A growing number of young adults in the United Kingdom are delaying major life milestones such as moving out, buying homes, getting married, and starting families. The trend, often referred to as "Kidulthood," is increasingly being driven by economic realities rather than lifestyle choices.

Rising housing costs, stagnant wage growth, inflation pressures, and the high cost of living are making financial independence more difficult for Britain's younger generations. The shift is now influencing everything from consumer spending and housing demand to long-term economic growth. Here's a closer look at how "Kidulthood" is reshaping Britain's economy.

'Kidulthood' is reshaping Britain's economy 

The United Kingdom has a new prime minister as Andy Burnham takes charge of the Labour government, beginning a new chapter in British politics. Just days into office, Burnham faces major challenges, including rebuilding public trust, addressing policy concerns, and managing criticism from both opposition parties and Labour lawmakers. His leadership comes after the downfall of Keir Starmer, whose popularity declined following criticism over policies including welfare reforms and the controversial winter fuel payment cuts. During his first public engagements, Burnham highlighted the importance of improving the social care sector, promising to address concerns over cost-cutting and support for vulnerable communities.

Andy Burnham Takes Charge as UK PM, Faces Labour Challenges and Reform UK Threat

UK Prime Minister Andy Burnham has unveiled his first major policy after taking office, announcing the removal of VAT on household electricity bills to help ease the cost of living crisis. The new government says the tax cut will provide financial relief to families while maintaining fiscal responsibility. Burnham also outlined plans for regional decentralization and promised further measures to reduce everyday living costs across the United Kingdom.

New UK Prime Minister Andy Burnham announces tax relief and cost of living measures

Andy Burnham is on the brink of becoming the next prime minister of the United Kingdom after the Labour Party leadership contest closed with no further nominations expected. The former Manchester mayor has secured strong support among Labour MPs and is preparing for a move into 10 Downing Street. Burnham is expected to shape his cabinet while facing pressure to ensure greater female representation and address concerns over party culture. His upcoming leadership will be tested by major domestic issues including the economy, cost of living, healthcare and defence spending, while international challenges such as relations with the US, European Union, Ukraine and Iran will also demand attention.

Andy Burnham set to become Uk prime minister as labour leadership race ends

Britain’s inflation rate has cooled as expected, strengthening the case for a potential interest-rate cut as early as next month. Official data shows price pressures easing, offering relief to households and businesses.
However, the broader UK economy remains fragile. Wage growth is slowing, job creation is under strain, and economic momentum appears weak. Analysts say the Bank of England now faces a critical decision: support growth with a rate cut or remain cautious amid lingering risks.

UK Economy Weakens as Inflation Cools | Rate Cut Likely Next Month?

UK retail sales growth moderated to 1.6% year-on-year in October 2025, down from 2.3% in September, marking the slowest pace since May amid weakening consumer confidence. Shoppers have been holding back on discretionary spending such as toys, electronics, and clothing, anticipating Black Friday discounts and awaiting clarity on government Budget decisions. 


UK Retail Sales Growth Slows to 1.6% in October Amid Weak Consumer Confidence 

UK markets plunged on Tuesday, triggering alarm as the British pound weakened sharply and 30-year government bond yields surged to their highest levels since 1998. The sharp selloff has intensified pressure on Prime Minister Keir Starmer to stabilize the financial climate and present a credible budget that reassures global investors. With market volatility on the rise, all eyes are now on the UK government’s next fiscal move amid investor unease and economic uncertainty.

UK economy at risk of ever-higher borrowing costs

The UK economy unexpectedly contracted in May, marking its second consecutive monthly decline and raising concerns about the strength of the country’s post-pandemic recovery. According to data released by the Office for National Statistics (ONS) on July 11, gross domestic product (GDP) fell by 0.1 per cent in May, following a sharper 0.3 per cent drop in April. The contraction caught analysts off guard, as consensus forecasts had anticipated modest growth of 0.1 per cent. The latest figures point to a significant slowdown in the second quarter after the economy posted a 0.7 per cent expansion in the first three months of the year.May’s downturn was led by a 0.9 per cent drop in production output and a 0.6 per cent decline in construction. Manufacturing, particularly car production and the volatile pharmaceutical sector, weakened, while oil and gas extraction also contributed to the slump. In contrast, the services sector registered some growth, with improvements in legal services helping to partially offset the wider downturn. Retail performance remained notably weak during the month, adding further pressure to the overall economic picture. The May contraction dragged the pound down by 0.2 per cent against the dollar, reflecting growing investor unease.<h2>Tariffs, tax rises, and uncertain outlook</h2>The UK’s economic momentum has struggled to recover from the combined impact of global trade disruptions and domestic fiscal changes. The contraction in April had already been attributed to the introduction of new domestic tax rises and the shockwaves from US President Donald Trump’s sweeping tariff announcements, which included a 10 per cent reciprocal tariff on UK goods.Despite securing a bilateral trade deal with the United States, the UK has not been insulated from the broader uncertainty caused by shifting global trade dynamics. The initial surge in export activity during the first quarter—fuelled by businesses rushing to beat US tariffs—now appears to have been a one-off boost rather than a sign of sustained growth.Although GDP grew 0.5 per cent in the March-to-May period, the back-to-back contractions in April and May point to a fragile economic environment. Economists now expect GDP growth to decelerate sharply in the second quarter, with revised forecasts predicting only 0.1 per cent growth, far below earlier expectations.Meanwhile, the Bank of England, which has already cut interest rates from 5.25 per cent to 4.25 per cent over the past year, faces mounting pressure to act again. Market pricing now reflects an 80 per cent likelihood of a further rate cut in August, despite inflation remaining above 3 per cent.As the government prepares its autumn budget, rising public debt and recent policy U-turns, particularly on welfare and winter fuel support, have limited fiscal flexibility. With public finances under strain and tax rises looming, economists warn that growth could remain subdued for the rest of the year.

UK's GDP fell by 0.1 per cent in May, following a sharper 0.3 per cent drop in April. May's downturn was led by a 0.9 per cent drop in production output and a 0.6 per cent decline in construction. 

The UK economy unexpectedly contracted in May, marking its second consecutive monthly decline and raising concerns about the strength of the country’s post-pandemic recovery. According to data released by the Office for National Statistics (ONS) on July 11, gross domestic product (GDP) fell by 0.1 per cent in May, following a sharper 0.3 per cent drop in April. The contraction caught analysts off guard, as consensus forecasts had anticipated modest growth of 0.1 per cent. The latest figures point to a significant slowdown in the second quarter after the economy posted a 0.7 per cent expansion in the first three months of the year. May’s downturn was led by a 0.9 per cent drop in production output and a 0.6 per cent decline in construction. Manufacturing, particularly car production and the volatile pharmaceutical sector, weakened, while oil and gas extraction also contributed to the slump. In contrast, the services sector registered some growth, with improvements in legal services helping to partially offset the wider downturn. Retail performance remained notably weak during the month, adding further pressure to the overall economic picture. The May contraction dragged the pound down by 0.2 per cent against the dollar, reflecting growing investor unease. Tariffs, tax rises, and uncertain outlook The UK’s economic momentum has struggled to recover from the combined impact of global trade disruptions and domestic fiscal changes. The contraction in April had already been attributed to the introduction of new domestic tax rises and the shockwaves from US President Donald Trump’s sweeping tariff announcements, which included a 10 per cent reciprocal tariff on UK goods. Despite securing a bilateral trade deal with the United States, the UK has not been insulated from the broader uncertainty caused by shifting global trade dynamics. The initial surge in export activity during the first quarter—fuelled by businesses rushing to beat US tariffs—now appears to have been a one-off boost rather than a sign of sustained growth. Although GDP grew 0.5 per cent in the March-to-May period, the back-to-back contractions in April and May point to a fragile economic environment. Economists now expect GDP growth to decelerate sharply in the second quarter, with revised forecasts predicting only 0.1 per cent growth, far below earlier expectations. Meanwhile, the Bank of England, which has already cut interest rates from 5.25 per cent to 4.25 per cent over the past year, faces mounting pressure to act again. Market pricing now reflects an 80 per cent likelihood of a further rate cut in August, despite inflation remaining above 3 per cent. As the government prepares its autumn budget, rising public debt and recent policy U-turns, particularly on welfare and winter fuel support, have limited fiscal flexibility. With public finances under strain and tax rises looming, economists warn that growth could remain subdued for the rest of the year.

UK's GDP fell by 0.1 per cent in May, following a sharper 0.3 per cent drop in April. May's downturn was led by a 0.9 per cent drop in production output and a 0.6 per cent decline in construction.&nbsp;

UK economy shrinks again in May, signalling fragile recovery

Britain is on track to experience its worst decade for living standards growth in more than 6 decades, according to the Resolution Foundation’s Living Standards Outlook 2025, released on June 26. Despite a sharp income recovery in 2024-25, the report warns that median household incomes will stagnate through the rest of the 2020s, particularly hitting lower-income families, renters, and children. Drawing on economic forecasts from the Office for Budget Responsibility (OBR) and the Bank of England, the report projects that typical non-pensioner household incomes will grow by just 1 per cent in real terms between 2024-25 and 2029-30, a cash gain of only around £300. This would amount to zero growth across the full decade, following a turbulent first half marked by the Covid-19 pandemic and the cost-of-living crisis.The weakest outlook is for those at the bottom of the income distribution. The poorest 10 per cent of non-pensioner households are projected to be 8 per cent worse off in 2029-30 compared to 2019-20, a loss of around £1,000. Meanwhile, incomes for the bottom half overall are expected to fall by 2 per cent over the decade, whereas the top half could see a slight rise of 1 per cent.Pensioners and outright homeowners are among the few groups likely to see positive growth. Pensioner incomes are projected to rise by 5 per cent between 2024-25 and 2029-30, largely due to the continuation of the triple lock on the state pension. By contrast, private renters are expected to see incomes fall by 2 per cent and mortgagors by 1 per cent over the same period. Children, in particular, are expected to suffer, with their typical household income projected to be 2 per cent lower in 2029-30 than in 2019-20.<h2>Policy choices and economic risks ahead</h2>The report warns that current government policies, including the continuation of the two-child benefit limit, frozen income tax thresholds, and rising council tax, are set to suppress income growth. Under existing policies, child poverty is expected to rise from 31 per cent in 2023-24 to 34 per cent by the end of the decade, representing a record 4.8 million children in poverty.However, the Resolution Foundation highlights that alternative policy decisions could significantly alter the trajectory. For instance, scrapping the two-child limit could reverse the expected rise in child poverty and deliver modest income growth for the poorest families, even if funded by tax increases.More optimistic economic scenarios, including stronger pay growth and higher employment, could also improve outcomes. In such a case, median incomes could rise by up to 3 per cent between 2024-25 and 2029-30, still historically weak, but better than the central forecast.<h2>Public concern reflects hard realities</h2>The bleak projections come amid widespread public anxiety. According to recent surveys cited in the report, 86 per cent of Britons view the cost of living as the UK’s most pressing issue, with a record 26 per cent saying they are struggling to live on their income, up from 16 per cent in 2018.Despite strong earnings growth in recent years, rising inflation, high housing costs, and policy headwinds have eroded real income gains. Without substantial changes, the 2020s could mark a generational low point for British household living standards.“The government’s goal of raising living standards is welcome but unambitious,” said Adam Corlett, lead author of the report. “Delivering noticeable income growth for a broad range of voters will require targeted measures for the poorest as well as sustained economic growth.”

The weakest outlook is for those at the bottom of the income distribution. The poorest 10 per cent of non-pensioner households are projected to be 8 per cent worse off in 2029-30 compared to 2019-20.

Britain is on track to experience its worst decade for living standards growth in more than 6 decades, according to the Resolution Foundation’s Living Standards Outlook 2025, released on June 26. Despite a sharp income recovery in 2024-25, the report warns that median household incomes will stagnate through the rest of the 2020s, particularly hitting lower-income families, renters, and children. Drawing on economic forecasts from the Office for Budget Responsibility (OBR) and the Bank of England, the report projects that typical non-pensioner household incomes will grow by just 1 per cent in real terms between 2024-25 and 2029-30, a cash gain of only around £300. This would amount to zero growth across the full decade, following a turbulent first half marked by the Covid-19 pandemic and the cost-of-living crisis. The weakest outlook is for those at the bottom of the income distribution. The poorest 10 per cent of non-pensioner households are projected to be 8 per cent worse off in 2029-30 compared to 2019-20, a loss of around £1,000. Meanwhile, incomes for the bottom half overall are expected to fall by 2 per cent over the decade, whereas the top half could see a slight rise of 1 per cent. Pensioners and outright homeowners are among the few groups likely to see positive growth. Pensioner incomes are projected to rise by 5 per cent between 2024-25 and 2029-30, largely due to the continuation of the triple lock on the state pension. By contrast, private renters are expected to see incomes fall by 2 per cent and mortgagors by 1 per cent over the same period. Children, in particular, are expected to suffer, with their typical household income projected to be 2 per cent lower in 2029-30 than in 2019-20. Policy choices and economic risks ahead The report warns that current government policies, including the continuation of the two-child benefit limit, frozen income tax thresholds, and rising council tax, are set to suppress income growth. Under existing policies, child poverty is expected to rise from 31 per cent in 2023-24 to 34 per cent by the end of the decade, representing a record 4.8 million children in poverty. However, the Resolution Foundation highlights that alternative policy decisions could significantly alter the trajectory. For instance, scrapping the two-child limit could reverse the expected rise in child poverty and deliver modest income growth for the poorest families, even if funded by tax increases. More optimistic economic scenarios, including stronger pay growth and higher employment, could also improve outcomes. In such a case, median incomes could rise by up to 3 per cent between 2024-25 and 2029-30, still historically weak, but better than the central forecast. Public concern reflects hard realities The bleak projections come amid widespread public anxiety. According to recent surveys cited in the report, 86 per cent of Britons view the cost of living as the UK’s most pressing issue, with a record 26 per cent saying they are struggling to live on their income, up from 16 per cent in 2018. Despite strong earnings growth in recent years, rising inflation, high housing costs, and policy headwinds have eroded real income gains. Without substantial changes, the 2020s could mark a generational low point for British household living standards. “The government’s goal of raising living standards is welcome but unambitious,” said Adam Corlett, lead author of the report. “Delivering noticeable income growth for a broad range of voters will require targeted measures for the poorest as well as sustained economic growth.”

The weakest outlook is for those at the bottom of the income distribution. The poorest 10 per cent of non-pensioner households are projected to be 8 per cent worse off in 2029-30 compared to 2019-20.

UK’s bleak living standards forecast: Stagnating growth, rising poverty

In a landmark move to revive British industry and boost long-term economic growth, the government of the United Kingdom has announced a bold new 10-year industrial strategy aimed at cutting energy costs for businesses, unlocking billions in investment, and creating over 1.1 million well-paid jobs by 2035. The strategy, launched on June 23, focuses on eight key sectors ranging from advanced manufacturing and clean energy to digital technologies and financial services where the UK has a global competitive advantage. It pledges to remove barriers to business expansion, accelerate innovation, and support a cleaner, more resilient economy.<h2>Major electricity cost cuts for manufacturing firms</h2>At the heart of the government’s recent plan is a pledge to slash electricity bills by up to 25 per cent for over 7,000 energy-intensive manufacturers from 2027 through a new British Industrial Competitiveness Scheme. Eligible businesses, including those in the automotive, aerospace, chemicals and ceramics sectors, will be exempt from green levies such as the Renewables Obligation and Capacity Market charges, saving up to £40 ($53.5) per megawatt-hour.Additionally, support will be expanded under the ‘British Industry Supercharger’ for around 500 of the country’s most energy-intensive companies in steel, glass, and chemicals. These companies will see network charge discounts increase from 60 per cent to 90 per cent by 2026, helping protect jobs and enhance global competitiveness without raising household bills or taxes.Business groups have long cited the extremely high electricity prices as a major obstacle for UK manufacturers, who currently pay some of the highest energy rates in the developed world. The announcement is being seen as a turning point in helping British firms compete with the fast-growing international industry.<h2>Fast-tracking grid access and job creation</h2>The strategy also tackles long delays in connecting new projects to the energy grid, with a ‘Connections Accelerator Service’ set to begin by the end of 2025. This will prioritise investment-heavy and job-creating projects, cutting wait times for grid access.Prime Minister Keir Starmer hailed the strategy as a “turning point for Britain’s economy”, offering long-term direction and certainty. “This is how we power Britain’s future, by backing sectors where we lead, removing the barriers that hold us back, and building a stronger economy that works for working people,” he said.Chancellor Rachel Reeves echoed that sentiment, calling it “a giant step forward” for business and innovation. She announced increased funding for the British Business Bank, boosting its capacity to £25.6 billion ($34.26 billion) to support SMEs and high-growth industries.<h2>Boosting skills, R&amp;D and innovation</h2>To address labour shortages, the government will inject £1.2 billion ($1.6 billion) annually by 2028–29 into skills development, including short courses for high-growth sectors like defence engineering and artificial intelligence (AI). Visa reforms will also be introduced to attract elite global talent.In addition, research and development spending will rise to £22.6 billion ($30.2 billion) annually by the end of the decade, with specific investments in artificial intelligence ($2.67 billion) and advanced manufacturing ($3.74 billion). Regulatory reforms will further clear the way for technologies like biotechnology, autonomous or self-driving vehicles, and clean energy.Industry leaders have welcomed the initiative. Make UK CEO Stephen Phipson called it a “much-needed step” that addresses the sector’s three major challenges: skills shortages, high energy costs, and limited capital access. The Confederation of British Industry (CBI) described it as a “bedrock for growth”.Critics, however, questioned the Labour Party’s ability to sustain the plan. Opposition parties said the strategy admits the high cost of achieving net zero and warned that reforms must avoid burdening taxpayers or leaving small businesses behind. But supporters, including the Trades Union Congress, said lower industrial electricity prices are long overdue.With economic growth faltering—GDP shrank by 0.1 per cent in May—the new strategy represents a significant effort by the UK government to steer the country towards a more competitive, clean, and job-rich future.

UK government plans to cut electricity costs for more than 7,000 firms and create over 1 million skilled jobs under it's 10-year industrial strategy.

In a landmark move to revive British industry and boost long-term economic growth, the government of the United Kingdom has announced a bold new 10-year industrial strategy aimed at cutting energy costs for businesses, unlocking billions in investment, and creating over 1.1 million well-paid jobs by 2035. The strategy, launched on June 23, focuses on eight key sectors ranging from advanced manufacturing and clean energy to digital technologies and financial services where the UK has a global competitive advantage. It pledges to remove barriers to business expansion, accelerate innovation, and support a cleaner, more resilient economy. Major electricity cost cuts for manufacturing firms At the heart of the government’s recent plan is a pledge to slash electricity bills by up to 25 per cent for over 7,000 energy-intensive manufacturers from 2027 through a new British Industrial Competitiveness Scheme. Eligible businesses, including those in the automotive, aerospace, chemicals and ceramics sectors, will be exempt from green levies such as the Renewables Obligation and Capacity Market charges, saving up to £40 ($53.5) per megawatt-hour. Additionally, support will be expanded under the ‘British Industry Supercharger’ for around 500 of the country’s most energy-intensive companies in steel, glass, and chemicals. These companies will see network charge discounts increase from 60 per cent to 90 per cent by 2026, helping protect jobs and enhance global competitiveness without raising household bills or taxes. Business groups have long cited the extremely high electricity prices as a major obstacle for UK manufacturers, who currently pay some of the highest energy rates in the developed world. The announcement is being seen as a turning point in helping British firms compete with the fast-growing international industry. Fast-tracking grid access and job creation The strategy also tackles long delays in connecting new projects to the energy grid, with a ‘Connections Accelerator Service’ set to begin by the end of 2025. This will prioritise investment-heavy and job-creating projects, cutting wait times for grid access. Prime Minister Keir Starmer hailed the strategy as a “turning point for Britain’s economy”, offering long-term direction and certainty. “This is how we power Britain’s future, by backing sectors where we lead, removing the barriers that hold us back, and building a stronger economy that works for working people,” he said. Chancellor Rachel Reeves echoed that sentiment, calling it “a giant step forward” for business and innovation. She announced increased funding for the British Business Bank, boosting its capacity to £25.6 billion ($34.26 billion) to support SMEs and high-growth industries. Boosting skills, R&D and innovation To address labour shortages, the government will inject £1.2 billion ($1.6 billion) annually by 2028–29 into skills development, including short courses for high-growth sectors like defence engineering and artificial intelligence (AI). Visa reforms will also be introduced to attract elite global talent. In addition, research and development spending will rise to £22.6 billion ($30.2 billion) annually by the end of the decade, with specific investments in artificial intelligence ($2.67 billion) and advanced manufacturing ($3.74 billion). Regulatory reforms will further clear the way for technologies like biotechnology, autonomous or self-driving vehicles, and clean energy. Industry leaders have welcomed the initiative. Make UK CEO Stephen Phipson called it a “much-needed step” that addresses the sector’s three major challenges: skills shortages, high energy costs, and limited capital access. The Confederation of British Industry (CBI) described it as a “bedrock for growth”. Critics, however, questioned the Labour Party’s ability to sustain the plan. Opposition parties said the strategy admits the high cost of achieving net zero and warned that reforms must avoid burdening taxpayers or leaving small businesses behind. But supporters, including the Trades Union Congress, said lower industrial electricity prices are long overdue. With economic growth faltering—GDP shrank by 0.1 per cent in May—the new strategy represents a significant effort by the UK government to steer the country towards a more competitive, clean, and job-rich future.

UK government plans to cut electricity costs for more than 7,000 firms and create over 1 million skilled jobs under it's 10-year industrial strategy.

UK unveils 10-year industrial strategy to slash energy bills and spur growth

Britain’s consumer engine has hit the brakes.&nbsp;&nbsp;UK retail sales plummeted by 2.7 per cent in May, marking the sharpest drop since December 2023 and raising fresh concerns about the health of the British economy.&nbsp;According to figures released by the Office for National Statistics (ONS) on Friday, the volume of goods sold both online and in physical stores fell far more than the 0.5 per cent decline forecast by economists, as reported by Reuters. This marks the first monthly fall in 2025 after four consecutive months of growth.&nbsp;The data paints a worrying picture for the UK’s second-quarter growth, especially after a strong rebound earlier this year.<h2>Retail rebound stalls despite strong Q1</h2>Retail sales had surged in the first quarter , the strongest since 2021, buoyed by mild weather and improving real wages. But those gains now appear short-lived.&nbsp;According to the ONS, food sales dropped by 5 per cent, while household goods stores saw a 2.5 per cent decline and clothing and footwear sales fell 1.8 per cent. The decline was broad-based, cutting across all major retail categories.&nbsp;The sharp contraction in May suggests that British consumers are starting to feel the pinch, likely from lingering inflationary pressures and rising mortgage costs.<h2>Broader economic risks loom</h2>The disappointing retail figures add to fears that the UK economy could be losing momentum in the second quarter. Gross domestic product (GDP) had grown by 0.7 per cent in Q1 2025, according to ONS data, but signs of weakness began appearing in April when the economy contracted on a monthly basis.&nbsp;Forecasters now expect a sharp deceleration in growth for the current quarter, raising doubts about the durability of the UK’s post-recession recovery.<h2>Market reaction and interest rate outlook</h2>The British pound, which had earlier gained in anticipation of resilient data, pared those gains and was last trading 0.1 per cent higher at $1.3484, as quoted by Reuters.&nbsp;Markets are now betting more strongly on a rate cut from the Bank of England. As of Thursday, traders had priced in 48 basis points of rate cuts by year-end, signalling expectations of a dovish pivot as consumer demand shows signs of fatigue. &nbsp;(With inputs from the agencies) &nbsp;

This downturn follows a strong Q1 rebound, raising fears of declining GDP growth. The British pound fluctuated, with markets now anticipating potential interest rate cuts from the Bank of England.

Britain’s consumer engine has hit the brakes. UK retail sales plummeted by 2.7 per cent in May, marking the sharpest drop since December 2023 and raising fresh concerns about the health of the British economy. According to figures released by the Office for National Statistics (ONS) on Friday, the volume of goods sold both online and in physical stores fell far more than the 0.5 per cent decline forecast by economists, as reported by Reuters. This marks the first monthly fall in 2025 after four consecutive months of growth. The data paints a worrying picture for the UK’s second-quarter growth, especially after a strong rebound earlier this year. Retail rebound stalls despite strong Q1 Retail sales had surged in the first quarter , the strongest since 2021, buoyed by mild weather and improving real wages. But those gains now appear short-lived. According to the ONS, food sales dropped by 5 per cent, while household goods stores saw a 2.5 per cent decline and clothing and footwear sales fell 1.8 per cent. The decline was broad-based, cutting across all major retail categories. The sharp contraction in May suggests that British consumers are starting to feel the pinch, likely from lingering inflationary pressures and rising mortgage costs. Broader economic risks loom The disappointing retail figures add to fears that the UK economy could be losing momentum in the second quarter. Gross domestic product (GDP) had grown by 0.7 per cent in Q1 2025, according to ONS data, but signs of weakness began appearing in April when the economy contracted on a monthly basis. Forecasters now expect a sharp deceleration in growth for the current quarter, raising doubts about the durability of the UK’s post-recession recovery. Market reaction and interest rate outlook The British pound, which had earlier gained in anticipation of resilient data, pared those gains and was last trading 0.1 per cent higher at $1.3484, as quoted by Reuters. Markets are now betting more strongly on a rate cut from the Bank of England. As of Thursday, traders had priced in 48 basis points of rate cuts by year-end, signalling expectations of a dovish pivot as consumer demand shows signs of fatigue. (With inputs from the agencies)

UK retail sales fell 2.7% in May, the steepest decline since December 2023, raising concerns over economic health.&nbsp;

UK retail sales drop 2.7% in May, biggest fall since 2023

UK consumer confidence has hit its highest level this year, thanks largely to an upbeat shift among young people.&nbsp;&nbsp;According to the British Retail Consortium (BRC), economic expectations for the next three months improved to minus 28 in June from minus 36 in May, the strongest reading since December.&nbsp;Gen Z led the rebound, buoyed by April’s minimum wage hike. “This rising optimism may also reflect the increase in minimum wage from April, with many younger people expected to have seen a significant uplift in their pay packet,” said Helen Dickinson, chief executive of the BRC, as quoted by Reuters.&nbsp;It marks a second consecutive monthly improvement after consumer sentiment slumped under Labour’s April tax hikes, rising inflation, and global uncertainty.<h2>Spending power rises, but the economy stumbles</h2>Despite improved sentiment, Britain’s broader economic picture remains fragile. GDP shrank by 0.3 per cent in April, according to official data from the Office for National Statistics (ONS), after a fresh round of business tax hikes and a drop in exports to the United States.&nbsp;Inflation also remains elevated. Consumer price inflation stood at 3.4 per cent in May, the highest in over a year, largely driven by food and essential goods, further tightening household budgets.&nbsp;The economy is teetering between weak growth and persistent inflation, raising stagflation fears. “We forecast inflation to remain above 3 per cent for the remainder of the year amidst persistent wage growth and the inflationary effects from higher government spending,” said Monica George Michail of the National Institute of Economic and Social Research, as quoted by Bloomberg.<h2>Bank of England expected to pause again at 4.25%</h2>Against this backdrop, the Bank of England is widely expected to hold interest rates steady at 4.25 per cent when its Monetary Policy Committee (MPC) announces its decision at 12:00 BST on Thursday.&nbsp;The Bank last cut rates in May, from 4.5 to 4.25 per cent, marking its fourth rate cut in a year. However, analysts believe further reductions are likely to be delayed until late 2025.&nbsp;&nbsp;“We therefore expect the Bank of England to keep rates on hold this Thursday and implement just one further cut this year,” Michail added, as quoted by Bloomberg.&nbsp;While policymakers had hinted at further easing, stubborn inflation, and external risks, such as rising oil prices from the Israel–Iran conflict and US import tariffs are forcing the Bank into a more cautious stance.<h2>Trump tariffs, oil shocks muddy the outlook</h2>Like the US Federal Reserve, the Bank of England is watching President Donald Trump’s trade moves closely.&nbsp;&nbsp;The White House’s fresh tariff agenda has already disrupted UK–US exports and contributed to global inflation uncertainty.&nbsp;Oil prices have also been on the rise amid the six-day-old Israel–Iran conflict. Any prolonged escalation could push fuel and transport costs even higher, complicating inflation control across Europe.&nbsp;“The current tensions in the Middle East are causing greater economic uncertainty,” said Michail, noting that energy shocks typically feed through quickly to consumer prices.<h2>How this affects UK's common man's mortgage or savings</h2>For ordinary Britons, the Bank’s pause means borrowing costs will likely remain elevated. The Bank Rate used as a benchmark for everything from mortgage loans to savings returns has kept debt expensive but also improved interest for savers.&nbsp;According to Moneyfacts, the average two-year fixed mortgage rate is currently 5.12 per cent, while five-year deals average 5.10 per cent. About 600,000 UK homeowners are on tracker mortgages tied directly to the Bank Rate, meaning any cut or hold immediately impacts monthly repayments.&nbsp;More than 80 per cent of mortgage holders are on fixed-rate deals, many of which were set when rates were far lower. These households have faced steep increases in repayments upon renewal, with little relief in sight until the Bank resumes cutting.<h2>Gen Z leads the rebound, but for how long?</h2>While the minimum wage boost has improved sentiment, analysts warn that wage growth may not be enough to offset rising prices. Gen Z, although more optimistic, may feel the pinch later in the year if inflation remains sticky and job growth slows again.&nbsp;Still, the recent confidence rebound could be an early sign of recovery. “There’s cautious hope that households are ready to spend again,” said a senior retail analyst at Capital Economics, as quoted by Bloomberg. “But it all depends on whether prices stabilise and the global picture clears.”<h2>What happens next?</h2>The Bank of England’s next big decision hinges on global risks, inflation data, and government spending trends. Most economists expect at least one more rate cut by December, but policymakers are likely to wait for clarity on tariffs and energy prices.&nbsp;Markets will be watching closely as central banks on both sides of the Atlantic tread carefully.&nbsp;(With inputs from the agencies)&nbsp;

Boosted by April’s minimum wage hike, Gen Z lifts UK consumer sentiment to its strongest level this year, but economic fragility and high borrowing costs persist.

UK consumer confidence has hit its highest level this year, thanks largely to an upbeat shift among young people. According to the British Retail Consortium (BRC), economic expectations for the next three months improved to minus 28 in June from minus 36 in May, the strongest reading since December. Gen Z led the rebound, buoyed by April’s minimum wage hike. “This rising optimism may also reflect the increase in minimum wage from April, with many younger people expected to have seen a significant uplift in their pay packet,” said Helen Dickinson, chief executive of the BRC, as quoted by Reuters. It marks a second consecutive monthly improvement after consumer sentiment slumped under Labour’s April tax hikes, rising inflation, and global uncertainty. Spending power rises, but the economy stumbles Despite improved sentiment, Britain’s broader economic picture remains fragile. GDP shrank by 0.3 per cent in April, according to official data from the Office for National Statistics (ONS), after a fresh round of business tax hikes and a drop in exports to the United States. Inflation also remains elevated. Consumer price inflation stood at 3.4 per cent in May, the highest in over a year, largely driven by food and essential goods, further tightening household budgets. The economy is teetering between weak growth and persistent inflation, raising stagflation fears. “We forecast inflation to remain above 3 per cent for the remainder of the year amidst persistent wage growth and the inflationary effects from higher government spending,” said Monica George Michail of the National Institute of Economic and Social Research, as quoted by Bloomberg. Bank of England expected to pause again at 4.25% Against this backdrop, the Bank of England is widely expected to hold interest rates steady at 4.25 per cent when its Monetary Policy Committee (MPC) announces its decision at 12:00 BST on Thursday. The Bank last cut rates in May, from 4.5 to 4.25 per cent, marking its fourth rate cut in a year. However, analysts believe further reductions are likely to be delayed until late 2025. “We therefore expect the Bank of England to keep rates on hold this Thursday and implement just one further cut this year,” Michail added, as quoted by Bloomberg. While policymakers had hinted at further easing, stubborn inflation, and external risks, such as rising oil prices from the Israel–Iran conflict and US import tariffs are forcing the Bank into a more cautious stance. Trump tariffs, oil shocks muddy the outlook Like the US Federal Reserve, the Bank of England is watching President Donald Trump’s trade moves closely. The White House’s fresh tariff agenda has already disrupted UK–US exports and contributed to global inflation uncertainty. Oil prices have also been on the rise amid the six-day-old Israel–Iran conflict. Any prolonged escalation could push fuel and transport costs even higher, complicating inflation control across Europe. “The current tensions in the Middle East are causing greater economic uncertainty,” said Michail, noting that energy shocks typically feed through quickly to consumer prices. How this affects UK's common man's mortgage or savings For ordinary Britons, the Bank’s pause means borrowing costs will likely remain elevated. The Bank Rate used as a benchmark for everything from mortgage loans to savings returns has kept debt expensive but also improved interest for savers. According to Moneyfacts, the average two-year fixed mortgage rate is currently 5.12 per cent, while five-year deals average 5.10 per cent. About 600,000 UK homeowners are on tracker mortgages tied directly to the Bank Rate, meaning any cut or hold immediately impacts monthly repayments. More than 80 per cent of mortgage holders are on fixed-rate deals, many of which were set when rates were far lower. These households have faced steep increases in repayments upon renewal, with little relief in sight until the Bank resumes cutting. Gen Z leads the rebound, but for how long? While the minimum wage boost has improved sentiment, analysts warn that wage growth may not be enough to offset rising prices. Gen Z, although more optimistic, may feel the pinch later in the year if inflation remains sticky and job growth slows again. Still, the recent confidence rebound could be an early sign of recovery. “There’s cautious hope that households are ready to spend again,” said a senior retail analyst at Capital Economics, as quoted by Bloomberg. “But it all depends on whether prices stabilise and the global picture clears.” What happens next? The Bank of England’s next big decision hinges on global risks, inflation data, and government spending trends. Most economists expect at least one more rate cut by December, but policymakers are likely to wait for clarity on tariffs and energy prices. Markets will be watching closely as central banks on both sides of the Atlantic tread carefully. (With inputs from the agencies)

UK consumer confidence hits a 2025 high, driven by Gen Z optimism, even as inflation, weak growth, and mortgage pain cloud the outlook.

Gen Z lifts UK consumer confidence to 2025 peak, will the BOE follow with a rate cut?

The UK economy shrank by 0.3 per cent in April 2025, its steepest monthly contraction since October 2023, as official data released on June 12 showed a sharp fall in exports and weaker consumer activity.&nbsp;The contraction was significantly worse than economists’ forecast of a 0.1 per cent decline and followed modest growth of 0.2 per cent in March and 0.5 per cent in February.The Office for National Statistics (ONS) attributed the decline primarily to the end of a temporary tax break on property purchases and a collapse in goods exports to the United States following the imposition of new US tariffs.&nbsp;Legal and real estate services, along with car manufacturers, were among the worst-hit sectors.“After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States, with decreases seen across most types of goods,” Liz McKeown, Director of Economic Statistics at the ONS, told the press.Despite the monthly slump, GDP rose 0.7 per cent in the three months to April, but the latest figures have prompted concern about the UK’s growth trajectory amid rising costs and international trade tensions.<h2>Exports plunge amid US tariffs</h2>The most significant blow to April’s output came from a dramatic decline in trade with the US. British goods exports to America dropped by £2 billion ($2.7 billion) in a single month—the largest monthly fall since records began in 1997—driven by tariffs introduced by US President Donald Trump earlier this year.The US imposed wide-ranging duties of up to 25 per cent on key British exports, including steel, aluminium, and automobiles.&nbsp;The car industry, Britain’s top goods exporter to the US, saw output cut and exports tumble as manufacturers scrambled to adjust. One in eight cars built in the UK is exported to the US, underscoring the sector’s vulnerability.Manufacturing as a whole contracted by 0.6 per cent in April, while services—which account for around 80 per cent of UK economic output—shrank by 0.4 per cent. Real estate, legal services, and financial intermediaries suffered sharp declines, with the end of the property tax holiday also causing a drop in housing transactions.Meanwhile, the UK’s trade deficit in goods widened by £4.4 billion ($5.96 billion) to £60 billion ($81.39 billion) in the three months to April. The country’s surplus in services, often a stabilising factor, dipped by £500 million ($678.22 million) to £48.5 billion ($65.78 billion).Though the UK and US announced a preliminary trade deal in early May, it has yet to be fully implemented. A 10 per cent blanket tariff still applies to most British goods, and higher levies on car and steel exports remain in place, with a final agreement expected by July 9.<h2>Tax burden, job cuts add to economic strain</h2>Alongside external trade shocks, domestic policy changes also weighed on output. The rise in employer National Insurance contributions in April, coupled with higher energy, water, and council tax bills, added to business costs.&nbsp;Employers now pay 15 per cent in national insurance contributions, up from 13.8 per cent, on employee earnings above £175 per week ($237.38).Figures from HMRC show that payroll employment fell by 109,000 in May—the largest drop since the first Covid-19 lockdown in 2020. Since Chancellor Rachel Reeves’s autumn budget, more than 250,000 jobs have reportedly been lost.Reeves acknowledged the disappointing figures, calling April a “challenging month” for businesses. However, she reaffirmed her government’s commitment to growth. “Our number one mission is delivering growth to put more money in people’s pockets through our Plan for Change,” she said on June 12.Business sentiment remains cautious, with firms reportedly scaling back hiring and investment due to uncertainty around tariffs and rising labour costs. A survey by Schroders found that 63 per cent of institutional investors and wealth managers view trade tensions and tariffs as the top macroeconomic risk.<h2>Markets react</h2>Financial markets showed a muted response to the GDP figures, with the FTSE 100 initially dipping before edging up slightly. The index had closed at a record high on June 11, buoyed by strong earnings and global investor optimism.Sterling fell by a quarter of a cent against the dollar following the release of the economic data, reflecting concerns over the UK’s growth prospects amid external and internal pressures.While the Bank of England is expected to hold interest rates steady at its next meeting, policymakers face a delicate balancing act between persistent inflation and signs of economic fragility.With growth faltering, exports falling, and businesses reeling from rising costs, the outlook for the UK economy remains highly uncertain—and much may depend on the resolution of the ongoing US tariff standoff in the months ahead.

The Office for National Statistics attributed the decline primarily to the end of a temporary tax break on property purchases and a collapse in goods exports to the United States following the imposition of new US tariffs. 

The UK economy shrank by 0.3 per cent in April 2025, its steepest monthly contraction since October 2023, as official data released on June 12 showed a sharp fall in exports and weaker consumer activity. The contraction was significantly worse than economists’ forecast of a 0.1 per cent decline and followed modest growth of 0.2 per cent in March and 0.5 per cent in February. The Office for National Statistics (ONS) attributed the decline primarily to the end of a temporary tax break on property purchases and a collapse in goods exports to the United States following the imposition of new US tariffs. Legal and real estate services, along with car manufacturers, were among the worst-hit sectors. “After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States, with decreases seen across most types of goods,” Liz McKeown, Director of Economic Statistics at the ONS, told the press. Despite the monthly slump, GDP rose 0.7 per cent in the three months to April, but the latest figures have prompted concern about the UK’s growth trajectory amid rising costs and international trade tensions. Exports plunge amid US tariffs The most significant blow to April’s output came from a dramatic decline in trade with the US. British goods exports to America dropped by £2 billion ($2.7 billion) in a single month—the largest monthly fall since records began in 1997—driven by tariffs introduced by US President Donald Trump earlier this year. The US imposed wide-ranging duties of up to 25 per cent on key British exports, including steel, aluminium, and automobiles. The car industry, Britain’s top goods exporter to the US, saw output cut and exports tumble as manufacturers scrambled to adjust. One in eight cars built in the UK is exported to the US, underscoring the sector’s vulnerability. Manufacturing as a whole contracted by 0.6 per cent in April, while services—which account for around 80 per cent of UK economic output—shrank by 0.4 per cent. Real estate, legal services, and financial intermediaries suffered sharp declines, with the end of the property tax holiday also causing a drop in housing transactions. Meanwhile, the UK’s trade deficit in goods widened by £4.4 billion ($5.96 billion) to £60 billion ($81.39 billion) in the three months to April. The country’s surplus in services, often a stabilising factor, dipped by £500 million ($678.22 million) to £48.5 billion ($65.78 billion). Though the UK and US announced a preliminary trade deal in early May, it has yet to be fully implemented. A 10 per cent blanket tariff still applies to most British goods, and higher levies on car and steel exports remain in place, with a final agreement expected by July 9. Tax burden, job cuts add to economic strain Alongside external trade shocks, domestic policy changes also weighed on output. The rise in employer National Insurance contributions in April, coupled with higher energy, water, and council tax bills, added to business costs. Employers now pay 15 per cent in national insurance contributions, up from 13.8 per cent, on employee earnings above £175 per week ($237.38). Figures from HMRC show that payroll employment fell by 109,000 in May—the largest drop since the first Covid-19 lockdown in 2020. Since Chancellor Rachel Reeves’s autumn budget, more than 250,000 jobs have reportedly been lost. Reeves acknowledged the disappointing figures, calling April a “challenging month” for businesses. However, she reaffirmed her government’s commitment to growth. “Our number one mission is delivering growth to put more money in people’s pockets through our Plan for Change,” she said on June 12. Business sentiment remains cautious, with firms reportedly scaling back hiring and investment due to uncertainty around tariffs and rising labour costs. A survey by Schroders found that 63 per cent of institutional investors and wealth managers view trade tensions and tariffs as the top macroeconomic risk. Markets react Financial markets showed a muted response to the GDP figures, with the FTSE 100 initially dipping before edging up slightly. The index had closed at a record high on June 11, buoyed by strong earnings and global investor optimism. Sterling fell by a quarter of a cent against the dollar following the release of the economic data, reflecting concerns over the UK’s growth prospects amid external and internal pressures. While the Bank of England is expected to hold interest rates steady at its next meeting, policymakers face a delicate balancing act between persistent inflation and signs of economic fragility. With growth faltering, exports falling, and businesses reeling from rising costs, the outlook for the UK economy remains highly uncertain—and much may depend on the resolution of the ongoing US tariff standoff in the months ahead.

The Office for National Statistics attributed the decline primarily to the end of a temporary tax break on property purchases and a collapse in goods exports to the United States following the imposition of new US tariffs.&nbsp;

UK economy contracts sharply in April amid Trump tariffs and property tax shock

As the United Kingdom navigates a politically charged debate over migration, the government has launched a major training initiative aimed at addressing domestic skill shortages while reducing reliance on foreign workers.&nbsp;But this strategy, which aligns with Labour’s broader economic revival plans faces a key dilemma: can local labour be upskilled fast enough to match soaring demand, or will Britain’s growth ambitions falter under worker shortfalls?&nbsp;With a record investment in housing and infrastructure planned, the pressure is mounting to ensure that Britain’s workforce is ready. Experts warn that while the political optics of reducing migration may appeal to voters, economic timelines tell a different story.<h2>UK’s new training policy: building skills, facing bottlenecks</h2>According to Bloomberg, the UK government is committing £3 billion ($4.1 billion) to train 120,000 British workers in sectors such as construction, engineering, and social care. The policy includes the creation of 30,000 new apprenticeships and funding support for adult learners across the country. &nbsp;This effort will be partially funded through a 32 per cent increase in the Immigration Skills Charge, a fee employers pay when they sponsor foreign skilled workers. The move is expected to support an additional 45,000 training placements, helping Britain pivot away from its reliance on overseas labour.&nbsp;Education Secretary Bridget Phillipson stated, “We’re taking our responsibility seriously by providing more routes into employment.”&nbsp;However, this training plan comes at a time when Britain’s infrastructure ambitions are at an all-time high. According to a Boston Consulting Group report cited by Bloomberg, the UK is poised to receive £900 billion ($1.2 trillion) in combined public and private infrastructure investment by the end of 2029. Labour’s promise to build 1.5 million homes is at the centre of this economic vision. &nbsp;Yet, construction, &nbsp;the sector expected to deliver much of this growth and is already battling a shortfall in skilled workers. Many left the country after Brexit, and domestic labour is ageing. Industry leaders argue that the current training pipeline may not be fast or large enough to bridge the gap in time.&nbsp;“You can’t train bricklayers or care workers overnight,” warned a business executive quoted by Bloomberg. “We’ll see bottlenecks, wage inflation, and project delays.”Apprenticeships typically take two to five years before workers become job-ready, while housing and infrastructure targets are already on tight timelines.&nbsp;The Office for Budget Responsibility (OBR) has warned that if migration is cut faster than skills can be developed, the UK could see its GDP growth fall by up to 0.5 percentage points annually.&nbsp;In light of this, the British Chambers of Commerce is calling for a dual-track approach: continue building domestic capability, but also keep migration pathways open for priority sectors. It has recommended updating the shortage occupation list and streamlining visa access for essential foreign workers in construction, health, and social care.<h2>Migrants and the UK economy</h2>While the political debate often casts migration as a challenge, migrants have historically been a pillar of the UK economy. According to the Office for National Statistics (ONS), 18 per cent of the UK workforce is foreign-born, but their contribution to GDP exceeds 23 per cent.&nbsp;Migrants are particularly vital in sectors such as construction, hospitality, logistics, and health and social care. The Institute for Fiscal Studies reports that over 40 per cent of adult social care workers in London and the South East are migrants. In the construction sector, foreign-born workers filled critical gaps for years, a dynamic that has shifted dramatically post-Brexit, resulting in persistent labour shortages.&nbsp;Labour’s recent moves to tighten English-language requirements and make visa extensions more difficult have raised concerns among employers.While politically popular among certain voter bases, these measures risk shrinking the available talent pool at a time when Britain is trying to scale up national development. As the UK transitions to a new labour strategy, policymakers will have to balance domestic training timelines with economic urgency. For now, it appears that migrants remain an essential if politically contentious part of the solution.

Business & Economy: The initiative aims to address domestic skill shortages and reduce reliance on foreign workers. However, experts warn that the rapid upskilling of local labour may hinder Britain growth ambitions.

As the United Kingdom navigates a politically charged debate over migration, the government has launched a major training initiative aimed at addressing domestic skill shortages while reducing reliance on foreign workers. But this strategy, which aligns with Labour’s broader economic revival plans faces a key dilemma: can local labour be upskilled fast enough to match soaring demand, or will Britain’s growth ambitions falter under worker shortfalls? With a record investment in housing and infrastructure planned, the pressure is mounting to ensure that Britain’s workforce is ready. Experts warn that while the political optics of reducing migration may appeal to voters, economic timelines tell a different story. UK’s new training policy: building skills, facing bottlenecks According to Bloomberg, the UK government is committing £3 billion ($4.1 billion) to train 120,000 British workers in sectors such as construction, engineering, and social care. The policy includes the creation of 30,000 new apprenticeships and funding support for adult learners across the country. This effort will be partially funded through a 32 per cent increase in the Immigration Skills Charge, a fee employers pay when they sponsor foreign skilled workers. The move is expected to support an additional 45,000 training placements, helping Britain pivot away from its reliance on overseas labour. Education Secretary Bridget Phillipson stated, “We’re taking our responsibility seriously by providing more routes into employment.” However, this training plan comes at a time when Britain’s infrastructure ambitions are at an all-time high. According to a Boston Consulting Group report cited by Bloomberg, the UK is poised to receive £900 billion ($1.2 trillion) in combined public and private infrastructure investment by the end of 2029. Labour’s promise to build 1.5 million homes is at the centre of this economic vision. Yet, construction, the sector expected to deliver much of this growth and is already battling a shortfall in skilled workers. Many left the country after Brexit, and domestic labour is ageing. Industry leaders argue that the current training pipeline may not be fast or large enough to bridge the gap in time. “You can’t train bricklayers or care workers overnight,” warned a business executive quoted by Bloomberg. “We’ll see bottlenecks, wage inflation, and project delays.” Apprenticeships typically take two to five years before workers become job-ready, while housing and infrastructure targets are already on tight timelines. The Office for Budget Responsibility (OBR) has warned that if migration is cut faster than skills can be developed, the UK could see its GDP growth fall by up to 0.5 percentage points annually. In light of this, the British Chambers of Commerce is calling for a dual-track approach: continue building domestic capability, but also keep migration pathways open for priority sectors. It has recommended updating the shortage occupation list and streamlining visa access for essential foreign workers in construction, health, and social care. Migrants and the UK economy While the political debate often casts migration as a challenge, migrants have historically been a pillar of the UK economy. According to the Office for National Statistics (ONS), 18 per cent of the UK workforce is foreign-born, but their contribution to GDP exceeds 23 per cent. Migrants are particularly vital in sectors such as construction, hospitality, logistics, and health and social care. The Institute for Fiscal Studies reports that over 40 per cent of adult social care workers in London and the South East are migrants. In the construction sector, foreign-born workers filled critical gaps for years, a dynamic that has shifted dramatically post-Brexit, resulting in persistent labour shortages. Labour’s recent moves to tighten English-language requirements and make visa extensions more difficult have raised concerns among employers. While politically popular among certain voter bases, these measures risk shrinking the available talent pool at a time when Britain is trying to scale up national development. As the UK transitions to a new labour strategy, policymakers will have to balance domestic training timelines with economic urgency. For now, it appears that migrants remain an essential if politically contentious part of the solution.

The UK government is investing £3 billion ($4.1 billion) to train 120,000 British workers in sectors like construction, engineering, and social care.&nbsp;

UK to train 120,000 local workers under new training policy: Details here

British consumers are feeling the pinch at the checkout once again, as food inflation in the United Kingdom has climbed to its highest level in a year.&nbsp;The latest data from the British Retail Consortium (BRC) reveals that food inflation rose to 2.8 per cent in May, up from 2.6 per cent in April, marking the fourth consecutive monthly increase.<h2>What’s driving the increase?</h2>According to reports, the primary driver behind this inflationary uptick is the cost of fresh goods, which have seen sharper price increases compared to other food categories. British supermarkets are reportedly under mounting pressure from higher operating expenses, which are largely the result of new fiscal policies introduced by the UK government.&nbsp;According to the British Retail Consortium, the government’s revenue-raising budget has led to a substantial rise in business costs. Retailers are facing a £5 billion (approximately $6.7 billion) increase in operational expenses, which includes a hike in the minimum wage and an increase in payroll taxes.&nbsp;Helen Dickinson, Chief Executive Officer of the BRC, commented on the situation, stating, “It is no surprise that inflation is rearing its head once again,” as quoted by Bloomberg.<h2>Price war predictions in question</h2>Earlier this year, market expectations had tilted towards a potential price war among British grocers after Asda announced plans to cut prices as part of its turnaround strategy. The move sparked a reaction in the stock market, with share prices of larger rivals like Tesco Plc and J Sainsbury Plc declining, as reported by Bloomberg.&nbsp;However, recent developments suggest these concerns may have been premature. Bloomberg Intelligence analyst Charles Allen noted last week that “fears of an aggressive price war may be overdone.”<h2>Policy vs market forces</h2>The rising food inflation presents a policy dilemma for the Bank of England (BoE), especially as markets had earlier anticipated interest rate cuts to support economic growth. But with inflation proving sticky in the grocery sector, traders are now scaling back expectations of BoE rate reductions, according to Bloomberg.While a 2.8 per cent food inflation rate may seem modest compared to pandemic-era peaks, it signals resilient inflationary pressures in one of the most essential consumer sectors.&nbsp;The persistent increase in fresh food prices not only affects household budgets but also threatens to derail broader efforts to control inflation across the UK economy.With no immediate relief in sight for operating costs, British supermarkets find themselves in a balancing act, keeping prices competitive to retain consumers, while absorbing billions in added payroll and tax burdens. As the cost of living debate continues to dominate UK headlines, all eyes will be on the next fiscal measures and Bank of England policy decisions, which could either ease or exacerbate the pressure on retailers and shoppers alike. &nbsp;

Business & Economy: According to the British Retail Consortium, the government’s revenue-raising budget has led to a substantial rise in business costs.

British consumers are feeling the pinch at the checkout once again, as food inflation in the United Kingdom has climbed to its highest level in a year. The latest data from the British Retail Consortium (BRC) reveals that food inflation rose to 2.8 per cent in May, up from 2.6 per cent in April, marking the fourth consecutive monthly increase. What’s driving the increase? According to reports, the primary driver behind this inflationary uptick is the cost of fresh goods, which have seen sharper price increases compared to other food categories. British supermarkets are reportedly under mounting pressure from higher operating expenses, which are largely the result of new fiscal policies introduced by the UK government. According to the British Retail Consortium, the government’s revenue-raising budget has led to a substantial rise in business costs. Retailers are facing a £5 billion (approximately $6.7 billion) increase in operational expenses, which includes a hike in the minimum wage and an increase in payroll taxes. Helen Dickinson, Chief Executive Officer of the BRC, commented on the situation, stating, “It is no surprise that inflation is rearing its head once again,” as quoted by Bloomberg. Price war predictions in question Earlier this year, market expectations had tilted towards a potential price war among British grocers after Asda announced plans to cut prices as part of its turnaround strategy. The move sparked a reaction in the stock market, with share prices of larger rivals like Tesco Plc and J Sainsbury Plc declining, as reported by Bloomberg. However, recent developments suggest these concerns may have been premature. Bloomberg Intelligence analyst Charles Allen noted last week that “fears of an aggressive price war may be overdone.” Policy vs market forces The rising food inflation presents a policy dilemma for the Bank of England (BoE), especially as markets had earlier anticipated interest rate cuts to support economic growth. But with inflation proving sticky in the grocery sector, traders are now scaling back expectations of BoE rate reductions, according to Bloomberg. While a 2.8 per cent food inflation rate may seem modest compared to pandemic-era peaks, it signals resilient inflationary pressures in one of the most essential consumer sectors. The persistent increase in fresh food prices not only affects household budgets but also threatens to derail broader efforts to control inflation across the UK economy. With no immediate relief in sight for operating costs, British supermarkets find themselves in a balancing act, keeping prices competitive to retain consumers, while absorbing billions in added payroll and tax burdens. As the cost of living debate continues to dominate UK headlines, all eyes will be on the next fiscal measures and Bank of England policy decisions, which could either ease or exacerbate the pressure on retailers and shoppers alike.

Food inflation in the UK reached its highest level in a year, reaching 2.8% in May, marking the fourth consecutive monthly increase.

UK food inflation hits one-year high as grocers struggle with rising costs

The Bank of England's (BoE) Monetary Policy Committee (MPC) has voted to lower the benchmark bank rate by 0.25 percentage points to 4.25 per cent, marking a cautious step towards easing policy amid ongoing progress on disinflation.
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This decision, announced on May 08, was passed by a narrow majority of 5-4. While two members advocated for a more significant 0.5 percentage point cut to 4 per cent, and two others argued to keep the rate unchanged at 4.5 per cent.&nbsp;
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The cut had been widely expected, especially after a slowdown in price rises, with inflation cooling to 2.6 per cent in the twelve months to March (from 2.8 per cent in February), as energy prices have retreated and the restrictive monetary stance has helped contain second-round inflationary effects.
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Despite the recent decline in inflation, the MPC remains cautious, stating that interest rates will need to stay in restrictive territory to guard against any persistent inflation pressures. The committee noted that inflationary risks could still shift in either direction, with global trade uncertainties and tariff-related volatility contributing to market fluctuations.
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&ldquo;We expect an increase in inflation this year. It is likely to rise temporarily to 3.7 per cent, partly because of higher energy prices. Inflation is expected to fall back to the 2 per cent target after that&hellip;There is also a lot of uncertainty from global developments, partly because of changes in global trade policies. We are assessing what this could mean for UK inflation closely,&rdquo; said BoE Governor Andrew Bailey.
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&ldquo;We need to be confident that inflation will remain low and stable in a lasting way. We will decide carefully how much further and how fast we can cut interest rates,&rdquo; he added.
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<h2>UK economy's health check</h2>
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The UK economy has shown signs of slowing growth, with GDP growth decelerating since mid-2024 and the labour market loosening. Wage growth, though still elevated, is expected to decline sharply later in the year. Energy prices have fallen, but increases earlier in the year are still expected to push inflation back up to 3.5 per cent by the third quarter of 2025 before easing once more.
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The underlying GDP growth is expected to have been around zero in 2025 Q1, well below the central bank&rsquo;s projection for headline growth of 0.6 per cent. The S&amp;P Global UK composite output PMI declined significantly in April, suggesting downside risks around the near-term outlook. Household spending growth has remained subdued over recent quarters, although real incomes have risen quite strongly such that the saving ratio increased to 11.6 per cent in 2024 Q4, its highest level since the pandemic.
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The country&rsquo;s employment growth has also softened recently, and the labour market has continued to loosen. The ratio of vacancies to unemployment has fallen further and is now judged to be below its equilibrium level.
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The central bank's May Report sets out two illustrative scenarios. In one scenario, there could be weaker supply and more persistence in domestic wages and prices, including from second-round effects related to the near-term increase in CPI inflation. In another scenario, inflationary pressures could ease more quickly owing to greater or longer-lasting weakness in demand relative to supply, in part reflecting uncertainties globally and domestically.
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The committee emphasised that monetary policy is not on a preset path and will be responsive to changes in the economic landscape.
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The future decisions on interest rates will depend on how inflation and the economy evolve, with the goal of returning inflation to the 2 per cent target in the medium term, the committee said in a statement.
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<h2>Who will it help?</h2>
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The Bank of England&rsquo;s recent 25-basis-point interest rate cut is set to benefit homeowners, particularly those looking to buy or remortgage. With a significant portion of UK homeowners on fixed-rate mortgages, the rate reduction is beneficial for those whose fixed-rate terms are ending in 2025, as it could lead to cheaper mortgage deals. While the cut won&rsquo;t impact those with existing fixed-rate mortgages, experts say it may help stimulate the housing market by improving affordability and providing lenders with room to compete, particularly among first-time buyers.
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In addition to this, the rate cut is also expected to benefit consumers and businesses. Borrowers with credit cards and personal loans may see lower interest rates, depending on their credit history. For businesses, particularly small and medium-sized enterprises, lower rates could make borrowing cheaper, providing relief after recent cost increases like the national minimum wage hike. With reduced borrowing costs, firms may have more cash for investment, potentially boosting consumer confidence and spending, helping the UK economy recover.

Business & Economy: Despite the recent decline in inflation, the MPC remains cautious, stating that interest rates will need to stay in restrictive territory

The Bank of England's (BoE) Monetary Policy Committee (MPC) has voted to lower the benchmark bank rate by 0.25 percentage points to 4.25 per cent, marking a cautious step towards easing policy amid ongoing progress on disinflation. This decision, announced on May 08, was passed by a narrow majority of 5-4. While two members advocated for a more significant 0.5 percentage point cut to 4 per cent, and two others argued to keep the rate unchanged at 4.5 per cent. The cut had been widely expected, especially after a slowdown in price rises, with inflation cooling to 2.6 per cent in the twelve months to March (from 2.8 per cent in February), as energy prices have retreated and the restrictive monetary stance has helped contain second-round inflationary effects. Despite the recent decline in inflation, the MPC remains cautious, stating that interest rates will need to stay in restrictive territory to guard against any persistent inflation pressures. The committee noted that inflationary risks could still shift in either direction, with global trade uncertainties and tariff-related volatility contributing to market fluctuations. “We expect an increase in inflation this year. It is likely to rise temporarily to 3.7 per cent, partly because of higher energy prices. Inflation is expected to fall back to the 2 per cent target after that…There is also a lot of uncertainty from global developments, partly because of changes in global trade policies. We are assessing what this could mean for UK inflation closely,” said BoE Governor Andrew Bailey. “We need to be confident that inflation will remain low and stable in a lasting way. We will decide carefully how much further and how fast we can cut interest rates,” he added. UK economy's health check The UK economy has shown signs of slowing growth, with GDP growth decelerating since mid-2024 and the labour market loosening. Wage growth, though still elevated, is expected to decline sharply later in the year. Energy prices have fallen, but increases earlier in the year are still expected to push inflation back up to 3.5 per cent by the third quarter of 2025 before easing once more. The underlying GDP growth is expected to have been around zero in 2025 Q1, well below the central bank’s projection for headline growth of 0.6 per cent. The S&P Global UK composite output PMI declined significantly in April, suggesting downside risks around the near-term outlook. Household spending growth has remained subdued over recent quarters, although real incomes have risen quite strongly such that the saving ratio increased to 11.6 per cent in 2024 Q4, its highest level since the pandemic. The country’s employment growth has also softened recently, and the labour market has continued to loosen. The ratio of vacancies to unemployment has fallen further and is now judged to be below its equilibrium level. The central bank's May Report sets out two illustrative scenarios. In one scenario, there could be weaker supply and more persistence in domestic wages and prices, including from second-round effects related to the near-term increase in CPI inflation. In another scenario, inflationary pressures could ease more quickly owing to greater or longer-lasting weakness in demand relative to supply, in part reflecting uncertainties globally and domestically. The committee emphasised that monetary policy is not on a preset path and will be responsive to changes in the economic landscape. The future decisions on interest rates will depend on how inflation and the economy evolve, with the goal of returning inflation to the 2 per cent target in the medium term, the committee said in a statement. Who will it help? The Bank of England’s recent 25-basis-point interest rate cut is set to benefit homeowners, particularly those looking to buy or remortgage. With a significant portion of UK homeowners on fixed-rate mortgages, the rate reduction is beneficial for those whose fixed-rate terms are ending in 2025, as it could lead to cheaper mortgage deals. While the cut won’t impact those with existing fixed-rate mortgages, experts say it may help stimulate the housing market by improving affordability and providing lenders with room to compete, particularly among first-time buyers. In addition to this, the rate cut is also expected to benefit consumers and businesses. Borrowers with credit cards and personal loans may see lower interest rates, depending on their credit history. For businesses, particularly small and medium-sized enterprises, lower rates could make borrowing cheaper, providing relief after recent cost increases like the national minimum wage hike. With reduced borrowing costs, firms may have more cash for investment, potentially boosting consumer confidence and spending, helping the UK economy recover.

Bank of England reduces interest rates to 4.25% as tariffs hit growth

The UK economy grew by 0.1% in the fourth quarter of 2024, against expectations for a 0.1% decline, according to the Office for National Statistics. Watch this report for more details!

UK economy grows 0.1% in December quarter of 2024

Households in the United Kingdom are hesitant to spend much on big-ticket purchases in the run-up to Christmas. This is according to a study which cited a broadly weak UK economic outlook as the reason.

Research group GFK's mood barometer did rise, but it ended barely above 2024's average. Consumers were somewhat more upbeat about their own financial situations.

However, they remained pessimistic about the economy as a whole and were unwilling to make any large Christmas purchases.

Neil Bellamy, consumer insights director at GFK, said, and I quote, "In December, consumers adopted the holding pattern we've seen for much of 2024."

Bellamy added, "It's the continuing uncharitable view on the UK's general economic situation that's suppressing consumer confidence."

The data will be an additional setback for businesses.

Retailers and hospitality venues are already preparing for tough trade during their most important time of the year.

Consumers escaped a significant portion of the 40 billion pounds or 50.8 billion dollars in tax increases proposed by Chancellor Rachel Reeves in her budget on October 30.

However, their mood is being dampened by a deteriorating jobs market, increased energy prices, and rising mortgage payments.

(With inputs from the agencies)

Households in the United Kingdom are hesitant to spend much on big-ticket purchases in the run-up to Christmas. This is according to a study which cited a broadly weak UK economic outlook as the reason.

Households in the United Kingdom are hesitant to spend much on big-ticket purchases in the run-up to Christmas. This is according to a study which cited a broadly weak UK economic outlook as the reason. Research group GFK's mood barometer did rise, but it ended barely above 2024's average. Consumers were somewhat more upbeat about their own financial situations. However, they remained pessimistic about the economy as a whole and were unwilling to make any large Christmas purchases. Neil Bellamy, consumer insights director at GFK, said, and I quote, "In December, consumers adopted the holding pattern we've seen for much of 2024." Bellamy added, "It's the continuing uncharitable view on the UK's general economic situation that's suppressing consumer confidence." The data will be an additional setback for businesses. Retailers and hospitality venues are already preparing for tough trade during their most important time of the year. Consumers escaped a significant portion of the 40 billion pounds or 50.8 billion dollars in tax increases proposed by Chancellor Rachel Reeves in her budget on October 30. However, their mood is being dampened by a deteriorating jobs market, increased energy prices, and rising mortgage payments. (With inputs from the agencies)

UK consumers set to refrain from big Christmas buys, survey says

New Delhi
Households in the United Kingdom are hesitant to spend much on big-ticket purchases in the run-up to Christmas. This is according to a study which cited a broadly weak UK economic outlook as the reason.
Research group GFK's mood barometer did rise, but it ended barely above 2024's average. Consumers were somewhat more upbeat about their own financial situations.
However, they remained pessimistic about the economy as a whole and were unwilling to make any large Christmas purchases.
Neil Bellamy, consumer insights director at GFK, said, and I quote, "In December, consumers adopted the holding pattern we've seen for much of 2024."
Bellamy added, "It's the continuing uncharitable view on the UK's general economic situation that's suppressing consumer confidence."
The data will be an additional setback for businesses.
Retailers and hospitality venues are already preparing for tough trade during their most important time of the year.
Consumers escaped a significant portion of the 40 billion pounds or 50.8 billion dollars in tax increases proposed by Chancellor Rachel Reeves in her budget on October 30.
However, their mood is being dampened by a deteriorating jobs market, increased energy prices, and rising mortgage payments.
(With inputs from the agencies)

Households in the United Kingdom are hesitant to spend much on big-ticket purchases in the run-up to Christmas. This is according to a study which cited a broadly weak UK economic outlook as the reason.



New Delhi Households in the United Kingdom are hesitant to spend much on big-ticket purchases in the run-up to Christmas. This is according to a study which cited a broadly weak UK economic outlook as the reason. Research group GFK's mood barometer did rise, but it ended barely above 2024's average. Consumers were somewhat more upbeat about their own financial situations. However, they remained pessimistic about the economy as a whole and were unwilling to make any large Christmas purchases. Neil Bellamy, consumer insights director at GFK, said, and I quote, "In December, consumers adopted the holding pattern we've seen for much of 2024." Bellamy added, "It's the continuing uncharitable view on the UK's general economic situation that's suppressing consumer confidence." The data will be an additional setback for businesses. Retailers and hospitality venues are already preparing for tough trade during their most important time of the year. Consumers escaped a significant portion of the 40 billion pounds or 50.8 billion dollars in tax increases proposed by Chancellor Rachel Reeves in her budget on October 30. However, their mood is being dampened by a deteriorating jobs market, increased energy prices, and rising mortgage payments. (With inputs from the agencies)

Britain's economy contracted for the second consecutive month in October, according to official data from the Office for National Statistics.

Gross domestic product fell by 0.1 per cent in October, matching the 0.1 per cent decline recorded in September.

The decline puts the UK on recession watch, marking the first back-to-back monthly contraction since the covid lockdowns in 2020.

Weak performance in oil and gas extraction, retail, pubs, and restaurants weighed on overall output, despite slight gains in telecoms and logistics.

The contraction poses a challenge for the labour government, which marked its first 100 days in office.

Finance minister Rachel Reeves described the figures as 'disappointing' but emphasized policies aimed at long-term growth. She said and I quote,

"The numbers on GDP are disappointing, but it's not possible to turn around more than a decade of poor economic growth and stagnant living standards in just a few months. But you'll see from the plans we've been announcing - whether that is the energy reforms we've published today, the reforms to build one and a half million homes that we published yesterday, the pensions reforms, the creation of a national wealth fund - this government are getting on with the job in improving economic growth and driving up living standards."

The government’s October budget introduced significant tax hikes for businesses and higher borrowing for infrastructure investments.

However, the anticipation of these 'tough' measures is seen as dampening business sentiment, with households and companies delaying spending, hiring, and investment.

The services sector showed no growth in october, while production and construction both shrank.

Amid weak growth, analysts warn that Britain may already be experiencing a recession, with output per head declining for the second consecutive quarter.

The Bank of England, which cut interest rates by 25 basis points in November to 4.75 per cent, faces another critical decision on rates next week.

Prime Minister Keir Starmer’s earlier pledge to achieve the highest economic growth in the G7 has been downgraded to an 'aim.'

With GDP growth stalling, uncertainty over fiscal policies and rising taxes continue to cloud the UK’s economic outlook.

(With inputs from the agencies)

Britain's economy contracted for the second consecutive month in October, according to official data from the Office for National Statistics. Gross domestic product fell by 0.

Britain's economy contracted for the second consecutive month in October, according to official data from the Office for National Statistics. Gross domestic product fell by 0.1 per cent in October, matching the 0.1 per cent decline recorded in September. The decline puts the UK on recession watch, marking the first back-to-back monthly contraction since the covid lockdowns in 2020. Weak performance in oil and gas extraction, retail, pubs, and restaurants weighed on overall output, despite slight gains in telecoms and logistics. The contraction poses a challenge for the labour government, which marked its first 100 days in office. Finance minister Rachel Reeves described the figures as 'disappointing' but emphasized policies aimed at long-term growth. She said and I quote, "The numbers on GDP are disappointing, but it's not possible to turn around more than a decade of poor economic growth and stagnant living standards in just a few months. But you'll see from the plans we've been announcing - whether that is the energy reforms we've published today, the reforms to build one and a half million homes that we published yesterday, the pensions reforms, the creation of a national wealth fund - this government are getting on with the job in improving economic growth and driving up living standards." The government’s October budget introduced significant tax hikes for businesses and higher borrowing for infrastructure investments. However, the anticipation of these 'tough' measures is seen as dampening business sentiment, with households and companies delaying spending, hiring, and investment. The services sector showed no growth in october, while production and construction both shrank. Amid weak growth, analysts warn that Britain may already be experiencing a recession, with output per head declining for the second consecutive quarter. The Bank of England, which cut interest rates by 25 basis points in November to 4.75 per cent, faces another critical decision on rates next week. Prime Minister Keir Starmer’s earlier pledge to achieve the highest economic growth in the G7 has been downgraded to an 'aim.' With GDP growth stalling, uncertainty over fiscal policies and rising taxes continue to cloud the UK’s economic outlook. (With inputs from the agencies)

UK economy shrinks again in October, raising recession fears

New Delhi
Britain's economy contracted for the second consecutive month in October, according to official data from the Office for National Statistics.
Gross domestic product fell by 0.1 per cent in October, matching the 0.1 per cent decline recorded in September.
The decline puts the UK on recession watch, marking the first back-to-back monthly contraction since the covid lockdowns in 2020.
Weak performance in oil and gas extraction, retail, pubs, and restaurants weighed on overall output, despite slight gains in telecoms and logistics.
The contraction poses a challenge for the labour government, which marked its first 100 days in office.
Finance minister Rachel Reeves described the figures as 'disappointing' but emphasized policies aimed at long-term growth. She said and I quote,
"The numbers on GDP are disappointing, but it's not possible to turn around more than a decade of poor economic growth and stagnant living standards in just a few months. But you'll see from the plans we've been announcing - whether that is the energy reforms we've published today, the reforms to build one and a half million homes that we published yesterday, the pensions reforms, the creation of a national wealth fund - this government are getting on with the job in improving economic growth and driving up living standards."
The government’s October budget introduced significant tax hikes for businesses and higher borrowing for infrastructure investments.
However, the anticipation of these 'tough' measures is seen as dampening business sentiment, with households and companies delaying spending, hiring, and investment.
The services sector showed no growth in october, while production and construction both shrank.
Amid weak growth, analysts warn that Britain may already be experiencing a recession, with output per head declining for the second consecutive quarter.
The Bank of England, which cut interest rates by 25 basis points in November to 4.75 per cent, faces another critical decision on rates next week.
Prime Minister Keir Starmer’s earlier pledge to achieve the highest economic growth in the G7 has been downgraded to an 'aim.'
With GDP growth stalling, uncertainty over fiscal policies and rising taxes continue to cloud the UK’s economic outlook.
(With inputs from the agencies)

Britain's economy contracted for the second consecutive month in October, according to official data from the Office for National Statistics.



New Delhi Britain's economy contracted for the second consecutive month in October, according to official data from the Office for National Statistics. Gross domestic product fell by 0.1 per cent in October, matching the 0.1 per cent decline recorded in September. The decline puts the UK on recession watch, marking the first back-to-back monthly contraction since the covid lockdowns in 2020. Weak performance in oil and gas extraction, retail, pubs, and restaurants weighed on overall output, despite slight gains in telecoms and logistics. The contraction poses a challenge for the labour government, which marked its first 100 days in office. Finance minister Rachel Reeves described the figures as 'disappointing' but emphasized policies aimed at long-term growth. She said and I quote, "The numbers on GDP are disappointing, but it's not possible to turn around more than a decade of poor economic growth and stagnant living standards in just a few months. But you'll see from the plans we've been announcing - whether that is the energy reforms we've published today, the reforms to build one and a half million homes that we published yesterday, the pensions reforms, the creation of a national wealth fund - this government are getting on with the job in improving economic growth and driving up living standards." The government’s October budget introduced significant tax hikes for businesses and higher borrowing for infrastructure investments. However, the anticipation of these 'tough' measures is seen as dampening business sentiment, with households and companies delaying spending, hiring, and investment. The services sector showed no growth in october, while production and construction both shrank. Amid weak growth, analysts warn that Britain may already be experiencing a recession, with output per head declining for the second consecutive quarter. The Bank of England, which cut interest rates by 25 basis points in November to 4.75 per cent, faces another critical decision on rates next week. Prime Minister Keir Starmer’s earlier pledge to achieve the highest economic growth in the G7 has been downgraded to an 'aim.' With GDP growth stalling, uncertainty over fiscal policies and rising taxes continue to cloud the UK’s economic outlook. (With inputs from the agencies)

Energy bills in Great Britain are set to rise again in January 2025, with the average annual cost for gas and electricity increasing to $2,190.

This follows a 10 per cent rise in energy costs for the last quarter of 2024, further squeezing household budgets amid rising inflation and mortgage costs.

The new price cap, set by the energy regulator OFGEM, marks a 1.2 per cent increase, adding about $26 to the typical yearly bill.

Although the January increase is modest, bills remain far higher than before the energy crisis caused by the Russia-Ukraine war, when bills had soared past $5,000.

The price cap ensures that energy suppliers can’t charge consumers more than a set amount per unit of gas or electricity.

While the increase will impact most households, it’s particularly tough for lower-income families, including many pensioners, as the government has cut the winter fuel allowance this year.

This means many older people will face higher costs without the usual help, pushing some into poverty.

There are calls for targeted government support to help those most vulnerable during the cold months, especially families and people with lower incomes who may struggle to pay for heating.

Experts are urging consumers to shop around for better energy deals, as switching tariffs could save households up to $176 annually.

Switching to a fixed energy tariff may also provide some protection from future price hikes.

While the price cap has decreased compared to last year, it remains higher than before the energy crisis.

Many are concerned that the volatile energy market will continue, leaving consumers with an uncertain future when it comes to their energy costs.

(With inputs from agencies)

Energy bills in Great Britain are set to rise again in January 2025, with the average annual cost for gas and electricity increasing to $2,190. This follows a 10 per cent rise in energy costs for the last quarter of 2024, further squeezing household budgets amid rising inflation and mortgage costs.

Energy bills in Great Britain are set to rise again in January 2025, with the average annual cost for gas and electricity increasing to $2,190. This follows a 10 per cent rise in energy costs for the last quarter of 2024, further squeezing household budgets amid rising inflation and mortgage costs. The new price cap, set by the energy regulator OFGEM, marks a 1.2 per cent increase, adding about $26 to the typical yearly bill. Although the January increase is modest, bills remain far higher than before the energy crisis caused by the Russia-Ukraine war, when bills had soared past $5,000. The price cap ensures that energy suppliers can’t charge consumers more than a set amount per unit of gas or electricity. While the increase will impact most households, it’s particularly tough for lower-income families, including many pensioners, as the government has cut the winter fuel allowance this year. This means many older people will face higher costs without the usual help, pushing some into poverty. There are calls for targeted government support to help those most vulnerable during the cold months, especially families and people with lower incomes who may struggle to pay for heating. Experts are urging consumers to shop around for better energy deals, as switching tariffs could save households up to $176 annually. Switching to a fixed energy tariff may also provide some protection from future price hikes. While the price cap has decreased compared to last year, it remains higher than before the energy crisis. Many are concerned that the volatile energy market will continue, leaving consumers with an uncertain future when it comes to their energy costs. (With inputs from agencies)

UK Energy bills to rise again in January 2025, straining household budgets

Britain's new finance minister Rachel Reeves announced the biggest tax increases in three decades in her first budget, as she accused the Conservatives of leaving public services broken when they lost July's election after 14 years in power.

Reeves said she would raise taxes by 40 billion pounds a year - much of it falling on businesses - to cover a 22 billion-pound shortfall inherited by her Labour Party, the lack of compensation payments, including for victims of an infected blood scandal, and under-funding of public services.

"Any Chancellor standing here today would face this reality," Reeves said in her budget speech.&nbsp;

"And any responsible Chancellor would take action. That is why today, I am restoring stability to our public finances and rebuilding our public service."

Reeves has said she will not let public debt balloon, mindful of how former Conservative Prime Minister Liz Truss sent the bond market into a tailspin two years ago with unfunded tax cut plans.

<a href="https://www.wionews.com/business-economy/britain-faces-warnings-of-a-tech-exodus-over-tax-plans-ahead-of-high-stakes-budget-769608">Also read:&nbsp;Tax plans worries spark UK tech exodus fears ahead of budget</a>

Initial reaction to Reeves speech suggested investors were taking her plans well, with government bond prices rising further as she addressed parliament.

According to the Institute for Fiscal Studies think-tank, tax hikes of 40 billion pounds would be equivalent to 1.25 per cent&nbsp;of economic output, surpassed in recent history only in 1993 by a budget plan under the Conservatives which raised taxes to shore up the public finances after a recession and currency crisis.

Reeves said she would raise the rate of social security contributions paid by employers by 1.2 percentage points to 15 per cent&nbsp;from April next year, and lower a threshold at which firms start to pay it - moves which would raise an extra 25 billion pounds a year in five years' time.

Company bosses have warned that higher taxes on them, combined with planned new protections for workers and an increased minimum wage, could undermine Labour's promises to turn Britain into the fastest-growing Group of Seven economy.

Watch |&nbsp;UK: Birthrate Falls To Record Low In England And Wales

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Reeves announced a string of other revenue-raising moves including changes to the tax rules on capital gains and inheritances and tax paid by private equity executives and non-domiciled residents.

Prime Minister Keir Starmer had warned "those with the broadest shoulders" will have to pay more tax.

But she ruled out making more individuals pay basic and higher income tax rates by extending a freeze on the threshold for payments beyond its scheduled expiry in the 2028-29 tax year.&nbsp;

She also extended a freeze on fuel duty and a cut a tax on beer served in pubs.

Reeves also said Britain's economy was forecast to grow by more than expected this year and in 2025 but by less than previously forecast in the following three years.

Reeves was likely to announce changes to the government's budget rules to allow her to borrow more to invest in infrastructure and accelerate Britain's economic growth pace.

Bond strategists say they are confident that Reeves - a former Bank of England economist - will be more cautious than former Prime Minister Liz Truss, whose big tax-cut plans hammered British debt prices in 2022 and led to her resignation.

Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION&nbsp;audience.

Britain's new finance minister Rachel Reeves announced the biggest tax increases in three decades in her first budget, as she accused the Conservatives of leaving public services broken when they lost July's election after 14 years in power.

Britain's new finance minister Rachel Reeves announced the biggest tax increases in three decades in her first budget, as she accused the Conservatives of leaving public services broken when they lost July's election after 14 years in power. Reeves said she would raise taxes by 40 billion pounds a year - much of it falling on businesses - to cover a 22 billion-pound shortfall inherited by her Labour Party, the lack of compensation payments, including for victims of an infected blood scandal, and under-funding of public services. "Any Chancellor standing here today would face this reality," Reeves said in her budget speech. "And any responsible Chancellor would take action. That is why today, I am restoring stability to our public finances and rebuilding our public service." Reeves has said she will not let public debt balloon, mindful of how former Conservative Prime Minister Liz Truss sent the bond market into a tailspin two years ago with unfunded tax cut plans. Also read: Tax plans worries spark UK tech exodus fears ahead of budget Initial reaction to Reeves speech suggested investors were taking her plans well, with government bond prices rising further as she addressed parliament. According to the Institute for Fiscal Studies think-tank, tax hikes of 40 billion pounds would be equivalent to 1.25 per cent of economic output, surpassed in recent history only in 1993 by a budget plan under the Conservatives which raised taxes to shore up the public finances after a recession and currency crisis. Reeves said she would raise the rate of social security contributions paid by employers by 1.2 percentage points to 15 per cent from April next year, and lower a threshold at which firms start to pay it - moves which would raise an extra 25 billion pounds a year in five years' time. Company bosses have warned that higher taxes on them, combined with planned new protections for workers and an increased minimum wage, could undermine Labour's promises to turn Britain into the fastest-growing Group of Seven economy. Watch | UK: Birthrate Falls To Record Low In England And Wales × Reeves announced a string of other revenue-raising moves including changes to the tax rules on capital gains and inheritances and tax paid by private equity executives and non-domiciled residents. Prime Minister Keir Starmer had warned "those with the broadest shoulders" will have to pay more tax. But she ruled out making more individuals pay basic and higher income tax rates by extending a freeze on the threshold for payments beyond its scheduled expiry in the 2028-29 tax year. She also extended a freeze on fuel duty and a cut a tax on beer served in pubs. Reeves also said Britain's economy was forecast to grow by more than expected this year and in 2025 but by less than previously forecast in the following three years. Reeves was likely to announce changes to the government's budget rules to allow her to borrow more to invest in infrastructure and accelerate Britain's economic growth pace. Bond strategists say they are confident that Reeves - a former Bank of England economist - will be more cautious than former Prime Minister Liz Truss, whose big tax-cut plans hammered British debt prices in 2022 and led to her resignation. Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

UK finance minister lifts taxes by $51.8bn in first Labour budget

Britain's smaller listed companies can be freed from a "doom loop" driven by plummeting valuations and higher costs and regulation, a think tank said on Thursday, with help from broader tax exemptions and incentives.

According to New Financial, smaller firms account for only 8 per cent of Britain's stock exchange value. However, they account for over 80 per cent of listed UK companies, provide key jobs and investment, and can become tomorrow's stock market darlings with support from the government, regulators, and industry.

The think tank proposed two weeks before Finance Minister Rachel Reeves delivers her first budget on Oct. 30 to extend exemptions from stamp duty, a tax on share trading, to include the smallest 250 listed companies and differential rates on capital gains or dividends on British firms.

"Making recommendations on tax and incentives a few weeks before a budget ... is perhaps a foolish exercise.

"But there is an opportunity for a new government focused on growth to adjust incentives for investment in smaller companies," it said in an analysis of the decline in smaller listed companies.

Reeves, whose party swept to power in July on a promise to boost Britain's economic growth, &nbsp;has ruled out raising the rates of income tax, national insurance, and value-added tax. But she said she must fill a 22 billion pound ($29 billion) gap in the public finances.

Institutional and retail investors' demand collapse has fallen mostly on the smaller listed companies. The number of smaller company market debuts plunged by 80 per cent to just 22 over the past decade, while the value raised by new issues has dropped by 90 per cent, New Financial said.

Meanwhile, UK smaller company funds have experienced their 36th straight month of outflows, while the number of local authority pension schemes with a reserved allocation to the sector has dwindled from 18 to just one over the past decade.

But Australia, Canada, and Sweden, where smaller companies have been thriving, are offering hope. "A concerted effort by government, regulators, and the industry can set smaller companies back on track," the think tank said.

This article includes reporting from Reuters.

Britain's smaller listed companies can be freed from a "doom loop" driven by plummeting valuations and higher costs and regulation, a think tank said on Thursday, with help from broader tax exemptions and incentives.

Britain's smaller listed companies can be freed from a "doom loop" driven by plummeting valuations and higher costs and regulation, a think tank said on Thursday, with help from broader tax exemptions and incentives. According to New Financial, smaller firms account for only 8 per cent of Britain's stock exchange value. However, they account for over 80 per cent of listed UK companies, provide key jobs and investment, and can become tomorrow's stock market darlings with support from the government, regulators, and industry. The think tank proposed two weeks before Finance Minister Rachel Reeves delivers her first budget on Oct. 30 to extend exemptions from stamp duty, a tax on share trading, to include the smallest 250 listed companies and differential rates on capital gains or dividends on British firms. "Making recommendations on tax and incentives a few weeks before a budget ... is perhaps a foolish exercise. "But there is an opportunity for a new government focused on growth to adjust incentives for investment in smaller companies," it said in an analysis of the decline in smaller listed companies. Reeves, whose party swept to power in July on a promise to boost Britain's economic growth, has ruled out raising the rates of income tax, national insurance, and value-added tax. But she said she must fill a 22 billion pound ($29 billion) gap in the public finances. Institutional and retail investors' demand collapse has fallen mostly on the smaller listed companies. The number of smaller company market debuts plunged by 80 per cent to just 22 over the past decade, while the value raised by new issues has dropped by 90 per cent, New Financial said. Meanwhile, UK smaller company funds have experienced their 36th straight month of outflows, while the number of local authority pension schemes with a reserved allocation to the sector has dwindled from 18 to just one over the past decade. But Australia, Canada, and Sweden, where smaller companies have been thriving, are offering hope. "A concerted effort by government, regulators, and the industry can set smaller companies back on track," the think tank said. This article includes reporting from Reuters.

Think tank says smaller UK firms need support to break the ‘doom loop’

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UK finance minister lifts taxes by $51.8bn in first Labour budget

Think tank says smaller UK firms need support to break the ‘doom loop’