stick to her fiscal rules, which include only borrowing to invest by the end of this Parliament. Key to how much money she needs to find is how the official forecaster judges likely productivity growth – the rate of hourly output per worker. Reeves will have to find even more money if the Office for Budget Responsibility cuts its forecast for productivity growth, which it has consistently overestimated.
Daily Mail
3 days ago
- Business
- Daily Mail
Chancellor is forced to correct string of gaffes
Rachel Reeves has been forced to correct the official record after she got her facts about a flagship pension reform wrong, underestimated the unemployment rate and confused the name of a Northern town earmarked for a major tram network extension. The Chancellor, who has previously had to amend her profile on social networking site LinkedIn after overstating her qualifications as an economist, made the string of errors at a recent grilling by peers over her handling of the public finances. It prompted shadow business secretary Andrew Griffith to accuse her of a 'shocking grasp of detail'. And it came as Reeves prepares to unleash another volley of tax rises later this year that experts say will further strangle anaemic growth. In one exchange with former Chancellor Lord Lamont, Reeves twice claimed the £425 billion Local Government Pension Scheme was managed by '96 administering authorities' which she wants to cut to 'eight pools'. 'We are going to consolidate local government pensions, because we want them to work better for savers and taxpayers,' she added, flanked by two senior Treasury officials. But the LGPS is managed by 86 local authorities, not 96, while the number of pools is being cut from eight to six under controversial new laws that will force two of them covering the Tory shires of southern England to find new homes by March. After being contacted by The Mail on Sunday, Treasury officials corrected Hansard, Parliament's written record of debates. They were also forced to clarify to the House of Lords Economic Affairs committee that when Reeves told peers the unemployment rate was 'just over 4 per cent', the latest figure from the Office for National Statistics was closer to 5 per cent – at 4.7 per cent. Griffith told The Mail on Sunday: 'When she's writing such big cheques with taxpayers' money, it's no time to be loose with your numbers.' The Chancellor's geography also escaped her at the hearing, which took place three weeks after her tearful appearance before MPs during Prime Minister's questions. Reeves, who represents a constituency in Leeds, told peers that the Greater Manchester tram network was being extended to 'Bury and somewhere else'. In fact Bury already has a tram stop. The planned extension will go to Stockport, more than 20 miles away. Bury station is being upgraded but the work was 'not an extension to the metro line', Treasury officials admitted. The latest revelations about Reeves's lack of attention to detail come as she prepares to fill a hole of up to £50 billion in the public finances in her Autumn Budget. She has ruled out tax rises on 'working people' – namely income tax, VAT and employee National Insurance – but left the door open to raids on inheritance tax, pensions, gambling companies and banks. Reeves could also extend the freeze on income tax thresholds to help balance the books. The pause is due to end in 2028, from which point the thresholds are set to rise with inflation. But keeping the freeze for another two years would generate more cash for the Treasury, as rising wages and pensions pull more people into higher tax bands. Extending the stealth tax, known as 'fiscal drag', could raise £8 billion, claims the Resolution Foundation think-tank. Experts say she boxed herself in by also pledging to stick to her fiscal rules, which include only borrowing to invest by the end of this Parliament. Key to how much money she needs to find is how the official forecaster judges likely productivity growth – the rate of hourly output per worker. Reeves will have to find even more money if the Office for Budget Responsibility cuts its forecast for productivity growth, which it has consistently overestimated. Productivity growth stalled in the second quarter, heaping pressure on the OBR to act. A downgrade would have 'very significant fiscal implications that far exceed the policy U-turns on welfare spending,' said Simon French at stockbroker Panmure Liberum.
Yahoo
12-08-2025
- Business
- Yahoo
UK job market continues to weaken as vacancies fall
The number of job vacancies and payrolled employees in the UK have continued to fall, according to the Office for National Statistics (ONS), adding to evidence of a cooling labour market. ONS data released on Tuesday showed that the number of job vacancies in the UK fell by 44,000 in the three months to July. The number of employees on the payroll in June was down by 26,000 on the month, which was more than a decline of 25,000 in May. Estimates for payrolled employees in the year to June fell by 149,000. Early estimates for the number of employees on the payroll in July fell by 8,000 on the month and 164,000 on the year. The unemployment rate was 4.7% from April to June, unchanged from the previous three months. Annual wage growth excluding bonuses was at 5% in April to June, which was also the same as the previous three months. Employers have faced higher labour costs after the rate of their national insurance contributions and the national minimum wage rose in early April, which were changes announced by chancellor Rachel Reeves in the autumn budget. Read more: Over 3.6 million UK investors to pay dividend tax Liz McKeown, director of economic statistics at the ONS, said: "Taken together, these latest figures point to continued cooling of the labour market." "The number of employees on payroll has now fallen in ten of the last twelve months, with these falls concentrated in hospitality and retail." "Job vacancies, likewise, have continued to fall, also driven by fewer opportunities in these industries," she added." Labour market data is closely watched by the Bank of England (BoE), as it tries to balance keeping inflation under control, while also avoiding a slowdown in the labour market. The BoE cut interest rates last week to 4% from 4.25%, marking its fifth cut in a year. Read more: What having children later in life means for your money UK high street footfall suffers as consumers spend on leisure instead Rachel Reeves is under pressure to balance the books. This chart shows the scale of UK debtSign in to access your portfolio
Yahoo
31-07-2025
- Business
- Yahoo
The US job market may be running low on gas
The US job market seems to have chugged along for the first half of this year — but the risk is rising that employment growth is running out of steam. The July jobs report, due for release at 8:30 a.m. ET Friday, is expected to show a net gain of 115,000 jobs, which would mark a considerable downshift from June's 147,000 jobs. The unemployment rate is expected to tick up to 4.2% from 4.1%, according to FactSet consensus estimates. Through June, the US has added between 102,000 and 158,000 jobs per month, Bureau of Labor Statistics data shows. Those are solid gains and widely thought to be in line with the breakeven point, where the jobs added keep up with labor force growth and hold the unemployment rate steady. However, outside of the pandemic recession in 2020, that current 130,000-jobs-per-month pace is the weakest January-to-June average since 2010, when the US economy was licking its wounds from the Great Recession. 'We're getting more and more reliant on a very small part of the economy to drive any sort of job growth,' Heather Long, chief economist for Navy Federal Credit Union, said in an interview with CNN. 'There just are no jobs right now, AI or no AI, tariffs or no tariffs.' Hiring has become anemic (with the exception of a select few industries). Businesses have held back on adding new workers in large part because they've been gripped by uncertainty about where tariffs might ultimately settle in President Donald Trump's volatile trade war. 'When companies can't make predictions about the economy and therefore their operations, they tend to wait for more information,' Elizabeth Renter, senior economist at NerdWallet, wrote earlier this week. 'In the current environment, that predictive information is changing from week to week, so we've ended up in a perpetual holding pattern when it comes to expanding or cutting back on workers.' Couple that with reticent workers discouraged about their job-hopping prospects, and it results in a labor market with little turnover, instead of the solid churn that's needed for a healthy economy. What the recent data shows about job loss The latest federal data on labor turnover, which was released earlier this week, further confirmed that trend: The Job Openings and Labor Turnover Survey showed fewer job openings in June, hiring at a one-year low and a quits rate below the five-year average. Other closely watched indicators show that layoff activity hasn't accelerated recently, despite job cut announcements trending higher this year (in large part due to the Trump administration's gutting of federal agencies). Initial jobless claims have fallen for six weeks in a row; however, continuing unemployment claims have consistently butted against a November 2021 high. In terms of what could be coming down the pike, Challenger, Gray & Christmas' latest job cut announcement tracker showed 62,075 layoffs announced in July, up 29% from June. 'We are seeing the federal budget cuts implemented by [the Department of Government Efficiency] impact nonprofits and health care in addition to the government,' said Andrew Challenger, senior vice president of the outplacement and coaching business. 'AI was cited for over 10,000 cuts last month, and tariff concerns have impacted nearly 6,000 jobs this year.' The unemployment rate went down in June but so did the size of the labor force, and participation rates fell off as well. The unemployment rate is a critical indicator of economic health; however, in part due to seismic shifts around immigration, it's losing its luster and instead turning into a math problem. Foreign-born workers, irrespective of legal status, have accounted for about three-quarters of total labor force growth since February 2020, according to an analysis released in June from Wells Fargo economists. And recent efforts to curtail unauthorized immigration are contributing to a shrinking of the labor force, they noted. Health care and education drive gains Job growth tends to slow in the summer months and at the turn of some firms' fiscal years, but the US labor market is also in the thick of a structural slog, with job gains overwhelmingly concentrated in a fraction of industries. 'The job market is frozen outside of health care and education, and this is a real hardship for anyone looking for a job,' said Navy Federal Credit Union's Long. The average duration of unemployment rose to 23 weeks in June, and the share of unemployed workers who have been out of a job for 27 weeks or more rose to 23.3%, edging near a three-year high, according to BLS data. In June, health care, social assistance and state and local government businesses — which account for under 15% of overall employment — were responsible for 94% of the month's job gains, BLS data shows. It's worth noting that there likely were some anomalies in the estimated gains for state and local government entities in June (they were clocked at +80,000). Education jobs typically fall in the summer months, but the drop-off this year might not have been as sharp as years past, so the BLS' seasonal adjustment factors registered that as a strong gain instead, economists noted last month. The expectation is that health care, social assistance and leisure and hospitality will drive the job gains in July. June's diffusion index of private industries, which measures the share of sectors adding jobs (essentially providing a window into how broad-based hiring was), measured 49.6. If the measure is below 50, then more industries lost jobs than added them. The K-shaped economy is back While some tariff-related price hikes are starting to appear online and in stores (and they're starting to bear out a little in the inflation data as well), the biggest impact they've had on the labor market so far is the uncertainty they've caused. In terms of reasons for drags on the labor market, Long puts tariff-related uncertainty as the clear No. 1, followed by a continued post-pandemic normalization and rebalancing of workforces, and then at a far third (for now) the AI effect. Wages have continued to outpace inflation, but the events of the recent months have kept the Federal Reserve on pause and brought the return of the 'K-shaped economy,' where the have-nots are struggling and an upper slice of the haves is driving most of the growth. 'People are really stretched thin,' Long said, adding that continued weakness in the labor market could negatively compound ongoing stressors such as growing household debt. 'There simply is not much hiring, white-collar or blue-collar,' she said. 'I'm hopeful that will change if we can get tariff certainty by the end of the summer and a rate cut by September,' she said. Sign in to access your portfolio
Yahoo
11-07-2025
- Business
- Yahoo
Canada's economy added 83K jobs in June, defying expectations
Canada's labour market added a net 83,100 jobs in June and the unemployment rate dropped to 6.9 per cent, according to Statistics Canada data released on Friday. Financial industry experts had expected the job market to stay essentially flat last month, forecasting a net loss of 3,000 jobs, according to consensus estimates published by the Bank of Montreal. Expectations were for the unemployment rate to increase 0.1 percentage point to 7.1 per cent. Friday's data come in the shadow of renewed volatility in the Canada-U.S. trade relationship, after U.S. President Donald Trump threatened new tariffs late Thursday. The data also follow stagnant job numbers for May, with 8,800 jobs gained that month. The unemployment rate rose 0.1 percentage point to seven per cent in May. In a note published on July 4, Royal Bank of Canada economists Nathan Janzen and Claire Fan said they expect Canada's labour market should soon be reaching its low point, "with the unemployment rate peaking not far from where it is today." Domestic demand has held up, and the worst-case trade war scenarios "look less likely than they did a few months ago," they wrote, with business confidence improving and some hiring indicators showing stability. The employment numbers will be among new data under consideration by the Bank of Canada (BoC) ahead of its July 30 interest rate announcement. CIBC chief economist Avery Shenfeld wrote on Monday that "the steady drumbeat of higher unemployment in Canada" — the unemployment rate was 6.6 per cent in January — makes it more challenging for the BoC to justify holding rates steady. This story will be updated. John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on X @jmacf. Download the Yahoo Finance app, available for Apple and Android. 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
