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What to expect in the Budget 2025
What to expect in the Budget 2025

Yahoo

time3 days ago

  • Business
  • Yahoo

What to expect in the Budget 2025

Anaemic growth and higher-than-expected government borrowing will be weighing on Rachel Reeves as MPs head off on their six-week summer recess. The Chancellor will not be able to avoid questions about how she's going to address the economic hole the country faces. Shadow chancellor, Mel Stride, accused Ms Reeves of 'burying' an extra £10bn of spending in her Spending Review. It came as government borrowing in June hit £20.7bn – several billion pounds higher than in May – to bridge the gap between tax receipts and spending. Inevitably, speculation is already ramping up about what the next Budget will bring. Ms Reeves has refused to be drawn on whether she might be forced to break Labour's manifesto pledge not to raise taxes on 'working people'. But as the Chancellor demonstrated last year, she's not adverse to other tax raids. The date of the next Budget is not yet confirmed, but the announcement of the Government's fiscal policy usually takes place in late October or early November. Here, Telegraph Money looks at some of what might be included, as Ms Reeves scrambles to balance the books. National Insurance on landlordsChances: 3/10 Labour has shown that it doesn't mind taking on landlords with the Renters' Rights Bill, and politicians of all stripes have seemingly had it in for property investors for years now. Landlords could be in the firing line as the Treasury looks to tax their 'passive' income as if it had been earned from a job. There are several ways in which the Treasury could target landlords. Profit from lettings could be made subject to National Insurance, for instance, or a separate tax rate could be created for rental income, which aligns with income tax bands. Taxing landlord income in the same way as employment has been called for by left-leaning think tanks before. Adam Corlett, of the Resolution Foundation, said: 'With tax rises clearly coming this autumn, the Chancellor should use this as an opportunity to make the tax system fairer and more efficient. 'One way to achieve this is to ensure different forms of income are taxed at the same rate, for example by levying National Insurance on income for rental properties. After all, there's no good reason why landlords should face lower tax rates than their tenants.' But campaign group, Generation Rent, warned that as more landlords move the ownership of their rental properties to limited companies structures, the tax raid could become less effective. More than 680,000 rental homes were owned by companies in March, research conducted by estate agency Hamptons found. Dan Wilson Craw, from the campaign group, said: 'The Treasury should bear in mind that increasing numbers of rental homes are owned by limited companies and in many cases would continue to pay a lower tax rate than an employee.' Another attack on pensions?Chances: 3/10 Labour has kicked a lot of decisions on pensions into the long grass. The debacle on winter fuel payments will also make the Government wary of being seen to target older people again. On Monday, Labour announced that a so-called 'Pension Commission' would be launched to investigate chronic under-saving for retirement. It came days after the Office for Budget Responsibility warned that the cost of the 'triple lock' on state pension payments would be three times what was originally predicted. So it seems unlikely that the Government will make any sweeping changes to pensions, as ministers have said that changes to how much employees save automatically won't happen before the next election. Maintaining the triple lock was also a manifesto pledge Labour breaks at its own peril. But that doesn't mean other reforms are impossible. Ahead of last year's Budget, rampant speculation about the future of the 25pc tax-free lump sum was rife, leading some savers to take out their cash in panic. It is believed Treasury civil servants have long wanted to reduce tax relief offered to higher- and additional-rate taxpayers on their pensions. Pension experts too have argued a 'flat rate' would be fairer, and could save vast sums of money. Sir Steve Webb, former pensions minister and partner at LCP, said: 'Major changes would be likely to affect millions of public sector workers, many of whom form the Government's core support base. 'But more technical areas such as the use of salary sacrifice for pension contributions could well come under the spotlight in the Chancellor's hunt for cash.' Cuts to cash IsasChances: 5/10 Change has been trailed for some time – expect the Budget to at least warn savers that reform is coming. Savers were braced for the Chancellor to cut the annual cash Isa allowance at a speech in the City earlier this month. But following a significant backlash from building societies and savers, Ms Reeves delayed any announcement. Rumours have been swirling since change was first mooted in January that the £20,000 limit for cash savings could be cut to as little as £4,000. Ms Reeves is keen to push the more than £300bn held in cash Isas into the stock market, preferably into London-listed businesses. But stopping the flood of money into cash Isas could make mortgages more expensive, building societies warned, because they use deposits to fulfil capital requirements and secure lending. Cynics would say the Government's real intention is to force people to hold their money in traditional savings accounts which are, of course, taxable. Tom Selby, of stockbroker AJ Bell, said: 'The Government has been clear it wants to encourage a retail investment culture in the UK and get more people investing for the long-term rather than stashing their hard-earned savings in cash, but there has been little detail beyond this. 'The Budget could provide the Chancellor with a platform to put some meat on the bones of this agenda.' Income tax thresholds freezeChances: 6/10 It's a big fundraiser – and a stealth tax. Seven million taxpayers have been dragged into paying higher rates of income tax as a result of frozen income tax thresholds. This policy of using 'fiscal drag' to boost tax receipts was introduced under the Conservatives. The thresholds, including the £12,570 tax-free personal allowance, were first frozen by the Tories in 2021. As things stand, the freeze is set to last until 2028 – and Ms Reeves committed to it ending then at last year's Budget. As wages increase to keep up with inflation, more workers are pulled into higher rates, meaning a bigger tax take. The freeze forced an extra 520,000 taxpayers into the 40p bracket in the last year, according to estimates by HM Revenue & Customs (HMRC). The OBR thinks that the freeze will raise an extra £48bn in 2029-2030, as the number of taxpayers passes 40 million. Sir Keir Starmer has refused to rule out a further freeze beyond the 2028 expiry date. It would be a relatively simple and, crucially, little-understood way to raise serious amounts of cash. But the Government could choose not to extend the freeze at this Budget, and instead do it at the next – well before it is due to run out. Fuel dutyChances: 4/10 Labour has a strong net zero agenda under Ed Miliband, but the Government may be too weak to load more costs on to drivers, many of whom are the very definition of working people. At last year's Budget, Ms Reeves extended a long-standing freeze on fuel duty. There is also a 5p per litre cut, which was introduced in March 2022, and will end, as things stand, next March. The estimated cost of the freeze for the current tax year is more than £3bn. Edmund King, of motoring company AA, told The Sun that any increase in cost at the pumps 'could be catastrophic' for the economy. The OBR said last October that unwinding the freeze in 2026 would increase inflation, as the price of fuel would increase. Wealth taxChances: 2/10 While Labour backbenchers are keen on introducing a wealth tax, the Cabinet appears to have come to its senses. Wealth taxes are difficult to administer and have backfired in most of the places they've been tried. Earlier this week, 26 MPs signed a Parliamentary motion calling for an annual wealth tax of 2pc on individual assets of more than £10m. They claimed that this could raise £24bn a year. Supporters included arch-Corbynites, alongside other Labour, Independent and several Plaid Cymru MPs. Some of Labour's biggest names, including Lord Kinnock, have advocated for a wealth tax. Ahead of this year's Spring Statement, Patriotic Millionaires, a campaign group which asks for higher taxes for the super-rich, said that 80pc of UK-based millionaires would support a wealth tax. But The Times reported earlier this week that Mrs Reeves was resisting calls for the implementation of such a levy, with Cabinet ministers calling it a 'non-starter'. Eight countries have previously implemented wealth taxes, including Austria, Denmark, Germany, Finland, Iceland, Luxembourg, Sweden and France, only to scrap them. Just four countries, Norway, Spain, Switzerland and Colombia still have a wealth tax. The exodus of non-doms since Labour took power will be in the forefront of Reeves' mind. A Treasury spokesman said: 'The best way to strengthen public finances is by growing the economy – which is our focus. Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8bn and cut borrowing by £3.4bn. 'We are committed to keeping taxes for working people as low as possible, which is why at last Autumn's Budget, we protected working people's payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee National Insurance, or VAT.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. 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

Bond traders smell trouble: Reckless Reeves could spark a full-blown financial crisis, says MAGGIE PAGANO
Bond traders smell trouble: Reckless Reeves could spark a full-blown financial crisis, says MAGGIE PAGANO

Daily Mail​

time22-07-2025

  • Business
  • Daily Mail​

Bond traders smell trouble: Reckless Reeves could spark a full-blown financial crisis, says MAGGIE PAGANO

There are times when the numbers published by the Office for National Statistics on the state of the economy are so mind-boggling that they become meaningless. Figures for June on the level of government borrowing are a case in point. On our behalf, Labour borrowed some £20.7billion last month – £6.6billion more than in the same month last year. It is the second highest June borrowing since records began, and was only eclipsed in 2020 at the height of the pandemic. This takes borrowing in the first three months of the financial year to £57.8billion, and if the forecasts are to be believed, suggests the total tally for this financial year will be £130billion, give or take a billion or two. That is more than any government department spends, other than health. Perhaps an extra £6billion a month doesn't sound too much. But here's a way of putting these numbers into some sort of perspective. How long do you think it takes to count to a million? If you take one number at a time – about a second each – it would take an average person 11 and a half days of continuous counting, or around 278 hours. Now estimate how long it takes to count to a billion. On the same non-stop basis, it would take someone an astonishing 31.7 years, and that's without eating or sleeping. So for June's extra £6billion, someone would have to count for roughly 192 years. That gives some context for the scale of the problems facing our public finances. If the economy was growing – and living standards rising – as a consequence of improved productivity, such a whopping debt mountain might not be such a problem. But it's not. Quite the reverse. June's horrifying monthly increase is because government spending outstripped tax receipts while the cost of interest payments on the country's nearly £3 trillion debt nearly doubled. What's more, the £16.4billion cost of interest payments on the debt was the second highest for June since 1993 due to inflation. This was £8.4billion more than in the same month last year, or put another way, £550million a day and more than £22million an hour. As Office for Budget Responsibility chairman Richard Hughes pointed out recently at the Treasury select committee, we have the sixth-highest debt, fifth-highest deficit and third-highest borrowing costs among 36 advanced economies. Which is why the UK gilt market is so skittish. Traders smell trouble ahead, particularly after the Government failed to get through even the most minor reforms to the welfare budget. Gilt yields on the 30-year benchmark government bond have been above 5 per cent for most of the year, breaking the 5.5 per cent mark last week – far higher than during the Liz Truss reign. Yet when Labour came to power, yields were below 4.5 per cent. Capital Economics claims that higher UK gilt yields since March have already cut the Chancellor's so-called 'fiscal headroom' from £9.9billion to £6.7billion. In the scale of things, the difference now comes down to a rounding error. While it is true that the cost of money has risen globally, the markets forecast that UK borrowing costs have further to climb, that the country is an outlier. What a mess. Rachel Reeves will need to whip up another £20billion to balance the books. But she doesn't have many options left, having lost the fight over cuts to the welfare budget. Her only choice is to raise taxes again. This in turn will scupper growth, leading to a state of stasis, if not a full-blown financial crisis. Trump's win Laugh all you like at Donald Trump's outlandish tariff threats but they often land him the prize. The President's latest win is the promise by AstraZeneca to invest $50billion in the US by the end of the decade as part of its plan to reach $80billion of sales. Rather than face potential tariffs of 200 per cent on imported drugs, the pharmaceuticals giant is going to build a new drug manufacturing factory for chronic diseases in Virginia. Having already lost out on AstraZeneca's plan to build a plant in the UK because of government incompetence, the powers that be must do all they can to ensure that the company will keep its primary listing in London and not switch to New York. That would be giving Trump too much of a win.

What surging cost of borrowing means for Rachel Reeves' tax plans
What surging cost of borrowing means for Rachel Reeves' tax plans

The Independent

time22-07-2025

  • Business
  • The Independent

What surging cost of borrowing means for Rachel Reeves' tax plans

A bit of a shocker has emerged on the public finances, and it is unambiguously bad news. Britain borrowed some £20.7bn last month – the second-highest June figure since records began in 1993 and behind only the panicky pandemic year of 2020. It was £6.6bn higher than in June 2024, and as much as £16.4bn of the total was accounted for by debt interest. Worse than any of that, it was higher than City expectations. The gilts market was further discomfited. Pressure on the public finances is plainly not easing… Why is government borrowing so high? Inflation, is the short answer. It was up again last month and is likely to edge higher in the coming months thanks to a bump up in energy costs. About a quarter of UK debt is index-linked to prices, which means that any uptick in official inflation feeds directly through to the public finances. And domestic pressures on public spending remain acute. Britain's government pays more to borrow funds than most comparable advanced economies thanks to Brexit, Trump's trade wars, Covid recovery, and longer-term weakness in investment and productivity. What can Rachel Reeves do about it? Keep her job is one thing. During the welfare bill rebellion fiasco earlier this month, the rumour she might be sacked or quit pushed gilt yields higher, which in turn meant that raising new money would be even more costly. Yields subsided, but stability at the Treasury is a valuable asset in itself; markets fully expect another tough Budget, as does everyone. Given setbacks in social security spending and disappointing growth, she'll probably need to raise another £20bn to be on the safe side, to deal with future shocks and meet her own her 'iron clad' fiscal rules. What are her options? Mainly new taxes, and that includes sin taxes such as on gambling, sugar in food, or petrol and diesel. She might also tighten up tax breaks on pension savings, extend the freeze in income tax thresholds, and target capital gains (again). She might also ask the Bank of England not to pay so much interest on the deposits commercial banks keep with it; that might sort most of it out, but she'll still need to look again at aspects of public spending. There seems less hope that the two-child benefit cap will be lifted. What about her 'non-negotiable' fiscal rules? The person Reeves would have to negotiate with is Rachel Reeves, so it's possible she could persuade herself to tweak the rules again; but as she pointed out at the recent Mansion House dinner, rules about borrowing merely reflect the reality of market sentiment. If the market can tolerate another adjustment, it might happen – but probably not at the moment. Will the Bank of England still cut interest rates in August? Yes. The weight of expectations is too heavy and the Bank still judges that, a year to 18 months out, inflation will subside back toward the target rate of 2 per cent (absent any nasty surprises). So interest rates will be down to 4 per cent next month; after that, we may have a bit of a wait because service sector and wage inflation remain stubbornly elevated. Does any of this matter politically? Labour desperately needs to win a reputation for economic competence, and the image of a government not in control of spending and debt would dump the party out of office for another generation. A Tory or Reform government on the back of chaos would be a nailed-on certainty for the next election, whenever it comes. However, an immediate major crash, such as was seen after the 2022 Truss mini budget, the collapse of Sterling out of the Exchange Rate Mechanism in 1992, or the 1976 IMF crisis, doesn't seem likely. It's more of a long, thankless and politically bruising slog for the next few years to get the public finances on a sustainable basis. Contrary to some predictions, Reeves may have to have longer in her 'dream job' than even she might wish for.

FTSE 100 at new high despite poor borrowing data
FTSE 100 at new high despite poor borrowing data

The Independent

time22-07-2025

  • Business
  • The Independent

FTSE 100 at new high despite poor borrowing data

London's FTSE 100 notched another record close, and hit an all-time intra-day high, despite the threat of higher UK taxes after figures showed a sharp increase in government borrowing. The FTSE 100 index closed up 10.82 points, 0.1%, at 9,023.81. It had earlier hit a new all-time high of 9,035.37. The FTSE 250 closed down 78.20, 0.4%, at 21,934.26, and the AIM All-Share closed down 0.74 of a point, 0.1%, at 770.14. According to the Office for National Statistics (ONS), public sector borrowing totalled £20.68 billion in June, exceeding an FXStreet-cited consensus estimate for £15.6 billion and up from £17.44 billion in May. It was the second-highest June borrowing since monthly records began in 1993, after that of June 2020, the ONS noted. It was also more than the £17.1 billion forecast by the Office for Budget Responsibility (OBR) in March. Data showed borrowing through the three months to June totalled £57.8 billion, up £7.5 billion from a year earlier, but in line with an estimate from the OBR. However, the central Government's net cash requirement was £55.7 billion for the period, £6.7 billion above the OBR forecast. Russ Mould at AJ Bell said: 'Soaring debt interest payments haven't helped and the situation will further stir speculation that the Government will have to put up taxes in the autumn budget.' Kathleen Brooks at XTB Research said the issue for the UK is that 'ever-growing public sector costs could lead to consistent tax rises over this parliament'. She added that the government's unwillingness to 'rein in spending and the lack of realistic debate about public sector services and how much the state can provide could leave the UK in a very tricky position.' The pound was little changed at 1.3508 dollars late on Tuesday afternoon in London, compared with 1.3506 dollars at the equities close on Monday. The euro traded at 1.1735 dollars, against 1.1711 dollars. Against the yen, the dollar was trading down at 146.49 yen compared with 147.29 yen. Despite economic concerns, UBS thinks UK equities continue to trade at 'attractive valuations both in absolute and relative terms'. 'Low multiples, combined with high dividend yields underline the UK market's appeal, and there is room for further re-rating if earnings prove resilient and political risks abate. For now, UK equities offer cheapness with a catalyst, the fundamental discount is well known, and any improvement in macro or clarity in policy could help close the gap further,' strategists at the Swiss bank commented. In European equities on Tuesday, the CAC 40 in Paris lost 0.8%, while the DAX 40 in Frankfurt fell 1.1%. In New York, the Dow Jones Industrial Average was up 0.1%, the S&P 500 traded down 0.1% and the Nasdaq Composite fell 0.5%. US Treasury Secretary Scott Bessent said that he would meet his Chinese counterparts in Stockholm next week for tariff talks, eyeing an extension to a mid-August deadline for levies to snap back to steeper levels. Mr Bessent told Fox Business that he will be speaking to Chinese officials on Monday and Tuesday for a third round of high-level negotiations, to work out what he said would be a likely postponement of the deadline. Washington and Beijing slapped escalating, tit-for-tat levies on each other's exports earlier this year, reaching triple digit levels and stalling trade between the world's two biggest economies as tensions surged. But after top officials met in Geneva in May, both sides agreed to lower their tariff levels temporarily in a de-escalation set to expire next month. Officials from the two countries also met in London in June. 'That deal expires on August 12, and I'm going to be in Stockholm on Monday and Tuesday with my Chinese counterparts, and we'll be working out what is likely an extension then,' Mr Bessent said in the interview. The yield on the US 10-year Treasury was quoted at 4.34%, narrowing from 4.36%. The yield on the US 30-year Treasury was quoted at 4.91%, trimmed from 4.92%. On London's FTSE 100, Compass Group rose 5.3% after it raised full-year guidance and announced the 1.5 billion euro acquisition of Vermaat Groep. The Chertsey, England-based contract caterer said the acquisition of European premium food services business Vermaat, for an enterprise value of 1.3 billion euros, is expected to be both margin and earnings per share accretive in the first full year of ownership. Citi said that with compound annual growth of more than 20% over the last 15 years, and 'double-digit' operating margins, Vermaat appears to be a 'high-quality business'. In addition, Compass reported organic revenue growth of 8.6% in the three months to June 30, the financial third quarter, and 8.5% for the financial year to date. As a result, Compass raised its 2025 guidance. 'We now expect constant currency underlying operating profit growth to be towards 11%, driven by organic revenue growth above 8% and ongoing margin progression,' the firm said. Compass had previously forecast high single-digit growth. Centrica climbed 4.6% as it said it will jointly acquire a 15% equity stake in the UK's new Sizewell C nuclear plant with the UK government, Electricite de France, and International Public Partnerships, among other investors. The new power station is currently under construction in Suffolk, targeting a generating capacity of 3.2 gigawatts, which is about 7% of the UK's entire electricity demand. It is expected to cost around £38 billion to build. Windsor-based British Gas owner Centrica has committed £1.3 billion in construction funding. But Legal & General fell 2.4% as RBC Capital Markets downgraded it to 'underperform' from 'sector perform', and cut its price target. On the FTSE 250, Greencore jumped 12% after it raised full-year guidance, after reporting that the good weather and new business wins boosted sales in the financial third quarter. Greencore now anticipates financial 2025 adjusted operating profit will be in a range of £118 million to £121 million, ahead of previous guidance of £114 million to £117 million. At the top-end of guidance this would be 21% ahead of £97.5 million posted in the 52 weeks to September 27 2024. Chief executive Dalton Philips said it was an 'outstanding performance'. Pennon Group advanced 2.1% after JP Morgan upgraded it to 'overweight' from 'neutral'. Oxford Nanopore added 5.2%, building on Monday's stellar gains. The biggest risers on the FTSE 100 were Compass Group, up 136.0 pence, at 2,660.0p, Centrica, up 7.45p at 164.1p, Glencore, up 9.8p at 322.55p, WPP, up 12.0p at 425.8p and Entain, up 27.4p at 986.4p. The biggest fallers on the FTSE 100 were easyJet, down 14.4p at 492.2p, ICG, down 58.0p at 2,112.0p, Melrose Industries, down 13.4p at 522.6p, IAG, down 9.2p at 370.6p and Games Workshop, down 360.0p at 15,840.0p. Brent oil was quoted lower at 68.30 dollars a barrel in London on Tuesday, from 68.72 dollars late on Monday. Gold climbed to 3,426.29 dollars an ounce against 3,397.12 dollars. Wednesday's local corporate calendar has trading statements from miner Fresnillo and pub operator JD Wetherspoon and half-year results from international events, digital services and academic research group Informa. The global economic calendar on Wednesday has eurozone consumer confidence figures and US existing home sales data. Contributed by Alliance News.

Rachel Reeves under pressure as UK borrowing higher than forecast in June thanks to soaring debt interest costs
Rachel Reeves under pressure as UK borrowing higher than forecast in June thanks to soaring debt interest costs

The Independent

time22-07-2025

  • Business
  • The Independent

Rachel Reeves under pressure as UK borrowing higher than forecast in June thanks to soaring debt interest costs

Chancellor Rachel Reeves is facing further pressure over the UK's public finances after official figures showed higher-than-expected government borrowing last month due to soaring debt interest payments. The Office for National Statistics (ONS) said June borrowing rose to £20.7 billion last month – £6.6bn higher than a year earlier and the second highest June borrowing since records began, only behind that seen in 2020 at the height of the pandemic. The ONS said interest payable on debt jumped to £16.4bn due to a large rise in Retail Prices Index (RPI) inflation impacting index-linked government bonds. June borrowing was higher than the £17.6bn expected by most economists and the £17.1bn forecast by Britain's independent economic forecaster, the Office for Budget Responsibility (OBR). The figures have stoked fears that the government will be forced to hike taxes in the autumn budget, with experts warning over 'sin taxes' among measures to help the chancellor balance the books. Bank of England governor Andrew Bailey told MPs on Tuesday he was 'not unconcerned' by increased government borrowing. But Mr Bailey stressed in the Treasury Select Committee session that it was part of a global trend. 'The cost of borrowing has increased… but the important thing to say is that it is a global phenomenon,' he said. Borrowing for the first three months of the financial year to date stood at £57.8bn, £7.5bn more than the same three-month period in 2024, according to the ONS. The ONS said so-called compulsory social contributions, largely made up of national insurance contributions (NICs), jumped by £3.1bn to £17.5bn last month – the highest ever recorded for June. In the first three months of the financial year to date, these compulsory social contributions rose to £48bn, up £7.5bn year on year and marking another record. It followed the move by Rachel Reeves in April to increase NICs for employers, which has seen wage costs soar for firms across the UK as they also faced a rise in the minimum wage in the same month. Public sector net debt, excluding public sector banks, stood at £2.87trn at the end of June and was estimated at 96.3 per cent of gross domestic product (GDP), which was 0.5 percentage points higher than a year earlier and remains at levels last seen in the early 1960s. Darren Jones, chief secretary to the Treasury, said: 'We are committed to tough fiscal rules, so we do not borrow for day-to-day spending and get debt down as a share of our economy.' Economist Rob Wood, at Pantheon Macroeconomics, said the chancellor has a 'major problem' to overcome, 'created by U-turns on previously planned spending cuts and possible downgrades to OBR growth forecasts this autumn'. He said: 'We estimate that the chancellor's £9.9bn of headroom has turned into a £13bn hole, meaning that Ms Reeves would need to raise taxes or cut spending by a little over £20bn in the autumn budget to restore her slim margin of headroom. 'We expect 'sin tax' and duty hikes, freezing income tax thresholds for an extra year in 2029 and a pensions tax raid – reinstating the lifetime limit on pension pots and cutting relief – to fill most of the hole.' Shadow chancellor Sir Mel Stride said: 'Rachel Reeves is spending money she doesn't have. 'Debt interest already costs taxpayers £100bn a year – almost double the defence budget – and it's forecast to rise to £130bn on Labour's watch.' Nabil Taleb, economist at PwC UK, said: 'The OBR recently reported that the UK now has the third highest borrowing costs among advanced economies and with global uncertainty persisting, particularly around the impact of US policy, the cost of servicing UK debt could climb even higher.'

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