Latest news with #UKeconomy
Telegraph
2 days ago
- Business
- Telegraph
Labour voters back plans to stop wealthy non-doms fleeing Britain
Labour voters would back plans to stop ultra-wealthy individuals fleeing the UK after Rachel Reeves's tax raid prompted thousands to leave. On Tuesday, research published by think tank Onward found that nearly three-quarters (69pc) of Labour supporters would back the Government if it exempted the richest from some taxes in return for them paying a small lump sum in cash and investing in the UK economy. Under Onward's proposal, wealthy residents could be exempt from taxes on foreign income, capital gains, and inheritance for 15 years in return for paying a flat £300,000 fee. They would also have to invest £3m into one of the Government's industrial priorities, such as life sciences, clean energy and financial services, to qualify for the tax break. Sir Simon Clarke, the director of Onward, said: 'It is crazy for us to chase wealthy people out of this country when they could be both paying tax and making a hugely important wider economic contribution here.' The proposal comes as Ms Reeves faces mounting pressure from Labour backbenchers and union backers to make the rich pay more. Ms Reeves has already increased taxes since coming to power last year. These include abolishing the non-dom status and tightening inheritance tax rules, along with tax rises on business. However Labour backbench MPs have increasingly called for a wealth tax from the Chancellor to fix Britain's finances. Lord Kinnock, the former Labour leader, said recently that the public was 'fed up' with the richest going 'unscathed'. He said imposing a 2pc tax on asset values above £10m would deliver £10bn to £11bn for the Treasury. However, Lord Mendelsohn, Labour's former business spokesman, said: 'A small group of wealthy individuals pay a significant proportion of the tax we rely upon. I do not agree with some colleagues that we should wave goodbye to the wealthy.' Many wealthy figures have already left Britain, including Goldman Sachs' most senior UK banker Richard Gnodde, Aston Villa co-owner Nassef Sawiris and Charlie Mullins, the founder of Pimlico Plumbers. Henley & Partners, an advisory firm, expects the UK to lose more millionaires than any other country this year as high taxes drive away the wealthy. According to its research, 16,500 millionaires will leave the UK in 2025 - up from 10,800 last year. Andrew Griffith, shadow business secretary, said: 'There is nothing good about wealth creators fleeing the country leaving the rest of us to pay higher taxes or have worse public services.' Last night, a Treasury spokesman said: 'The UK remains highly attractive. 'Our main capital gains tax rate is lower than any other G7 European country and our new residence-based regime is simpler and more attractive than the previous one, whilst it also addresses tax system unfairness so every long-term resident pays their taxes here.'
Zawya
11-07-2025
- Business
- Zawya
Sterling slips as weak growth data fuels rate cut expectations
Sterling slipped on Friday and was trading close to a more than two-week low after data showed the UK economy contracted for the second month, boosting expectations that the Bank of England could lower borrowing costs next month. Gross domestic product shrank by 0.1% after a 0.3% drop in April, the Office for National Statistics said, primarily dragged by weakness in industrial and construction output. "Though it would be wrong to conclude from the GDP data alone that the economy is coming under greater pressure, there are genuine questions emanating from the jobs market and whether it is beginning to fall apart more quickly," said James Smith, an economist at ING. "For the (BoE), it would likely force a rethink on the pace of rate cuts. Until now, officials have appeared highly reluctant to move beyond their recent, gradual once-per-quarter cutting pace." The pound weakened 0.26% to $1.354, while against the euro it slipped 0.2% to 86.35 pence. Yields on short-term gilts , often a reflection of interest rate expectations, were steady after easing about two basis points earlier in the day. Traders are now pricing in a 78.3% chance the BoE could deliver a 25-basis-point interest rate cut in August, versus the 64% probability they were pricing in two weeks ago, data compiled by LSEG showed. Friday's data adds to worries for finance minister Rachel Reeves, with economists saying it looks likely she will need to raise taxes again in the upcoming Autumn budget as the government strives to balance its public accounts. UK markets took a beating last week after the Labour government was forced to pass a highly contested welfare bill that did little to make good on the spending cuts initially hoped for and heightened the uncertainty regarding the sustainability of government finances. Globally, investors were rattled by U.S. President Donald Trump's latest tariff escalation as he said he would impose a 35% rate on Canadian imports next month, while other trading partners are likely to face blanket levies of 15% or 20%. The pound firmed 0.5% against the Canadian dollar and last fetched C$1.855. Analysts have said that Britain's deal with the U.S. has made it less exposed to uncertainty on the trade front, which was also reflected in the pound's 8% rise against the U.S. dollar so far this year.
Reuters
11-07-2025
- Business
- Reuters
Sterling slips as weak growth data fuels rate cut expectations
July 11 (Reuters) - Sterling slipped on Friday and was trading close to a more than two-week low after data showed the UK economy contracted for the second month, boosting expectations that the Bank of England could lower borrowing costs next month. Gross domestic product shrank by 0.1% after a 0.3% drop in April, the Office for National Statistics said, primarily dragged by weakness in industrial and construction output. "Though it would be wrong to conclude from the GDP data alone that the economy is coming under greater pressure, there are genuine questions emanating from the jobs market and whether it is beginning to fall apart more quickly," said James Smith, an economist at ING. "For the (BoE), it would likely force a rethink on the pace of rate cuts. Until now, officials have appeared highly reluctant to move beyond their recent, gradual once-per-quarter cutting pace." The pound weakened 0.26% to $1.354, while against the euro it slipped 0.2% to 86.35 pence. Yields on short-term gilts , , often a reflection of interest rate expectations, were steady after easing about two basis points earlier in the day. Traders are now pricing in a 78.3% chance the BoE could deliver a 25-basis-point interest rate cut in August, versus the 64% probability they were pricing in two weeks ago, data compiled by LSEG showed. Friday's data adds to worries for finance minister Rachel Reeves, with economists saying it looks likely she will need to raise taxes again in the upcoming Autumn budget as the government strives to balance its public accounts. UK markets took a beating last week after the Labour government was forced to pass a highly contested welfare bill that did little to make good on the spending cuts initially hoped for and heightened the uncertainty regarding the sustainability of government finances. Globally, investors were rattled by U.S. President Donald Trump's latest tariff escalation as he said he would impose a 35% rate on Canadian imports next month, while other trading partners are likely to face blanket levies of 15% or 20%. The pound firmed 0.5% against the Canadian dollar and last fetched C$1.855. Analysts have said that Britain's deal with the U.S. has made it less exposed to uncertainty on the trade front, which was also reflected in the pound's 8% rise against the U.S. dollar so far this year.
Bloomberg
11-07-2025
- Business
- Bloomberg
Economy Stalls
Morning, I'm Chloé Meley from Bloomberg UK's breaking news team, bringing you up to speed on today's top business stories. The UK economy's stellar first quarter feels more and more like a distant memory.
Sky News
09-07-2025
- Business
- Sky News
Greater risk to UK economy following Trump's tariffs, says Bank of England
The future of the UK economy is weaker and more uncertain due to President Trump's tariffs and conflict in the Middle East, the Bank of England has said. "The outlook for UK growth over the coming year is a little weaker and more uncertain," the central bank said in its biannual health check of the UK's financial system. Economic and financial risks have increased since the last report was published in November, as global unpredictability continued after the announcement of country-specific tariffs on 2 April, the Bank's Financial Stability Report said. These risks and uncertainty, as well as geopolitical tensions, like the wars in Ukraine and the Middle East, are "particularly relevant" to UK financial stability as an open economy with a large financial sector, it said. Pressures on government borrowing costs are "still elevated" amid significant doubts over the global economic outlook. Had a 90-day pause on tariffs not been announced, conditions could have worsened, the report added. The chance of prices rising overall has also grown as tensions between Iran and Israel and the US threaten to push up energy prices. Possible higher inflation in turn raises the prospect of more expensive borrowing from higher interest rates to bring down those price rises. This compounds the pressure on state borrowing costs. 1:42 Mortgages Borrowing costs for about 40% of mortgage holders are set to become costlier over the next three years as households refix to more expensive deals, affecting 3.6 million households, the Bank said. Many homes have not refixed their mortgage since interest rates began to rise in 2021, meaning the full impact of higher rates has yet to filter through. Those looking to get on the property ladder got a boost as the Bank said lenders could issue more loans deemed to be risky, meaning people could be able to borrow more. Financial institutions can now have 15% of their new mortgages deemed risky every year, up from the current 9.7%. Riskier mortgages are those with a loan value above 4.5 times the borrower's income. Be 'prepared for shocks' Despite the global and domestic economy concerns, the outlook for UK household and business resilience remained "strong", the Bank said. Investors, however, were warned that there could be "sharp falls in risky asset prices", which include shares and currencies. If there are any vulnerabilities in non-bank lenders, it "could amplify such moves, potentially affecting the availability and cost of credit in the UK". "It is important that in their risk management, market participants [people involved in investing] are prepared for such shocks." The steep market reaction following the tariff announcements in April "highlights that the interconnectedness of global financial markets can mean stress from one market can move quickly to others," the report said. Overall, though, "household and corporate borrowers remain resilient", the Bank concluded.
