Closing summary
Eurozone GDP grew by 0.4% in the third quarter of this year, twice as fast as the 0.2% growth expected.
That follows Germany’s welcome dodging of a recession, and France’s Olympics-fuelled growth over the summer, which we’ve seen this morning.
Rachel Reeves has announced £40bn of tax rises on businesses and the rich as Labour’s first budget in 14 years sought to reverse more than a decade of decline in Britain’s public services.
After months of speculation since the party’s general election landslide victory, the chancellor revealed a sweeping package of tax increases she said would be vital to balance the books and turn the page on austerity.
“The only way to improve living standards, and the only way to drive economic growth is to invest, invest, invest,” Reeves said. “There are no shortcuts, and to deliver that investment, we must restore economic stability and turn the page on the last 14 years.”
At its heart was an increase in national insurance contributions (Nics) paid by employers – worth £25bn by the end of this parliament – alongside billions of pounds in increases from changes to capital gains tax, inheritance tax, VAT on private schools and the non-dom tax regime.
In financial markets, borrowing costs initially fell, as investors welcomed the confirmation of large tax hikes.
But the rally reversed – causing bond prices to fall and and yields (or interest rates) to rise, as the City digested the sharp increase in government borrowing forecast by the Office for Budget Responsibility, the fiscal watchdog.
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Thank you for reading. We’ll be back tomorrow. Take care – JK
Updated
John Burn-Murdoch, columnist and chief data reporter at the Financial Times, observed that the tax burden is also high in other countries.
The thing about "the UK’s tax burden is now at a record high", is that this is also true for almost all countries 📈 pic.twitter.com/Is40bLZOdt
— John Burn-Murdoch (@jburnmurdoch) October 30, 2024
