Reeves to ditch income tax hike in UK budget; China suffers slowdown in factory output – business live | Business
important events
Sterling, FTSE 100 fall due to budget fluctuations
pound It fell about 0.5% against the dollar to $1.3129 and weakened against the euro.
Meanwhile FTSE100 It lost around 1.1% as its listed banks (mostly at the vanguard of the UK economy) slumped.
Barclays, Lloyds And NatWesThey were all down 3.1-3.5% after the market opened.
UK gilt yields soar as investors digest Reeves income tax
We’re experiencing some movement in the market as investors digest the change in income tax plans ahead of Rachel Reeves’ fall budget.
Return in the bond market, 30 years of England’s gilding like that 12 basis points increase, It suggests that there is an increased perception of risk to the financial position.
yield on 20 years gildedMeanwhile, it was sitting at 5.225%. plus 12 basis points increase that day
Reuters says this is shaping up to be the worst day of a long rally since July 2, when Reeves’ tearful appearance in parliament spooked investors.
Culture Secretary Lisa Nandy It influenced the Chancellor’s plan this morning to introduce an income tax rise contrary to the manifesto.
Nandy told Sky News: Rachel Reeves He is “entirely focused on the public interest,” but added that it would not be “helpful or accurate” to speculate about what is in the Nov. 26 budget.
Asked whether the latest reported U-turn made it seem like the Labor government didn’t know what it was doing, Nandy said:
I have known the Chancellor very well for 15 years, and I can say that he is solely and fiercely focused on the challenges facing the country and doing what is in the country’s best interests.
He never hesitated to confront people in opposition and government to do this.
Over the past few weeks, obviously, I’ve had a number of discussions with him and his team about measures in the budget that might affect my department, proposals that we’ve made, and debates that normally take place across government, and in each of those discussions, his absolute focus has been on the public interest.
Introduction: Reeves backs off income tax increase; China sees further slowdown in factories
Good morning; Welcome to our in-depth coverage of business, financial markets and the world economy.
We start the day with the Labor government’s U-turn. Chancellor Rachel Reeves It is preparing to abandon its plan to increase income tax in the November 26 budget.
The Chancellor had previously notified the budget watchdog of his plans to raise income tax; This violated one of Labour’s most important manifesto promises. However, the Guardian has since confirmed that these major measures have been scrapped.
The Financial Times, which first broke the story, reported that Reeves could instead look at the thresholds at which people pay tax (which would likely be seen as secret income tax increases).
However, Reeves is now likely to have to rely on a series of small tax rises to fill the multibillion-pound “gap” in the public finances triggered by weak productivity and U-turns on other policies, including winter fuel discounts and cuts to disability benefits.
On the other side of the world, Chinese It comes as a shock as newly released data showed factory production and retail sales grew at the weakest pace in more than a year in October.
Industrial production rose 4.9% year-on-year in October, recording the weakest annual growth rate since August 2024, according to China’s National Bureau of Statistics (NBS). This was below the 6.5% increase in September and behind the 5.5% predicted in a Reuters poll.
Meanwhile, retail sales, a key sign of consumer confidence and spending, rose 2.9% last month; This also marked the worst increase since August last year, below the 3.0% increase in September.
Facing greater risks from the trade war with the United States and weak domestic demand, the figures will put more pressure on policymakers in Beijing to do more to support China’s export-led economy.
In addition to the agenda items below, we also expect a second quarter update from Jaguar Land Rover this morning. Stay tuned!
