All posts tagged: UK economy

UK borrowing costs hit 19-year high as global bond rout intensifies – latest updates

UK borrowing costs hit 19-year high as global bond rout intensifies – latest updates

Published by Sam Flores

This remained around the 5pc mark late on Tuesday, while the 20-year and 30-year yields reached 5.41pc and 5.37pc, respectively. The Bank of England is forecast to keep rates on hold at its next meeting on Thursday but traders are betting rates will rise from 3.75pc to 4pc in November, days after Chancellor John Healey’s first Budget. Homeowners face higher rates because of the bond market turmoil, as major lenders reprice residential and buy-to-let mortgages, according to experts. Rohit Kohli, director at The Mortgage Stop, said “this is being driven by the bond markets” and warned that “gilts and swaps aren’t kind to borrowers”. Craig Fish, Director at Lodestone Mortgages, said while borrowers with large deposits can still find rates around 4.5pc to 4.6pc, “that window is narrowing by the week”.  He added that “until swap rates settle, expect rates to keep drifting up, not down”. Economists have warned that the Bank of England, the Federal Reserve and other central banks are at risk of a “self-reinforcing” cycle of rate rises and higher bond yields. …

Triple lock to boost pensions by 3.9pc as Reynolds refuses to rule out tax raid

Triple lock to boost pensions by 3.9pc as Reynolds refuses to rule out tax raid

Published by Sam Flores

The Business Secretary refused four times to rule out retirees paying tax on the state pension from next year. Jonathan Reynolds declined to reassure pensioners that they would not pay income tax on the benefit for the first time, saying it was a question for the Chancellor. The comments on Tuesday raised concern for millions of retired people expecting to see their state pension surpass £13,000 from April, forcing them to pay income tax. However, pensions minister Torsten Bell later insisted Labour would not put up taxes on people who rely on the state pension. It is still unclear how this will be implemented given the complexity of separating the tax arrangements of different groups of pensioners. The rise under the triple lock guarantee would drag many pensioners into paying income tax for the first time because their state income would surpass the personal allowance of £12,570. Rachel Reeves, the former chancellor, said last year that people solely reliant on the state pension would not have to pay the tax. However, Mr Reynolds was repeatedly …

Borrowing cost surge leaves Healey with £10bn headache – latest updates

Borrowing cost surge leaves Healey with £10bn headache – latest updates

Published by Sam Flores

Mortgage approvals slumped to their lowest level in July in more than two and a half years, as high borrowing costs weigh on the housing market. New figures from the Bank of England show that only 56,100 mortgages were approved in July, down from 58,200 in June.  This is the lowest number since January 2024, when only 56,032 mortgages were approved.  It comes as the war in Iran and jitters in global bond markets have pushed up borrowing costs, making it more costly for families to take out a mortgage.  Nationwide research also shows that house prices fell by more than £1,000 between July and August, though the bank said that once adjusting for seasonality it represented a 0.2pc rise.  Prices are up 1.6pc on the year. The figures suggest high borrowing costs are keeping a lid on the market, but a lack of available homes is preventing further falls.  Experts said it underlined that Britain’s housing market is “stuck in the slow lane”.  Anthony Codling at RBC Capital Markets said: “Geopolitical tensions in the Middle East are keeping energy prices …

Andy Burnham is basking in limelight – while a global crisis closes in | Personal Finance | Finance

Andy Burnham is basking in limelight – while a global crisis closes in | Personal Finance | Finance

Published by Sam Flores

I don’t begrudge him a little fun. He’s finally got the job he’s chased for years. Good luck to him. The country seems relieved too. Mostly because he’s not Keir Starmer. We finally have a leader who speaks like a human being rather than an AI chatbot that’s only been fed 300 words. But the soft launch is over. Burnham’s the PM now. Being chatty and blokey only gets you so far. Especially when a looming international crisis could wash away the feelgood factor overnight. And that’s the part he doesn’t seem to have noticed. Burnham is busy talking about social care, bus fares and devolution. But they’re not the biggest threat facing Britain today. He’s inherited a slowing economy, runaway debt, rising gilt yields, an ageing population, ballooning state spending, spiralling youth unemployment, illegal migration and a defence funding black hole. And every one of those problems will get dramatically worse if Donald Trump fails to end the Iran war. And quickly. So far, markets have largely shrugged off the latest Middle East crisis. …

China chip breakthrough triggers global tech rout

China chip breakthrough triggers global tech rout

Published by Sam Flores

Global tech stocks have plunged after China achieved a breakthrough in developing technology crucial to the AI boom. Trading was briefly halted on South Korea’s benchmark Kospi index after it suffered a collapse of nearly 11pc overnight in a worldwide sell-off of semiconductor companies, following a bleak day on Wall Street. The downturn was triggered by reports that China had begun mass-producing machinery critical to the manufacture of advanced microchips used for AI. China’s chip giant Shanghai Yuliangsheng has started production of so-called lithography machines, according to tech publication The Information. These machines are roughly the size of a double-decker bus and use high-powered lasers to imprint designs on to silicon wafers, which are used to make chips. Until now, this technology was dominated by Western chip giants. The company is expected to deliver the machines to leading Chinese chipmakers later this year. Jing Jie Yu, an analyst at Morningstar, said: “We believe the market was likely spooked by the progress of China’s chipmaking equipment capabilities, and was worried that this progress would threaten the …

Rachel Reeves left economy in ‘dire straits’ with unemployment high | Politics | News

Rachel Reeves left economy in ‘dire straits’ with unemployment high | Politics | News

Published by Sam Flores

Chancellor John Healey has inherited an economy in “dire straits” from predecessor Rachel Reeves, with unemployment stubbornly high, the Tories have warned. Britain’s overall rate of unemployment held steady at 4.9% in the three months to May, figures from the Office for National Statistics (ONS) showed. The number of workers on UK payrolls fell by a better-than-feared 4,000 between May and June to 30.3 million. Job vacancies have fallen back further, as under-pressure small businesses rein in hiring in the face of rising costs and higher wage bills. There were 7,000 fewer vacancies in the quarter to June, at 712,000, following a 19,000 drop in the previous three months. This was driven by smaller businesses, which saw vacancies fall 8,000, though this was partially offset by an increase among medium-sized firms, the ONS said. Andrew Griffith, the Shadow Business Secretary, said: “Today’s figures do not change the fact that the latest Labour Chancellor has inherited an economy in dire straits. “The Employment Rights Act is already increasing costs and complexity for employers, and risks choking …

Andy Burnham has raised fears he could choke the economy with even mor | Politics | News

Andy Burnham has raised fears he could choke the economy with even mor | Politics | News

Published by Sam Flores

Andy Burnham (Image: Getty) Andy Burnham has raised fears he could choke the economy with even more tax rises as figures showed growth already stalling. Official data revealed that GDP grew just 0.1% in May as it continues to flatline. The grim numbers came after the Prime Minister-in-waiting admitted he might “ask for a little more” from people, even though the tax burden is hurtling towards record levels. The warning comes as Mr Burnham is due to be anointed as Labour leader today (Fri). He will enter No 10, replacing Sier Starmer, on Monday. Writing exclusively in the Express, Shadow Chancellor Sir Mel Stride said: “Rachel Reeves said economic growth was her ‘number one mission’. She failed. “Two years of higher taxes have squeezed families, workers, businesses and investors alike, leaving Britain with record tax levels but precious little growth to show for them. “The worrying thing is that Andy Burnham appears ready to double down. “Burnham has already made a string of expensive spending promises, from the biggest council house building programme since the …

POLL: Should Nigel Farage be knighted for Brexit? | Politics | News

POLL: Should Nigel Farage be knighted for Brexit? | Politics | News

Published by Sam Flores

Farage continues to be synonymous with Brexit (Image: Getty) Nigel Farage has accused British political leaders of failing to understand the “forgotten places” across the country which had wanted a “fairer deal” for the UK when they voted for Brexit. The Reform UK leader is seen as the protagonist of Britain’s withdrawal from the European Union and was speaking on the 10th anniversary of the seismic referendum result. The decision to leave the union has split the UK ever since, with many of the supporters of the decision, praising the former member of the European Parliament, for helping the country reclaim its “sovereignty.” Some have even called for the controversial politician to be knighted for his efforts in the UK’s withdrawal. Others, however, hold him responsible for the ills of the British economy throughout the 2020s, with the Office for Budget Responsibility (OBR) estimating that Brexit will ultimately leave UK trade about 15% lower and the economy around 4% smaller than it would have been inside the EU. So what do you think? Vote in …

Oil tumbles as Trump says Iran war is in its ‘final stages’ – latest updates

Oil tumbles as Trump says Iran war is in its ‘final stages’ – latest updates

Published by Sam Flores

Thanks for joining me. Inflation has fallen to its lowest level in more than a year after a drop in the energy price cap outweighed the oil shock from the Iran war. The consumer prices index (CPI) fell to 2.8pc in April, according to the Office for National Statistics (ONS), after Ofgem reduced annual household energy bills by £117. Economists fear the larger than expected fall in inflation is a false dawn before a surge in prices later this year linked to the conflict in the Middle East. Petrol prices on Tuesday hit their highest level since the start of the war, having risen by more than 25p a litre since February. Inflation accelerated to 3.3pc in March after the outbreak of the war, which has sent oil and gas prices soaring after exports through the Strait of Hormuz were effectively cut off. However, CPI slowed in April to its lowest level since March last year after the Chancellor took some green levies out of household bills, allowing Ofgem to reduce its price cap. Electricity …

GB News halted for bombshell announcement – and it’s bad news for Keir Starmer | TV & Radio | Showbiz & TV

GB News halted for bombshell announcement – and it’s bad news for Keir Starmer | TV & Radio | Showbiz & TV

Published by Sam Flores

Presenters Alex Armstrong and Ellie Costello had to halt this morning’s instalment of GB News to deliver an update from the Office for National Statistics – and it’s a blow for Sir Keir Starmer. Armstrong began: “Some breaking news this morning, the Office for National Statistics have said the national regular earnings growth fell to 3.4% in the three months to March.” Costello added: “Well, that was 0.3% higher after taking consumer prices index inflation into account.” Their guest, Fraser Myers of Spiked Online, said: “Well, you have heard the government crowing about its economic success – Rachel Reeves says stick to the plan. But actually, people are struggling. Any increase in earnings is being eroded by inflation – inflation is higher.” “Growth feels like it is on a lower trajectory, people are struggling, and the current plan isn’t working,” he added. Armstrong claimed our nation “will have higher bills” and added: “The government will be wondering, ‘What are we going to do? We are going to have to raise taxes again.” The Office for …