All articles tagged with #public finances
During PMQs, Badenoch and Starmer clashed over the Budget, with Badenoch calling for Reeves's resignation and criticizing the government's handling of public finances, while Starmer defended the Budget and criticized welfare policies like the two-child benefit cap. The session also covered issues like the resignation of the OBR chair, child poverty, water supply crisis, and Ukraine war support.
Governments are looking to mobilize private wealth, including incentives like tax-free bonds and potential wealth taxes, to address their soaring debt levels, especially amid the upcoming $80-124 trillion wealth transfer over the next 20 years, raising concerns about private sector investment access and fiscal sustainability.
UK Finance Minister Rachel Reeves remains tight-lipped about specific tax hikes in the upcoming budget, focusing instead on youth employment initiatives and acknowledging the need for tough fiscal decisions due to a significant budget gap, with potential for increased taxes amid economic challenges.
UK government borrowing in August reached its highest level in five years, driven by increased public spending and debt interest, putting pressure on Chancellor Rachel Reeves to consider raising taxes or cutting spending in the upcoming Budget to meet fiscal rules and address deteriorating public finances.
UK Prime Minister Keir Starmer's last-minute retreat on welfare reform has prevented a Labour rebellion but created a multibillion-pound hole in public finances, amid ongoing political and social tensions.
UK inflation rose to 2.3% in October, surpassing expectations and marking an increase from September's 1.7%. Core inflation also edged up to 3.3%. The rise in inflation could influence the Bank of England's interest rate decision in December, although another inflation report is due before then. The recent Autumn budget, which includes significant tax increases, may further impact inflation and economic growth. The global economic environment, including potential trade tariffs from the US, adds to inflationary pressures.
France's national auditor has raised concerns about the state of the country's public finances, signaling potential fiscal challenges ahead.
The Institute for Fiscal Studies (IFS) warns that the next UK government will face significant financial challenges, with potential tax increases or public service cuts needed to manage high debt and low economic growth. Both Labour and the Conservatives have committed to reducing debt, but the IFS stresses the need for an open discussion on how to achieve this. The IFS highlights that without a dramatic improvement in growth, tough financial decisions will be necessary, impacting voters' fortunes.
The International Monetary Fund has projected global growth of about 3% for this year, warning of a potentially lackluster decade ahead without a course correction. IMF's managing director, Kristalina Georgieva, highlighted weak global economic activity, rising debt, and the disproportionate impact of the pandemic on vulnerable countries. The anticipated growth rate is slightly above last year's projection but below the historic average, with strong activity in the United States and emerging markets cited as contributing factors. The IMF and World Bank will discuss these issues at their upcoming spring meetings amid global conflicts threatening financial stability.
European governments, including Germany, are facing the consequences of their large stimulus measures as they grapple with the need to rein in spending and manage public finances. Germany, in particular, is facing a crisis as its political leaders adjust their budget and rethink their strategy following a ruling from the country's top court.
British Chancellor of the Exchequer Jeremy Hunt plans to rely on savers to fill the gap in public finances by increasing the amount expected from National Savings & Investments (NS&I) in the Autumn Statement. NS&I has seen a surge in deposits due to higher interest rates, prompting the savings provider to raise its net funding target. The increased reliance on savers may reduce the need for government debt issuance, with economists suggesting NS&I's funding target could be raised by at least £5bn. The government aims to announce a reduction in UK gilt sales alongside modest tax cuts to boost investment and economic growth.