UK Treasury chief: Tax cuts must wait for inflation to fall
LONDON — (AP) — Britain's Treasury chief said Friday that taming inflation is more important than cutting taxes, resisting calls from some in the governing Conservative Party for immediate tax breaks for businesses and voters. It has since eased but still reached a painful 10.5% in December and is the highest since the 1980s. Prime Minister Rishi Sunak has promised to halve the inflation rate from those levels by the end of the year. The U.K. economy, like others around the world, has been rattled by pandemic restrictions and the shockwaves from Russia's invasion of Ukraine. Most economists agree that Brexit has weighed down the economy by making it harder for U.K.-based businesses to trade with the 27-nation EU.
wftv.comBritish finance minister sticks to tax-hiking plans, pledges post-Brexit reforms
Jeremy Hunt gave a speech Friday to lay out plans for economic growth in the U.K.LONDON — British Finance Minister Jeremy Hunt on Friday signaled he is pushing ahead with tax hikes, while stressing the need to develop Brexit into a "catalyst" for U.K. growth. "The best tax cut right now is a cut in inflation," Hunt said in a speech addressed to tech giants, including Amazon, Google and Meta, as he looks to dispel economic "gloom" in the U.K. Optimism in the U.K. economy has been in "short supply" in recent months, Hunt said. Hunt told companies that they were important for the U.K. outlook, but added that "Britain is vital for your future too" and asked for their help to make the country "the world's next Silicon Valley."
cnbc.comUK inflation eases for a 2nd month, falling to 10.5%
LONDON — (AP) — U.K. inflation eased for a second month in December, boosting confidence that the cost-of-living crisis has peaked. While the drop is welcome, inflation is still running at levels last seen in the early 1980s. U.K. prices are also rising faster than in other major industrialized nations. Inflation soared after Russia’s invasion of Ukraine fueled sharp increases in food and energy prices, eroding savings and living standards. Deutsche Bank expects the U.K. inflation rate to drop by 50% this year and reach the central bank’s target around the middle of 2024.
wftv.comUK to ease financial regulations in post-Brexit shakeup
LONDON — (AP) — Britain is easing banking rules brought in after the 2008 global financial crisis in a bid to attract investment and secure London’s status as Europe’s leading finance center. Treasury chief Jeremy Hunt said Friday that the changes, which follow Britain's departure from the European Union in 2020, will make the U.K. "one of the most open, dynamic and competitive financial services hubs in the world." The package of more than 30 changes includes lifting a cap on bankers’ bonuses and easing capital requirements for smaller lenders. Last year, Amsterdam overtook London as Europe’s largest share-trading hub, though London remains the biggest financial services center overall. The British government at the time was forced to spend billions in taxpayer money to save some banks from collapse.
wftv.comRelief meets fear as UK budget calms economy but brings pain
“The truth is, we just got a lot poorer,” Paul Johnson, director of the Institute for Fiscal Studies think tank, said. Hunt also renounced the central principle touted by Kwarteng and Truss: that lower taxes are the key to economic growth. “Sound money matters more than low taxes,” he said. But some Conservatives grumbled that Hunt was abandoning the right-of-center party’s longstanding commitment to low taxes. “Next spring, we are going to have this perfect storm of energy bills going up, cost of living continuing to rise and energy bills at their peak,” Lewis told radio station LBC.
wftv.comUK push to restore finances means higher taxes, energy bills
LONDON — (AP) — Millions of British people face higher taxes and steeper energy bills after the government announced an emergency budget on Thursday aimed at restoring the country’s economic credibility and shoring up its battered public finances. Hunt acknowledged he was delivering “a substantial tax increase,” with measures that include higher taxes on top earners and levies on some businesses. Hunt said the taxes combined would raise 14 billion pounds next year. Opposition Labour Party economy spokeswoman Rachel Reeves dismissed the budget as “more taxes, more inflation, higher mortgages." But resources are limited, with Sunak facing a shortfall of at least 40 billion pounds ($47 billion).
wftv.comUK boosts windfall energy tax as it seeks to balance budget
Hunt said the taxes combined would raise 14 billion pounds next year, expanding a levy passed earlier this year that was limited to profits made from extracting U.K. oil and gas. Two quarters of economic contraction is a long-held informal definition of recession, and the one the U.K. uses. But resources are limited, with Sunak facing a budget shortfall of at least 40 billion pounds ($47 billion). U.K. public debt ballooned to almost 83% of economic output in 2017 from less than 36% in 2007 as the government bailed out banks and struggled to bolster the economy. But some economists caution against moving too fast to reduce government debt at a time when rising food, energy and housing costs are set to wipe out the savings of a fifth of British households.
wftv.comUK pledges to help vulnerable during cost-of-living crisis
LONDON — (AP) — U.K. Treasury chief Jeremy Hunt has pledged help to the most vulnerable weather Britain’s cost-of-living crisis, even as he announced a raft of spending cuts and tax increases designed to mend the country’s battered finances. Hunt promised Thursday to spend billions pounds on programs including welfare benefits, government pensions and help for low-income residents struggling to pay their energy bills. Britain’s inflation rate accelerated to 41-year high in October, fueling calls for the government to do more to ease the impact of rising food, energy and housing prices. Two quarters of economic contraction is a long-held informal definition of recession, and the one the U.K. uses. “We are on benefits, but it’s hard to provide for two children without help," Prosenic said.
wftv.comUK increases windfall tax on profits of oil, gas companies
He said the taxes combined would raise 14 billion pounds next year. Prime Minister Rishi Sunak, a former Treasury chief, introduced a 25% energy profits levy earlier this year but that was limited to profits made from extracting U.K. oil and gas. Hunt expected to announce 30 billion pounds ($36 billion) in spending cuts and 24 billion pounds in tax increases, British media reported. He is likely to announce an expansion of a tax on the windfall profits of energy companies to help consumers grappling with higher natural gas and electricity bills. But resources are limited, with Sunak facing a budget shortfall of at least 40 billion pounds ($47 billion).
wftv.comUK to unveil spending plan amid big demands but little cash
“Today’s statement will help deliver the long-term stability this country needs,” Sunak promised in a promotional video released ahead of the statement. Treasury chief Jeremy Hunt will deliver the plan for tackling a sputtering economy in a speech to the House of Commons. He is expected to announce 30 billion pounds ($36 billion) in spending cuts and 24 billion pounds in tax increases, British media reported. But resources are limited, with Sunak facing a budget shortfall of at least 40 billion pounds ($47 billion). For 5 pounds, people can buy 20 items of fresh fruit, vegetables and essential items like tinned beans and pasta.
wftv.comUK unveils emergency budget amid big demands but little cash
Treasury chief Jeremy Hunt will deliver the government’s plan for tackling a sputtering economy in a speech to the House of Commons on Thursday. Hunt is expected to announce 30 billion pounds in spending cuts and 24 billion in tax increases, the BBC and other British media reported. Welfare recipients and pensioners also are looking for higher payments, and low-income families are calling for an expansion of the free school lunch program. But resources are limited, with Sunak facing a budget shortfall of at least 40 billion pounds ($47 billion) that he says will require both tax increases and spending cuts to close. For 5 pounds, people can buy 20 items of fresh fruit, vegetables and essential items like tinned beans and pasta.
wftv.comUK inflation accelerates to 41-year high of 11.1%
LONDON — (AP) — Britain’s inflation rate rose to a 41-year high in October, fueling demands for the government to do more to ease the nation’s cost-of-living crisis when it releases new tax and spending plans on Thursday. Higher prices for food and energy drove Britain’s inflation rate to the highest since October 1981, the ONS said. “We cannot have long-term, sustainable growth with high inflation," Hunt said after the inflation figures were released. The Bank of England earlier this month forecast that U.K. inflation would peak at around 11% in the fourth quarter and begin falling early next year. But U.K. inflation has yet to peak.
wftv.comUK inflation rises to 41-year high at 11.1%
LONDON — (AP) — Britain’s inflation rate rose to a 41-year high in October, fueling demands for the government to do more to ease the nation’s cost-of-living crisis when it releases new tax and spending plans on Thursday. Consumer prices rose 11.1% in the 12 months through October, compared with 10.1% in September, the Office for National Statistics said Wednesday. Higher prices for food and energy drove October’s inflation rate to the highest since October 1981, the ONS said. The U.S. inflation rate fell to 7.7% in October from 8.2% in September. This material may not be published, broadcast, rewritten or redistributed without permission.
wftv.comUK’s self-billed 'Scrooge' promises tax rises, spending cuts
LONDON — (AP) — Britain’s Treasury chief warned Sunday of a coming spending crunch and tax increases for cash-strapped Britons as he bids to fill the “black hole” in the country’s finances. He told British broadcasters that he was determined to make an expected recession as shallow as possible, and warned that everyone could expect to pay more tax. According to the Resolution Foundation, a think tank, Truss and Kwarteng blew 20 billion pounds on unfunded cuts to national insurance and stamp duty, with a further 10 billion lost to higher interest rates and Government borrowing costs. Hunt said he would continue his predecessor's pledge to help Britons with soaring energy bills, but added government departments could expect to see cuts. Earlier he told The Sunday Times in an interview “I’m Scrooge who’s going to do things that make sure Christmas is never canceled.”Copyright 2022 The Associated Press.
wftv.comUS futures in decline after three days of gains
The Dow Jones industrials fell 0.1%, while futures for the benchmark S&P gave up 0.8%. Microsoft fell about 6% in premarket trading after it reported a double-digit profit decline for the July-September quarter compared to the same time last year. Sydney's S&P-ASX 200 rose 0.2% to 6,810.90 after the government reported Australian inflation rose to 7.3% in the three months ending in September. New Zealand and Southeast Asian markets rose. In energy markets, benchmark U.S. crude gained 93 cents to $86.25 per barrel in electronic trading on the New York Mercantile Exchange.
wftv.comUK Treasury chief delays detailing new economic plans
The economic statement was originally set to be announced on Halloween. “But it’s also extremely important that that statement is based on the most accurate possible economic forecasts and forecasts of public finances." The timing of the statement means that the Bank of England will deliver its ruling on interest rates before the government details its new economic plan. In taking charge on Tuesday, Sunak pledged to tackle economic issues head on. He announced he would retain Hunt, who had been appointed by Truss to steady the markets two weeks ago.
wftv.comUK leader Sunak faces opposition in Parliament for 1st time
LONDON — (AP) — British Prime Minister Rishi Sunak is holding the first meeting of his new Cabinet before facing the opposition in Parliament on Wednesday for the first time as leader. Sunak is seen by Conservatives as a safe pair of hands they hope can stabilize an economy sliding toward recession — and stem the party's plunging popularity. Sunak brought in people from different wings of the Conservative Party for his Cabinet. He faces a backlash for reappointing Home Secretary Suella Braverman, who resigned last week after breaching ethics rules by sending a sensitive government email from a private account. The government has not confirmed whether Hunt’s statement, due on Oct. 31, will be delayed because of the change of prime minister.
wftv.comNew UK leader to face highest government debt in 60 years
That’s higher than at any point since 1963, when Britain was still paying off debts accumulated during World War II. Interest payable on the government’s debt rose to 7.7 billion pounds in September, or about 2.5 billion pounds more than during the same month last year, the ONS said. That was due primarily to rising payments on inflation-linked bonds, which are pegged to the retail prices index. The retail prices index tends to be higher than the consumer prices index because of differences in the way the two numbers are calculated. Government borrowing increased to 20 billion pounds in September, 2.2 billion pounds more than in September 2021 and 5.2 billion pounds more than forecast in March by the independent Office for Budget Responsibility, the ONS said.
wftv.comEXPLAINER: Why was Truss' tenure so short -- and now what?
LONDON — (AP) — British Prime Minister Liz Truss took office last month with hopes and promises of reinvigorating the British economy and putting it on the path to long-term success. The disarray surrounding the economic plan weakened Truss’s authority as prime minister, and ultimately led to her decision to resign on ThursdayWHAT HAPPENS NOW? The party says it will select a new leader and prime minister by Oct. 28. Truss will remain prime minister until then. The first challenge will come just days after the new prime minister takes office, when Hunt delivers his fiscal plan to the House of Commons on Oct. 31.
wftv.comUK Treasury chief in position of power as PM Truss struggles
As British Prime Minister Liz Truss struggles to retain her authority, one man is seen to be in the real position of power to restore order and credibility to the Conservative government and limit the damage caused by Truss’ economic plans.
New UK Treasury chief: Mistakes were made, tax rises coming
Britain’s new Treasury chief has acknowledged mistakes made by his predecessor and suggested that he may reverse much of Conservative Prime Minister Liz Truss’ tax-cutting plans, in order to bring stability to the country after weeks of economic and political turbulence.
UK eyes traveler quarantine as virus toll passes 100,000
Britain's Prime Minister Boris Johnson reacts while leading a virtual press conference on the Covid-19 pandemic, inside 10 Downing Street in central London Tuesday Jan. 26, 2021. The government said 100,162 people have died in the pandemic after testing positive for the virus, including 1,631 new deaths reported Tuesday. U.K. statistics agencies say that the number of deaths registered that mention COVID-19 on the death certificate is more than 108,000. British authorities are banking on a successful vaccination program to help the country suppress the outbreak and ease the lockdown. People arriving in the U.K. from abroad also must show they have tested negative for COVID-19.