Latest news with #tax hikes
Bloomberg
a day ago
- Business
- Bloomberg
UK Borrows Billions More Than Expected, Bessent Calls for Fed Review
UK government borrowing came in more than forecast in June, a setback for Chancellor of the Exchequer Rachel Reeves that will fan speculation over potential tax hikes to shore up the public finances. A surge in debt-interest payments sent the budget deficit to £20.7 billion ($27.9 billion), the Office for National Statistics said on Tuesday, £6.6 billion more than a year earlier and well above the £17.5 billion economists surveyed by Bloomberg expected. Elsewhere, Treasury Secretary Scott Bessent said in a social media post Monday that there should be a review of the decision to renovate parts of the Federal Reserve headquarters in Washington. Today's guests, Marina Zavolock, Morgan Stanley Chief European Equity Strategist, Jasmine Groschl, Allianz Senior Economist, Eivind Kallevik, Norsk Hydro CEO. (Source: Bloomberg)
Daily Mail
3 days ago
- Business
- Daily Mail
Number of London-listed companies warning of lower profits soars
The number of London-listed companies warning of lower profits has soared this year after Labour's tax raid on business. A damning report today shows that UK plc issued 59 alerts in the second quarter of the year – a 20 per cent jump compared to 49 a year earlier. In a blow to Rachel Reeves, almost half said policy changes – such as Labour's National Insurance and minimum wage hikes – and geopolitical uncertainty would hit earnings. That is compared to a level of just 4 per cent a year earlier, before Reeves announced £40billion of tax hikes in her Budget. The report by EY-Parthenon said uncertainty fuelled by 'rapid and unpredictable policy shifts' has a 'paralysing effect' on 'confidence, decision-making and spending'. 'Governments are tightening their belts in response to rising post-pandemic debt levels,' the report said. 'Companies are feeling the impact of cuts and delays in public spending across the globe, alongside tax changes such as the rise in US tariffs and higher National Insurance Contributions and the national living wage.' Other challenges included regulatory delays and shifts in green targets. Meanwhile, those citing contract and order cancellations or delays remained at a record high of 40 per cent between April and June, while one in three referred to Donald Trump's tariff war. EY-Parthenon partner Jo Robinson said: 'The data reflects the scale of persistent uncertainty and how heavily it continues to weigh on UK businesses. While this uncertainty has been a recurring theme since mid-2024, it has intensified this year, driven largely by geopolitical tensions and policy shifts, compounding pressure on earnings and forecasts.' Nearly a fifth of London-listed firms have warned on profits in the last year. In the second quarter, the sectors worst-hit were industrial support services, computer services and retailers. Listed retailers issued seven alerts, more than double the three recorded in the first three months of the year. The sector employs 10 per cent of UK workers and 'is disproportionately exposed' to tax and wage increases. 'Many have adapted their cost base but we're seeing the warnings from those unable to absorb the impact,' the report said. 'Tariff implications, whilst not yet a major driver of distress, have also added to supply chain complexity and the cost base.' Silvia Rindone, UK and Ireland retail lead at EY, said the retail profit warnings highlighted softening demand and 'structural headwinds'. She said: 'Retailers tell us that falling sales are indicative of a longer-term shift, with consumers becoming more value-focused and less brand-loyal, which leaves cost-pressured retailers in a bind.'
Reuters
5 days ago
- Business
- Reuters
Romania considers debt liability management to switch 2026 maturing eurobonds
BUCHAREST, July 18 (Reuters) - Romania has concluded its 13 billion euro foreign debt issuance target for this year but does not rule out further issues to switch eurobonds maturing next year, the head of the debt agency, Stefan Nanu, said on Friday. Romania accessed foreign markets for a third time earlier this month amid strong demand as a package of planned tax hikes averted the risk of a ratings downgrade to below investment grade, ending months of political instability driven by a presidential election canceled in December and re-run in May. The extended election cycle inflated Romania's budget deficit to the EU's highest level - 9.3% of output in 2024 - but financial assets stabilised by the end of June as the three-week old broad coalition government announced the tax hikes and further plans to cut state spending. "While we do not need another eurobond issue this year... it is possible that we will consider liability management on foreign markets," Nanu told Reuters. "There are three eurobond issues which expire next year ... worth 4.25 billion euros ($4.94 billion), we might do a switch." Nanu also said Romania will seek to issue samurai bonds this year pending market conditions after raising $225 million in a debut green Samurai issue last year. The finance ministry will raise its funding target for the year - currently at 231 billion lei ($53.04 billion) - as the government's initial budget deficit target of 7% of output is no longer valid, with Prime Minister Ilie Bolojan saying the shortfall would come in at around 8% of output. "Having already covered about 74% of the initial funding needs for the year, and with a high FX buffer," Nanu said. "We have flexibility and room to adapt once the budget revision shows a higher deficit." He also said Romanian retail investors could buy 45-50 billion lei ($11.48 billion) worth of bonds this year. Initially a way to offer households a broader range of savings instruments, retail bonds have become an important part of the ministry's funding strategy. The ministry expects debt to reach 58.1% of output this year based on the 7% deficit target. Nanu said debt will top 60% next year. Brussels expects Romania to lower its deficit to below 3% of output by 2030. Romania is currently hanging on to the lowest investment grade rating from S&P, Fitch and Moody's with a "negative" outlook. ($1 = 4.3553 lei) ($1 = 0.8589 euros) ($1 = 0.8600 euros)
