Amazon Web Services, the cloud computing unit of Internet giant Amazon.com Inc., said on Wednesday that it plans to spend 8 billion pounds ($10.45 billion) in Britain over the next five years to build, operate and maintain data centres.

The investment project will add up to 14 billion pounds to the country's gross domestic product by the end of 2028 while supporting more than 14,000 jobs at British businesses, according to the company.

The project reflects an acceleration in the pace of Amazon's investment in Britain. Since 2022, AWS has invested £3 billion in facilities in London and Manchester.

"Our team that builds our data centres globally take into account multiple levers that they have to look at before they can decide where to put data centres...from power to water to the local environment," Tanuja Randery, a managing director at AWS, told Reuters.

She singled out the use of artificial intelligence as among the factors driving demand for cloud services.

The company has invested heavily across Europe this year, announcing a 15.7 billion euro investment in Spain and another 7.8 billion euros in Germany.

Many large corporate customers that had hit the pause button on cloud computing spending last year have started to spend once again, analysts and executives said, with interest in artificial intelligence driving a rebound of growth in the $270 billion cloud infrastructure market.

British finance minister Rachel Reeves, who has been courting foreign investors ahead of an investment summit on Oct. 14, welcomed the investment.

The government said the data centres would be sited to support demand in London and to the west, but Amazon would not disclose their exact locations for security reasons.

"The government is also actively engaged in conversations with the company about investments in other parts of the UK," the finance ministry said.

Amazon Web Services, the cloud computing unit of Internet giant Amazon.com Inc., said on Wednesday that it plans to spend 8 billion pounds ($10.45 billion) in Britain over the next five years to build, operate and maintain data centres.

Amazon Web Services, the cloud computing unit of Internet giant Amazon.com Inc., said on Wednesday that it plans to spend 8 billion pounds ($10.45 billion) in Britain over the next five years to build, operate and maintain data centres. The investment project will add up to 14 billion pounds to the country's gross domestic product by the end of 2028 while supporting more than 14,000 jobs at British businesses, according to the company. The project reflects an acceleration in the pace of Amazon's investment in Britain. Since 2022, AWS has invested £3 billion in facilities in London and Manchester. "Our team that builds our data centres globally take into account multiple levers that they have to look at before they can decide where to put data centres...from power to water to the local environment," Tanuja Randery, a managing director at AWS, told Reuters. She singled out the use of artificial intelligence as among the factors driving demand for cloud services. The company has invested heavily across Europe this year, announcing a 15.7 billion euro investment in Spain and another 7.8 billion euros in Germany. Many large corporate customers that had hit the pause button on cloud computing spending last year have started to spend once again, analysts and executives said, with interest in artificial intelligence driving a rebound of growth in the $270 billion cloud infrastructure market. British finance minister Rachel Reeves, who has been courting foreign investors ahead of an investment summit on Oct. 14, welcomed the investment. The government said the data centres would be sited to support demand in London and to the west, but Amazon would not disclose their exact locations for security reasons. "The government is also actively engaged in conversations with the company about investments in other parts of the UK," the finance ministry said.

Amazon to fuel UK economy with $10.45 billion cloud expansion

According to a report, Britain needs an extra one trillion pounds ($1.3 trillion) of investment over the next decade to achieve economic growth.

New British Prime Minister Keir Starmer said he wanted the economy to achieve annual growth of 2.5 per cent when campaigning in the run-up to July 4's election - a rate Britain has not regularly reached since before the 2008 financial crisis.

According to a report by the UK financial services lobby group Capital Markets Industry Taskforce, an annual growth rate of 3 per cent would necessitate an extra investment of 100 billion pounds a year over the coming decade, especially in energy, housing and venture capital.

The investment could come out of the six trillion pounds in long-term capital in Britain's pensions and insurance sector, said Nigel Wilson, the report's lead author and former boss of Legal &amp; General, in a dialogue with Reuters.

"We've underinvested in the UK for such a long time, there's a massive gap between the other G7 countries and ourselves," he said.

"We have the long-term capital in the UK, it needs to be reallocated."

The British economy needs an extra 50 billion pounds each year of energy investment as it aims to meet net zero targets, 30 billion pounds in housing, and 20-30 billion in venture capital, the report said.

The government should consider incentives to investments, such as reducing taxes on shares for retail investors, the report added.

UK pensions have a "significantly lower" allocation to domestic and unlisted equities compared to most developed market pension systems around the world, according to a separate report published on Friday by think tank New Financial.

UK pensions could as much as double their allocations and still be in line with the pensions industry in other advanced markets, the report said.

While attempting to increase UK pensions investment in domestic startups, the UK government has called for a review of Britain's pension system.

According to a report, Britain needs an extra one trillion pounds ($1.3 trillion) of investment over the next decade to achieve economic growth. New British Prime Minister Keir Starmer said he wanted the economy to achieve annual growth of 2.

According to a report, Britain needs an extra one trillion pounds ($1.3 trillion) of investment over the next decade to achieve economic growth. New British Prime Minister Keir Starmer said he wanted the economy to achieve annual growth of 2.5 per cent when campaigning in the run-up to July 4's election - a rate Britain has not regularly reached since before the 2008 financial crisis. According to a report by the UK financial services lobby group Capital Markets Industry Taskforce, an annual growth rate of 3 per cent would necessitate an extra investment of 100 billion pounds a year over the coming decade, especially in energy, housing and venture capital. The investment could come out of the six trillion pounds in long-term capital in Britain's pensions and insurance sector, said Nigel Wilson, the report's lead author and former boss of Legal & General, in a dialogue with Reuters. "We've underinvested in the UK for such a long time, there's a massive gap between the other G7 countries and ourselves," he said. "We have the long-term capital in the UK, it needs to be reallocated." The British economy needs an extra 50 billion pounds each year of energy investment as it aims to meet net zero targets, 30 billion pounds in housing, and 20-30 billion in venture capital, the report said. The government should consider incentives to investments, such as reducing taxes on shares for retail investors, the report added. UK pensions have a "significantly lower" allocation to domestic and unlisted equities compared to most developed market pension systems around the world, according to a separate report published on Friday by think tank New Financial. UK pensions could as much as double their allocations and still be in line with the pensions industry in other advanced markets, the report said. While attempting to increase UK pensions investment in domestic startups, the UK government has called for a review of Britain's pension system.

Report reveals Britain requires an additional $1.3 trillion investment to fuel economic growth

A blood test for over-40s which checks for 200 types of disease, including most common cancers, could save the economy £12 billion a year if it was adopted by the NHS, researchers claim. Watch in for more details!

Blood test for over-40s could save UK economy billions: Study

Britain’s finance minister Rachel Reeves announced on Monday (July 29) that the country’s public finances are facing a £22 billion ($28.29bn) shortfall inherited from the Conservative government.

"We have inherited a projected overspend of £22 billion ($28 billion) this year that was covered up by the party opposite," said Reeves, who took office following Labour’s landslide victory over the Conservatives on July 4.

Also watch |&nbsp;UK's financial landscape amidst rate cuts

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/uks-financial-landscape-amidst-rate-cuts-736193/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>
</div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

Reeves, who addressed lawmakers with a detailed audit, warned that the unaddressed overspend would lead to a 25 per cent increase in the budget deficit this year. Her first budget will be presented on October 30.

"To reduce the pressure on public finances, I have already taken steps to cut spending by £5.5 billion ($7.07bn) this year and over £8.0 billion ($10.29bn) next year," she announced.

Reeves described the overspend as "not sustainable" and slammed the previous Conservative administration under Rishi Sunak for avoiding difficult decisions.

The finance chief also noted that the Labour government, led by Prime Minister Keir Starmer, will release its first spending and taxation statement on October 30.&nbsp;

She added that this budget aims to "fix the foundations of our economy" and will launch a multi-year spending review to set departmental budgets for the next three years.

The Conservative opposition rejected Labour’s claims and accused the new government of using the fiscal assessment to justify upcoming tax hikes. Conservative finance spokesperson Jeremy Hunt slammed Reeves for allegedly preparing the ground for tax increases she did not disclose during the campaign.

"The audit is widely viewed as a precursor to potential infrastructure spending cuts and some tax increases, despite Labour’s campaign promise not to raise the main rates levied on workers," said Hunt.

Media reports before&nbsp;Monday’s statement, including those from The Sunday Times, pointed out that Reeves’ team had identified a public finance shortfall of around £20 billion.

The UK deficit, the gap between government revenue from taxes and its expenditures, was approximately £120 billion ($154.54bn) for the fiscal year ending in March.

In response, shadow chancellor Jeremy Hunt accused Reeves of an “utterly bogus attempt to hoodwink the public” over public sector pay rises. 
 
“In her first big moment, she breaks that trust with an utterly bogus attempt to hoodwink the public about the choices she has,” Hunt said. 
 
“Over 50 times in the election, they told us they had no plans to raise taxes. Now in a U-turn that will forever shame this Labour government, she is laying the ground to break her word, and when she does, her first Budget will become the biggest betrayal in history by a new chancellor, and working families will never forgive her.” 
&nbsp;

(With inputs from agencies)

Britain’s finance minister Rachel Reeves announced on Monday (July 29) that the country’s public finances are facing a £22 billion ($28.29bn) shortfall inherited from the Conservative government.

Britain’s finance minister Rachel Reeves announced on Monday (July 29) that the country’s public finances are facing a £22 billion ($28.29bn) shortfall inherited from the Conservative government. "We have inherited a projected overspend of £22 billion ($28 billion) this year that was covered up by the party opposite," said Reeves, who took office following Labour’s landslide victory over the Conservatives on July 4. Also watch | UK's financial landscape amidst rate cuts × Reeves, who addressed lawmakers with a detailed audit, warned that the unaddressed overspend would lead to a 25 per cent increase in the budget deficit this year. Her first budget will be presented on October 30. "To reduce the pressure on public finances, I have already taken steps to cut spending by £5.5 billion ($7.07bn) this year and over £8.0 billion ($10.29bn) next year," she announced. Reeves described the overspend as "not sustainable" and slammed the previous Conservative administration under Rishi Sunak for avoiding difficult decisions. The finance chief also noted that the Labour government, led by Prime Minister Keir Starmer, will release its first spending and taxation statement on October 30. She added that this budget aims to "fix the foundations of our economy" and will launch a multi-year spending review to set departmental budgets for the next three years. The Conservative opposition rejected Labour’s claims and accused the new government of using the fiscal assessment to justify upcoming tax hikes. Conservative finance spokesperson Jeremy Hunt slammed Reeves for allegedly preparing the ground for tax increases she did not disclose during the campaign. "The audit is widely viewed as a precursor to potential infrastructure spending cuts and some tax increases, despite Labour’s campaign promise not to raise the main rates levied on workers," said Hunt. Media reports before Monday’s statement, including those from The Sunday Times, pointed out that Reeves’ team had identified a public finance shortfall of around £20 billion. The UK deficit, the gap between government revenue from taxes and its expenditures, was approximately £120 billion ($154.54bn) for the fiscal year ending in March. In response, shadow chancellor Jeremy Hunt accused Reeves of an “utterly bogus attempt to hoodwink the public” over public sector pay rises. “In her first big moment, she breaks that trust with an utterly bogus attempt to hoodwink the public about the choices she has,” Hunt said. “Over 50 times in the election, they told us they had no plans to raise taxes. Now in a U-turn that will forever shame this Labour government, she is laying the ground to break her word, and when she does, her first Budget will become the biggest betrayal in history by a new chancellor, and working families will never forgive her.” (With inputs from agencies)

UK Labour government accused of laying groundwork for tax hike

The pace of wage growth for UK workers eased in the three months leading up to the end of May but remained at levels that would normally be too high for the Bank of England to keep inflation at its 2 per cent target. This comes as the BOE left interest rates unchanged.

Data from the Office for National Statistics (ONS) showed an average weekly earnings increase (excluding bonuses and adjustments) of 5.7 per cent (year on year). The earnings in total over the same period also increased by 5.7 per cent.

The figures were in step with the middle ground of what economists polled by Reuters had predicted. For the three months up to April, the annual rate of growth in regular pay was 6.0 per cent on average, while total earnings growth was 5.9 per cent. The Bank of England is due to announce its next interest rate decision in two weeks' time. After this week’s surprise inflation figures, financial markets see a roughly one-in-three chance of an August rate cut.

Furthermore, the Thursday announcement from the Office for National Statistics highlighted a delay in the changeover to a new edition of the Labour Force Survey, previously scheduled for September. Although wage increases have recently slowed, the trend toward higher pay has failed to materialise for many workers. Voting patterns suggest that a tightening labour market could lead to a pay squeeze for many households. The BoE should tread carefully.

The pace of wage growth for UK workers eased in the three months leading up to the end of May but remained at levels that would normally be too high for the Bank of England to keep inflation at its 2 per cent target.

The pace of wage growth for UK workers eased in the three months leading up to the end of May but remained at levels that would normally be too high for the Bank of England to keep inflation at its 2 per cent target. This comes as the BOE left interest rates unchanged. Data from the Office for National Statistics (ONS) showed an average weekly earnings increase (excluding bonuses and adjustments) of 5.7 per cent (year on year). The earnings in total over the same period also increased by 5.7 per cent. The figures were in step with the middle ground of what economists polled by Reuters had predicted. For the three months up to April, the annual rate of growth in regular pay was 6.0 per cent on average, while total earnings growth was 5.9 per cent. The Bank of England is due to announce its next interest rate decision in two weeks' time. After this week’s surprise inflation figures, financial markets see a roughly one-in-three chance of an August rate cut. Furthermore, the Thursday announcement from the Office for National Statistics highlighted a delay in the changeover to a new edition of the Labour Force Survey, previously scheduled for September. Although wage increases have recently slowed, the trend toward higher pay has failed to materialise for many workers. Voting patterns suggest that a tightening labour market could lead to a pay squeeze for many households. The BoE should tread carefully.

UK wage growth deceleration: BoE faces dilemma amid persistent inflationary pressures

UK economists are predicting slow expansion from the past to continue amid growing skepticism about Keir Starmer's newly-elected government to boost growth, a survey cited by Bloomberg showed.

Economists expect a slightly faster growth of 0.8 per cent in 2024 and 1.3 per cent in 2025. These projections are up 0.1 percentage points compared to the previous survey.

The forecasters also raise doubts over Labour party's plans for UK's long-term growth, while anticipating a looser fiscal policy under the new finance minister Rachel Reeves.

Reeves had earlier mentioned how it's a long-way to go for the economy to revive. 'We've just got started, there's a lot more to do, but I'm determined to fulfil that number one mission of this incoming Labour government to grow our economy and create good jobs right across the UK,' she said.

Reeves also seemed optimistic about the blitz of policy reforms aimed at boosting the economy. 'Well I hope that the plans that I've set in motion this week - the reform of the planning system, establishing the National Wealth Fund to co-invest with businesses, leveraging in billions of pounds of private sector investment - is what's needed to grow our economy and create good jobs right across the UK. There's a huge amount of work to be done. I've been in post for a week now, we've done more to reform the planning system in the first 72 hours I was in this role than the previous government did in 14 years.'

However, economists doubt the efficiency of reforms to propel UK's growth among G7 nations, as eyed by the new government. The coming months will be crucial to determine UK's growth trajectory.

UK economists are predicting slow expansion from the past to continue amid growing skepticism about Keir Starmer's newly-elected government to boost growth, a survey cited by Bloomberg showed.

UK economists are predicting slow expansion from the past to continue amid growing skepticism about Keir Starmer's newly-elected government to boost growth, a survey cited by Bloomberg showed. Economists expect a slightly faster growth of 0.8 per cent in 2024 and 1.3 per cent in 2025. These projections are up 0.1 percentage points compared to the previous survey. The forecasters also raise doubts over Labour party's plans for UK's long-term growth, while anticipating a looser fiscal policy under the new finance minister Rachel Reeves. Reeves had earlier mentioned how it's a long-way to go for the economy to revive. 'We've just got started, there's a lot more to do, but I'm determined to fulfil that number one mission of this incoming Labour government to grow our economy and create good jobs right across the UK,' she said. Reeves also seemed optimistic about the blitz of policy reforms aimed at boosting the economy. 'Well I hope that the plans that I've set in motion this week - the reform of the planning system, establishing the National Wealth Fund to co-invest with businesses, leveraging in billions of pounds of private sector investment - is what's needed to grow our economy and create good jobs right across the UK. There's a huge amount of work to be done. I've been in post for a week now, we've done more to reform the planning system in the first 72 hours I was in this role than the previous government did in 14 years.' However, economists doubt the efficiency of reforms to propel UK's growth among G7 nations, as eyed by the new government. The coming months will be crucial to determine UK's growth trajectory.

UK economists doubt Labour party's ability to boost growth

Britain's economy grew 0.4 per cent in May, stronger than expected and offering new Prime Minister Keir Starmer a boost at the beginning of his mandate.&nbsp; 
 
The 0.4 per cent rise, driven significantly by surging housing construction, was double the 0.2 per cent increase forecast by a Reuters poll of economists. 
 
The Office for National Statistics announced across-the-board increases in activity pointing to services, manufacturing, and construction.&nbsp; 
 
Most dramatically of all, construction rose 1.9 per cent—mainly driven by the housing sector. 
 
The UK economy expanded by 0.9 per cent in the three months to May, its highest growth rate since Q3 2021, while it also came in hotter than consensus expectations for a 0.7 per cent rise. 
 
Last month the Bank of England had forecast second-quarter growth of 0.5 per cent, highlighting&nbsp;the unexpected strength of May's figures. 
 
"The economy grew strongly in May with all the main sectors seeing increases," said Head of Economic Statistics at ONS, Liz McKeown.&nbsp; 
 
She added that many wholesalers and retailers rebounded from a weak start in April to underpin good economic performance. 
 
This can be very encouraging data to take on board for the new government amidst all the headwinds that would prepare it for the economic challenges ahead, demonstrating the resilience and recovery in many sectors of the economy. 
 
(With inputs from Reuters)

Britain's economy grew 0.4 per cent in May, stronger than expected and offering new Prime Minister Keir Starmer a boost at the beginning of his mandate. The 0.4 per cent rise, driven significantly by surging housing construction, was double the 0.

Britain's economy grew 0.4 per cent in May, stronger than expected and offering new Prime Minister Keir Starmer a boost at the beginning of his mandate. The 0.4 per cent rise, driven significantly by surging housing construction, was double the 0.2 per cent increase forecast by a Reuters poll of economists. The Office for National Statistics announced across-the-board increases in activity pointing to services, manufacturing, and construction. Most dramatically of all, construction rose 1.9 per cent—mainly driven by the housing sector. The UK economy expanded by 0.9 per cent in the three months to May, its highest growth rate since Q3 2021, while it also came in hotter than consensus expectations for a 0.7 per cent rise. Last month the Bank of England had forecast second-quarter growth of 0.5 per cent, highlighting the unexpected strength of May's figures. "The economy grew strongly in May with all the main sectors seeing increases," said Head of Economic Statistics at ONS, Liz McKeown. She added that many wholesalers and retailers rebounded from a weak start in April to underpin good economic performance. This can be very encouraging data to take on board for the new government amidst all the headwinds that would prepare it for the economic challenges ahead, demonstrating the resilience and recovery in many sectors of the economy. (With inputs from Reuters)

UK economic output surged by 0.4 per cent in May, exceeding expectations

The International Monetary Fund (IMF) has warned that the United Kingdom, under its new Labour government, faces tough decisions due to high public debt.

In its annual economic review, the IMF stressed the need to balance public spending while stabilising debt, which is nearing 100 per cent of GDP.

This challenge arises as the country requires significant investment in sectors like healthcare, which suffers from chronic underfunding and an ageing population.

Additionally, the IMF called for ambitious reforms to boost growth.

For consumers, this means potential changes in tax policies.

The IMF suggested that the government might need to increase tax revenues by raising carbon, inheritance, and property taxes, and broadening the VAT base.

While these measures aim to control debt, they could impact household budgets and consumer spending.

The IMF also noted a soft landing for the economy after a mild recession last year, predicting 0.7 per cent growth in 2024, with a rise to 1.5 per cent in 2025 and 1.7 per cent in 2026.

Inflation is expected to hit 2.5 per cent temporarily by year-end but is currently on target.

Despite challenges like weak productivity and an ageing population, increased immigration has helped mitigate negative effects, with Brexit impacts gradually fading.

The Labour Party, led by Keir Starmer, won a landslide victory, ending 14 years of conservative rule.

New finance minister Rachel Reeves aims to stimulate growth, focusing on infrastructure projects, including onshore wind power and housing.

Consumers can expect a period of adjustment with potential tax hikes and a focus on long-term economic stability and growth, which could improve public services and infrastructure in the future.

The International Monetary Fund (IMF) has warned that the United Kingdom, under its new Labour government, faces tough decisions due to high public debt. In its annual economic review, the IMF stressed the need to balance public spending while stabilising debt, which is nearing 100 per cent of GDP.

The International Monetary Fund (IMF) has warned that the United Kingdom, under its new Labour government, faces tough decisions due to high public debt. In its annual economic review, the IMF stressed the need to balance public spending while stabilising debt, which is nearing 100 per cent of GDP. This challenge arises as the country requires significant investment in sectors like healthcare, which suffers from chronic underfunding and an ageing population. Additionally, the IMF called for ambitious reforms to boost growth. For consumers, this means potential changes in tax policies. The IMF suggested that the government might need to increase tax revenues by raising carbon, inheritance, and property taxes, and broadening the VAT base. While these measures aim to control debt, they could impact household budgets and consumer spending. The IMF also noted a soft landing for the economy after a mild recession last year, predicting 0.7 per cent growth in 2024, with a rise to 1.5 per cent in 2025 and 1.7 per cent in 2026. Inflation is expected to hit 2.5 per cent temporarily by year-end but is currently on target. Despite challenges like weak productivity and an ageing population, increased immigration has helped mitigate negative effects, with Brexit impacts gradually fading. The Labour Party, led by Keir Starmer, won a landslide victory, ending 14 years of conservative rule. New finance minister Rachel Reeves aims to stimulate growth, focusing on infrastructure projects, including onshore wind power and housing. Consumers can expect a period of adjustment with potential tax hikes and a focus on long-term economic stability and growth, which could improve public services and infrastructure in the future.

UK faces fiscal tightrope: IMF urges reforms amid high debt

Rachel Reeves becomes Britain's first female finance minister after the Labour Party's landslide election victory on Friday.

Reeves, born on February 13, 1979, is a former chess champion and an ex-Bank of England economist who joined the party at the age of 16. She became the Labour's finance policy chief in 2021 and then served as the shadow Chancellor of the Exchequer. She has been a member of Parliament for Leeds West from 2010 to 2024. Now, the main question is: what will be her opening 'gambit' in this tricky fiscal situation?

The party has promised investments in health and education and also stressed the need to balance the books. Reeves has emphasised the need for fiscal stability amid public debt nearing 100 per cent of GDP, a level not seen since the 1960s. Reeves said in her opening remarks post-victory, 'And as Chancellor, I will put forward a new charter for budget responsibility, a new fiscal lock guaranteeing in law that any government making permanent and significant tax and spending changes will be subject to an independent forecast from the Office for Budget Responsibility.'

Reeves also criticised previous financial reforms. 'Never again. Never again will we allow a repeat of the devastation that Liz Truss and the Tory party have inflicted upon family finances. Never again will a prime minister or chancellor be allowed to rush through plans that are uncosted, unscrutinised and wholly detached from economic reality,' she said.

Labour Party leader Keir Starmer has been vocal about boosting economic growth and the need for private capital investments. The party has announced reforms in the pensions and savings industry, which could potentially help Britain's businesses. Speculations surround tax reforms. However, analysts at JP Morgan expect the party's policies to be 'neutral' for the sector.

British Pound and Stocks surged on Friday following Labour's victory. But can this growth be sustained as economic realities kick in? Reeves seems confident about the future when she says, 'What people will be asking themselves at the next election is this - are me and my family better off with a Conservative government? And the answer is no.'

Rachel Reeves becomes Britain's first female finance minister after the Labour Party's landslide election victory on Friday. Reeves, born on February 13, 1979, is a former chess champion and an ex-Bank of England economist who joined the party at the age of 16.

Rachel Reeves becomes Britain's first female finance minister after the Labour Party's landslide election victory on Friday. Reeves, born on February 13, 1979, is a former chess champion and an ex-Bank of England economist who joined the party at the age of 16. She became the Labour's finance policy chief in 2021 and then served as the shadow Chancellor of the Exchequer. She has been a member of Parliament for Leeds West from 2010 to 2024. Now, the main question is: what will be her opening 'gambit' in this tricky fiscal situation? The party has promised investments in health and education and also stressed the need to balance the books. Reeves has emphasised the need for fiscal stability amid public debt nearing 100 per cent of GDP, a level not seen since the 1960s. Reeves said in her opening remarks post-victory, 'And as Chancellor, I will put forward a new charter for budget responsibility, a new fiscal lock guaranteeing in law that any government making permanent and significant tax and spending changes will be subject to an independent forecast from the Office for Budget Responsibility.' Reeves also criticised previous financial reforms. 'Never again. Never again will we allow a repeat of the devastation that Liz Truss and the Tory party have inflicted upon family finances. Never again will a prime minister or chancellor be allowed to rush through plans that are uncosted, unscrutinised and wholly detached from economic reality,' she said. Labour Party leader Keir Starmer has been vocal about boosting economic growth and the need for private capital investments. The party has announced reforms in the pensions and savings industry, which could potentially help Britain's businesses. Speculations surround tax reforms. However, analysts at JP Morgan expect the party's policies to be 'neutral' for the sector. British Pound and Stocks surged on Friday following Labour's victory. But can this growth be sustained as economic realities kick in? Reeves seems confident about the future when she says, 'What people will be asking themselves at the next election is this - are me and my family better off with a Conservative government? And the answer is no.'

Rachel Reeves's first 'move': Britain gets its first female Finance Minister

Britain's economy bounced back from recession faster than initially reported in the first quarter of this year, according to revised data from the Office for National Statistics (ONS) released on Friday.

The country's gross domestic product (GDP) grew by 0.7 per cent from the previous quarter, surpassing the earlier estimate of 0.6 per cent growth. However, things are still a bit uncertain as the nation gears up for a crucial election next week.

In the second half of 2023, Britain's GDP experienced two consecutive quarters of decline. Despite the recent positive growth, the overall economic outlook remains weak, which presents challenges for Prime Minister Rishi Sunak and his Conservative Party leading up to the election.

Opinion polls predict that the Labour Party, led by Keir Starmer, will secure a comfortable victory.

The first-quarter GDP was only 0.3 per cent higher than the previous year, showing some improvement from the initial estimate of 0.2 per cent.

However, when it comes to real household disposable income per person, things weren't as positive. In the first quarter of 2024, it was 0.6 per cent lower compared to the final quarter of 2019, before the COVID-19 pandemic hit.

Adam Corlett, a principal economist at the Resolution Foundation, pointed out that income growth has significantly declined during this parliamentary term, making it the worst since the 1950s and the third worst since 1910.

He stressed that addressing this "great living standards slowdown" will be a critical challenge for the next government.

Since the last election, Britain's economy has faced a slew of obstacles, including the lasting impact of the pandemic on the labour force, rising inflation due to Russia's invasion of Ukraine, and post-Brexit trade issues.

In the first quarter of 2024, the economy grew by 1.8 per cent compared to the final quarter of 2019, making it the weakest performer among the G7 economies, except for Germany. However, France and Japan haven't fared much better.

Despite a solid start to 2024, the outlook remains challenging. The first quarter saw the fastest growth since the last quarter of 2021, and the Bank of England (BOE) estimates a 0.5 per cent GDP growth for the second quarter.

The ONS data offers some relief, showing a 2.4 per cent increase in real household disposable income per person over the past year, driven by rapid wage growth in a tight labour market. GDP per person rose quarterly for the first time in two years, although it's still 0.6 per cent lower than a year ago.

The BOE sees the strong growth in the first half of the year as a rebound from last year's weakness rather than a sustained period of expansion, estimating the underlying growth rate at around 0.25 per cent per quarter.

Government budget forecasters are more optimistic, predicting annual growth to rise from 0.8 per cent this year to nearly 2 per cent in the coming years.

Keir Starmer has criticised these forecasts as overly pessimistic, vowing to achieve the highest sustained growth among the G7 countries through reforms such as easing planning controls to speed up infrastructure development and constructing 1.5 million new homes.

However, Britain hasn't consistently grown faster than 2 per cent annually since before the 2008 financial crisis. Economists attribute this to a slowdown in productivity growth, which has been worsened by weak investment.

Furthermore, ONS data revealed a decline in foreign direct investment in Britain for the fifth time in six quarters during January-March, further highlighting the economic challenges ahead.

(With inputs from Reuters)

Britain's economy bounced back from recession faster than initially reported in the first quarter of this year, according to revised data from the Office for National Statistics (ONS) released on Friday.

Britain's economy bounced back from recession faster than initially reported in the first quarter of this year, according to revised data from the Office for National Statistics (ONS) released on Friday. The country's gross domestic product (GDP) grew by 0.7 per cent from the previous quarter, surpassing the earlier estimate of 0.6 per cent growth. However, things are still a bit uncertain as the nation gears up for a crucial election next week. In the second half of 2023, Britain's GDP experienced two consecutive quarters of decline. Despite the recent positive growth, the overall economic outlook remains weak, which presents challenges for Prime Minister Rishi Sunak and his Conservative Party leading up to the election. Opinion polls predict that the Labour Party, led by Keir Starmer, will secure a comfortable victory. The first-quarter GDP was only 0.3 per cent higher than the previous year, showing some improvement from the initial estimate of 0.2 per cent. However, when it comes to real household disposable income per person, things weren't as positive. In the first quarter of 2024, it was 0.6 per cent lower compared to the final quarter of 2019, before the COVID-19 pandemic hit. Adam Corlett, a principal economist at the Resolution Foundation, pointed out that income growth has significantly declined during this parliamentary term, making it the worst since the 1950s and the third worst since 1910. He stressed that addressing this "great living standards slowdown" will be a critical challenge for the next government. Since the last election, Britain's economy has faced a slew of obstacles, including the lasting impact of the pandemic on the labour force, rising inflation due to Russia's invasion of Ukraine, and post-Brexit trade issues. In the first quarter of 2024, the economy grew by 1.8 per cent compared to the final quarter of 2019, making it the weakest performer among the G7 economies, except for Germany. However, France and Japan haven't fared much better. Despite a solid start to 2024, the outlook remains challenging. The first quarter saw the fastest growth since the last quarter of 2021, and the Bank of England (BOE) estimates a 0.5 per cent GDP growth for the second quarter. The ONS data offers some relief, showing a 2.4 per cent increase in real household disposable income per person over the past year, driven by rapid wage growth in a tight labour market. GDP per person rose quarterly for the first time in two years, although it's still 0.6 per cent lower than a year ago. The BOE sees the strong growth in the first half of the year as a rebound from last year's weakness rather than a sustained period of expansion, estimating the underlying growth rate at around 0.25 per cent per quarter. Government budget forecasters are more optimistic, predicting annual growth to rise from 0.8 per cent this year to nearly 2 per cent in the coming years. Keir Starmer has criticised these forecasts as overly pessimistic, vowing to achieve the highest sustained growth among the G7 countries through reforms such as easing planning controls to speed up infrastructure development and constructing 1.5 million new homes. However, Britain hasn't consistently grown faster than 2 per cent annually since before the 2008 financial crisis. Economists attribute this to a slowdown in productivity growth, which has been worsened by weak investment. Furthermore, ONS data revealed a decline in foreign direct investment in Britain for the fifth time in six quarters during January-March, further highlighting the economic challenges ahead. (With inputs from Reuters)

UK economy exits recession faster than expected, faces election challenges

British Prime Minister Rishi Sunak faced rigorous questions from audience during a high-stakes televised debate on Thursday. During the debate, Sunak also addressed allegations that Tory insiders were betting on the election. Responding to questions, Sunak said that he was "incredibly angry" and promised to "boot out" anyone found to have broken gambling laws.

Gravitas: Rishi Sunak heckled, grilled by angry citizens during televised election debate

As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened.

Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023.

However, despite this rapprochement, some of Labour’s proposed policies could still impact the sector's profitability.

Starmer’s Labour has promised to improve the financial stability of households, many of which have been struggling due to more than two years of mortgage market instability and a cost-of-living crisis.

This includes a review of the advantages of longer-term fixed-rate mortgages, intending to protect homeowners from sudden interest rate changes and make homeownership more attainable.

Analysts, lenders, and brokers believe that this could result in broader changes in mortgage and financial products, potentially shifting the balance in favour of consumers.

In the UK, traditional mortgage products differ from those in the US, Germany, Denmark, and the Netherlands as they put all the interest rate risks on borrowers. Unlike in these countries, long-term fixed-rate mortgages are more common.

According to Reuters, Daniel Austin, CEO of ASK Partners, pointed out that a 10-year fixed-rate mortgage is always more expensive, which creates a potential cost barrier for such products in the UK.

British lenders manage risk differently, often through interest rate swaps, which have become more expensive due to recent political and economic turmoil.

While Labour has ambitious policies, it is not anticipated to implement a bank windfall tax or make significant changes to the Bank of England's interest payments to banks, both of which were previously under consideration.

This aligns with Starmer's overall pro-growth position, which is widely believed to be advantageous for UK banks.

However, some Labour policies may reduce bank profits in the long run. The party's commitment to establishing up to 350 'banking hubs' over the next five years contradicts the cost-cutting strategies of many banks. Shadow finance minister Rachel Reeves characterised this plan as a means to rejuvenate communities affected by widespread branch closures.

The 'Freedom to Buy' scheme by Labour is designed to help 80,000 first-time buyers over five years. However, it's unlikely to have a significant impact on banks' mortgage volumes, which total over one million annually.

To improve the situation, the industry needs to educate customers about how they can optimise their finances by switching their savings or mortgage products to achieve better returns.

Furthermore, the overall context of declining interest rates is expected to put pressure on bank profits. James Daley, the managing director of Fairer Finance, highlighted that banks' profits will face additional scrutiny in the credit card and current account markets as consumer value becomes a focus of regulatory attention.

(With inputs from Reuters)

As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened. Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023.

As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened. Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023. However, despite this rapprochement, some of Labour’s proposed policies could still impact the sector's profitability. Starmer’s Labour has promised to improve the financial stability of households, many of which have been struggling due to more than two years of mortgage market instability and a cost-of-living crisis. This includes a review of the advantages of longer-term fixed-rate mortgages, intending to protect homeowners from sudden interest rate changes and make homeownership more attainable. Analysts, lenders, and brokers believe that this could result in broader changes in mortgage and financial products, potentially shifting the balance in favour of consumers. In the UK, traditional mortgage products differ from those in the US, Germany, Denmark, and the Netherlands as they put all the interest rate risks on borrowers. Unlike in these countries, long-term fixed-rate mortgages are more common. According to Reuters, Daniel Austin, CEO of ASK Partners, pointed out that a 10-year fixed-rate mortgage is always more expensive, which creates a potential cost barrier for such products in the UK. British lenders manage risk differently, often through interest rate swaps, which have become more expensive due to recent political and economic turmoil. While Labour has ambitious policies, it is not anticipated to implement a bank windfall tax or make significant changes to the Bank of England's interest payments to banks, both of which were previously under consideration. This aligns with Starmer's overall pro-growth position, which is widely believed to be advantageous for UK banks. However, some Labour policies may reduce bank profits in the long run. The party's commitment to establishing up to 350 'banking hubs' over the next five years contradicts the cost-cutting strategies of many banks. Shadow finance minister Rachel Reeves characterised this plan as a means to rejuvenate communities affected by widespread branch closures. The 'Freedom to Buy' scheme by Labour is designed to help 80,000 first-time buyers over five years. However, it's unlikely to have a significant impact on banks' mortgage volumes, which total over one million annually. To improve the situation, the industry needs to educate customers about how they can optimise their finances by switching their savings or mortgage products to achieve better returns. Furthermore, the overall context of declining interest rates is expected to put pressure on bank profits. James Daley, the managing director of Fairer Finance, highlighted that banks' profits will face additional scrutiny in the credit card and current account markets as consumer value becomes a focus of regulatory attention. (With inputs from Reuters)

Britain's labour party woos banks but risks profit squeeze

The UK housing market is in no way welcoming to first-time buyers, as the price of houses increases by 1.1 per cent in the year to April 2024. At this rate, the average house price is now positioned at 281,000 British Pounds, sending worse prospects for people with an appetite to enter the property market.&nbsp;

The 1.1 per cent increase in average house prices followed a 0.9 per cent rise in March, the second consecutive month of annual price growth following eight months of decline, according to the Office for National Statistics. Average private rents rose by 8.7 per cent in May, a slight drop from 8.9 per cent in the previous month.&nbsp;

Across the 12 months to April 2024, average house prices in England increased to £298,000, reflecting a 0.6 per cent annual rise. In Wales, prices went up to £208,000, a rise of 0.4 per cent, while Scotland saw prices go up by 4.5 per cent to £190,000. In Northern Ireland, there was an annual rise of 4 per cent to £178,000.&nbsp;

The rent market also has the same tinge of stress on housing affordability. The average rents in England went up by 8.6 per cent to £1,301, while that for Wales and Scotland increased by 8.5 per cent to £736 and by 9.3 per cent to £957, respectively. The nation having the highest rent inflation was Northern Ireland with a year-on-year rise in average rents of 10.3 per cent in March. Within England itself, London saw the highest at 10.1 per cent, as against the North East that notched up the lowest at 6.1 per cent. Across Great Britain, Kensington and Chelsea had the highest average rent at £3,397, while Dumfries and Galloway had the lowest at £480.&nbsp;

Anna Clare Harper, head of sustainable investment adviser GreenResi, stated house prices have increased by 1.1 per cent to £281,000, but for most younger people this number in isolation meant very little. The important question for the under-40s is whether decent housing is affordable, and as Harper said, it depends more on regulation than it does on house prices.&nbsp;

First-time buyer initiatives have been put forward by both main UK political parties. Labour intends to make the Mortgage Guarantee Scheme permanent. Under the scheme, which was announced by the previous government, lenders pay a fee in return for the government underwriting the riskiest part of a mortgage. In contrast, the Conservatives take aim at delivering 1.6 million new homes by 2029, more than Labour's commitment of 1.5 million over the same period. These targets would require at least 300,000 new homes to be built in England alone every year, needing huge reforms in the planning system.&nbsp;

However, if not done properly, new schemes could just further postpone the event. New-build prices are going through the roof and are rising far more quickly than existing homes.&nbsp;

With the constantly changing UK housing market, opportunities for first-time buyers and renters do not cut the mustard. Against the backdrop of political initiative promises and market dynamics, the future of affordable housing would assume centre stage in the UK for many.&nbsp;

The UK housing market is in no way welcoming to first-time buyers, as the price of houses increases by 1.1 per cent in the year to April 2024. At this rate, the average house price is now positioned at 281,000 British Pounds, sending worse prospects for people with an appetite to enter the property market.

The UK housing market is in no way welcoming to first-time buyers, as the price of houses increases by 1.1 per cent in the year to April 2024. At this rate, the average house price is now positioned at 281,000 British Pounds, sending worse prospects for people with an appetite to enter the property market. The 1.1 per cent increase in average house prices followed a 0.9 per cent rise in March, the second consecutive month of annual price growth following eight months of decline, according to the Office for National Statistics. Average private rents rose by 8.7 per cent in May, a slight drop from 8.9 per cent in the previous month. Across the 12 months to April 2024, average house prices in England increased to £298,000, reflecting a 0.6 per cent annual rise. In Wales, prices went up to £208,000, a rise of 0.4 per cent, while Scotland saw prices go up by 4.5 per cent to £190,000. In Northern Ireland, there was an annual rise of 4 per cent to £178,000. The rent market also has the same tinge of stress on housing affordability. The average rents in England went up by 8.6 per cent to £1,301, while that for Wales and Scotland increased by 8.5 per cent to £736 and by 9.3 per cent to £957, respectively. The nation having the highest rent inflation was Northern Ireland with a year-on-year rise in average rents of 10.3 per cent in March. Within England itself, London saw the highest at 10.1 per cent, as against the North East that notched up the lowest at 6.1 per cent. Across Great Britain, Kensington and Chelsea had the highest average rent at £3,397, while Dumfries and Galloway had the lowest at £480. Anna Clare Harper, head of sustainable investment adviser GreenResi, stated house prices have increased by 1.1 per cent to £281,000, but for most younger people this number in isolation meant very little. The important question for the under-40s is whether decent housing is affordable, and as Harper said, it depends more on regulation than it does on house prices. First-time buyer initiatives have been put forward by both main UK political parties. Labour intends to make the Mortgage Guarantee Scheme permanent. Under the scheme, which was announced by the previous government, lenders pay a fee in return for the government underwriting the riskiest part of a mortgage. In contrast, the Conservatives take aim at delivering 1.6 million new homes by 2029, more than Labour's commitment of 1.5 million over the same period. These targets would require at least 300,000 new homes to be built in England alone every year, needing huge reforms in the planning system. However, if not done properly, new schemes could just further postpone the event. New-build prices are going through the roof and are rising far more quickly than existing homes. With the constantly changing UK housing market, opportunities for first-time buyers and renters do not cut the mustard. Against the backdrop of political initiative promises and market dynamics, the future of affordable housing would assume centre stage in the UK for many.

Affordable housing, a utopian dream in the UK

UK Prime Minister Rishi Sunak has achieved one of his five goals set at the start of 2023 by halving inflation.

He may further celebrate progress this week as consumer price growth is anticipated to approach the 2 per cent target, marking its lowest level since July 2021.

However, the challenge lies in persuading the electorate of his contribution to this improvement.

Nineteen months ago, the UK experienced its most severe price shock in decades, with inflation reaching a peak of 11.1 per cent, surpassing that of major advanced economies.

The subsequent rapid decline, the fastest since the 1970s, suggests a potential interest rate cut from 5.25 per cent as early as next month, which could potentially alleviate costs for mortgage borrowers and businesses.

Despite the optimistic inflation data, there are still ongoing economic challenges.

Real wages continue to be below the levels before the financial crisis, with prices currently 23 per cent higher than they were in 2019.

Food prices have surged by approximately 30 per cent since 2021, which is a significant change compared to the previous 13 years.

Although GDP growth has bounced back, output per capita remains 0.7 per cent weaker than it was a year earlier.

The Conservative party, currently behind Labour in the opinion polls and recovering from recent election defeats, plans to use the economic upturn to their advantage as they gear up for an upcoming general election.

Chancellor of the Exchequer Jeremy Hunt echoed Sunak's sentiments, emphasising the progress made in tackling inflation.

Hunt and Sunak are facing scepticism over their ability to reduce inflation, as the ultimate responsibility lies with the Bank of England.

However, economist Thomas Pugh suggests that if inflation falls to 2.1 per cent or lower, it could pave the way for the Monetary Policy Committee to implement interest rate cuts in June.

The overall economic situation is looking positive. Real wages are increasing at the fastest rate since September 2015, and the economy has rebounded strongly from a slight recession in 2023.

Additionally, energy bills and food inflation have decreased, which is relieving financial pressure on lower-income households.

(With inputs from Bloomberg)

UK Prime Minister Rishi Sunak has achieved one of his five goals set at the start of 2023 by halving inflation. He may further celebrate progress this week as consumer price growth is anticipated to approach the 2 per cent target, marking its lowest level since July 2021.

UK Prime Minister Rishi Sunak has achieved one of his five goals set at the start of 2023 by halving inflation. He may further celebrate progress this week as consumer price growth is anticipated to approach the 2 per cent target, marking its lowest level since July 2021. However, the challenge lies in persuading the electorate of his contribution to this improvement. Nineteen months ago, the UK experienced its most severe price shock in decades, with inflation reaching a peak of 11.1 per cent, surpassing that of major advanced economies. The subsequent rapid decline, the fastest since the 1970s, suggests a potential interest rate cut from 5.25 per cent as early as next month, which could potentially alleviate costs for mortgage borrowers and businesses. Despite the optimistic inflation data, there are still ongoing economic challenges. Real wages continue to be below the levels before the financial crisis, with prices currently 23 per cent higher than they were in 2019. Food prices have surged by approximately 30 per cent since 2021, which is a significant change compared to the previous 13 years. Although GDP growth has bounced back, output per capita remains 0.7 per cent weaker than it was a year earlier. The Conservative party, currently behind Labour in the opinion polls and recovering from recent election defeats, plans to use the economic upturn to their advantage as they gear up for an upcoming general election. Chancellor of the Exchequer Jeremy Hunt echoed Sunak's sentiments, emphasising the progress made in tackling inflation. Hunt and Sunak are facing scepticism over their ability to reduce inflation, as the ultimate responsibility lies with the Bank of England. However, economist Thomas Pugh suggests that if inflation falls to 2.1 per cent or lower, it could pave the way for the Monetary Policy Committee to implement interest rate cuts in June. The overall economic situation is looking positive. Real wages are increasing at the fastest rate since September 2015, and the economy has rebounded strongly from a slight recession in 2023. Additionally, energy bills and food inflation have decreased, which is relieving financial pressure on lower-income households. (With inputs from Bloomberg)

Sunak's inflation victory faces voter doubts

Rishi Sunak has insisted that the Conservatives are united despite rampant speculation about a plot to replace him as prime minister before the general election.

UK PM Rishi Sunak faces leadership speculation, says 'Tories absolutely united'

UK Prime Minister Rishi Sunak has insisted "the economy is turning a corner" as he urged mutinous Tory MPs to "stick to the plan" amid reports of a plot to oust him before the election.

UK PM Rishi Sunak urges terrified Tories to 'stick with' his economy plan as he faces flak from MPs

A leading think tank, the Institute for Fiscal Studies (IFS), has cautioned that tax cuts announced in Wednesday's Budget won't fully offset the impact of tax increases and rising prices, as per a BBC report.

Regardless of a $12.74 billion cut to National Insurance announced by Chancellor Jeremy Hunt, the IFS predicts that households will still be worse off at the upcoming election than they were at the start of the current parliament.

The chancellor's strategy of tax cuts is part of a long-term reform plan aimed at shifting the tax burden away from workers, encouraging employment.

While the National Insurance cut is expected to benefit millions of workers, the IFS highlights that it only partially reverses the effects of other tax changes, such as freezing tax thresholds, which have resulted in a higher proportion of salaries being taken in tax.

According to the IFS, the tax changes will lead to varying patterns of gains and losses depending on income.

While an average earner may enjoy a tax cut of about $433.14 in the upcoming financial year, the gains diminish over time, with the average earner expected to be only $178.35 better off by 2027.

The think tank also notes that for every $1.27 given back to workers through the National Insurance cuts, $1.66 to $2.42 will have been taken away due to threshold changes between 2021 and 2024, indicating a net loss for taxpayers.

Labour leader Keir Starmer has criticised the government's strategy, accusing it of giving with one hand and taking even more with the other.

With an eye on the upcoming general election, the state of the economy and individuals' personal finances is under scrutiny.

The Conservatives hope slight upgrades to growth forecasts provided by the Office for Budget Responsibility will help change the narrative, but the IFS warns that overall living standards remain "dismal".

While the government's measures are expected to slightly increase borrowing in the next financial year, the Office for Budget Responsibility predicts borrowing to remain broadly in line with previous forecasts.

However, the country's debt as a proportion of GDP is set to rise over the next four years before marginally decreasing, with debt still expected to be 92.9 per cent of GDP in 2028-29, higher than the 89 per cent expected this year.

A leading think tank, the Institute for Fiscal Studies (IFS), has cautioned that tax cuts announced in Wednesday's Budget won't fully offset the impact of tax increases and rising prices, as per a BBC report.

A leading think tank, the Institute for Fiscal Studies (IFS), has cautioned that tax cuts announced in Wednesday's Budget won't fully offset the impact of tax increases and rising prices, as per a BBC report. Regardless of a $12.74 billion cut to National Insurance announced by Chancellor Jeremy Hunt, the IFS predicts that households will still be worse off at the upcoming election than they were at the start of the current parliament. The chancellor's strategy of tax cuts is part of a long-term reform plan aimed at shifting the tax burden away from workers, encouraging employment. While the National Insurance cut is expected to benefit millions of workers, the IFS highlights that it only partially reverses the effects of other tax changes, such as freezing tax thresholds, which have resulted in a higher proportion of salaries being taken in tax. According to the IFS, the tax changes will lead to varying patterns of gains and losses depending on income. While an average earner may enjoy a tax cut of about $433.14 in the upcoming financial year, the gains diminish over time, with the average earner expected to be only $178.35 better off by 2027. The think tank also notes that for every $1.27 given back to workers through the National Insurance cuts, $1.66 to $2.42 will have been taken away due to threshold changes between 2021 and 2024, indicating a net loss for taxpayers. Labour leader Keir Starmer has criticised the government's strategy, accusing it of giving with one hand and taking even more with the other. With an eye on the upcoming general election, the state of the economy and individuals' personal finances is under scrutiny. The Conservatives hope slight upgrades to growth forecasts provided by the Office for Budget Responsibility will help change the narrative, but the IFS warns that overall living standards remain "dismal". While the government's measures are expected to slightly increase borrowing in the next financial year, the Office for Budget Responsibility predicts borrowing to remain broadly in line with previous forecasts. However, the country's debt as a proportion of GDP is set to rise over the next four years before marginally decreasing, with debt still expected to be 92.9 per cent of GDP in 2028-29, higher than the 89 per cent expected this year.

UK Budget tax cuts won't offset rising prices, warns think tank

Consumer confidence in the UK declined in February, indicating that people are not prepared to make large purchases despite increasing indications that the economy is emerging from its brief slump.

Is UK still the best spot to set up your shop?

The UK economy officially entered a technical recession marking the first time since 2012. This comes after two consecutive quarters of negative growth.

Recession hits UK as economy shrinks, negative growth triggers this

Britain slid into recession last year on elevated inflation and a cost-of-living crisis, official data showed Thursday, dealing a blow to Prime Minister Rishi Sunak before this year's general election.

Gross domestic product shrank 0.3 percent in the fourth quarter of 2023 after contracting 0.1 percent in the prior three months, the Office for National Statistics (ONS) said in a statement.

Also read:&nbsp;<a data-ctorig="https://www.wionews.com/business-economy/uk-and-india-nearing-a-free-trade-agreement-622994" data-cturl="https://www.google.com/url?client=internal-element-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/business-economy/uk-and-india-nearing-a-free-trade-agreement-622994&amp;sa=U&amp;ved=2ahUKEwjXwLOPh62EAxVDa2wGHYM-AkYQFnoECAIQAg&amp;usg=AOvVaw2NoJcyWybgFp-OWdclV9TK" dir="ltr" href="https://www.wionews.com/business-economy/uk-and-india-nearing-a-free-trade-agreement-622994" target="_blank">UK&nbsp;and India nearing a free trade agreement: Reports</a>

That places the economy in recession, which is defined as two successive quarters of falling GDP.

The ONS noted that all main sectors shrank in the fourth quarter -- with manufacturing, construction and wholesale being the biggest drags on growth -- but added the economy was broadly flat overall in 2023.

Sunak, whose governing Conservatives are trailing Keir Starmer's main opposition Labour Party ahead of the election due this year, has pledged to grow the economy as one of his top five priorities.

News of the recession comes as voters go to the polls in two by-elections on Thursday, with the Conservatives fearful of losing one-time strongholds in Wellingborough, central England, and Kingswood in the southwest.

<h2>- 'Mild recession' -</h2>

"The news that the UK slipped into technical recession in 2023, will be a blow for the prime minister on a day when he faces the prospect of losing two by-elections," said Capital Economics analyst Ruth Gregory.

"But this recession is as mild as they come and timely indicators suggest it is already nearing an end."

Finance minister Jeremy Hunt noted that stubborn inflation and high interest rates were behind the output fall -- but insisted the economy was "turning a corner".

"While interest rates are high -- so the Bank of England can bring inflation down -- low growth is not a surprise.

Watch:&nbsp;UK Economy shrinks in September quarter

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/uk-economy-shrinks-in-september-quarter-672713/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>
</div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

"But there are signs the British economy is turning a corner; forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low.

"Although times are still tough for many families, we must stick to the plan -- cutting taxes on work and business to build a stronger economy."

Confirmation of the recession comes one day after separate official data showed that UK inflation held at 4.0 percent in January from December, or double the Bank of England's target rate.

The January reading was better than market expectations of an increase to 4.2 percent, but inflation nevertheless remains elevated, extending a cost-of-living crisis for millions of people in Britain.

Hunt added that bringing down elevated inflation remained the government's "top" goal.

"High inflation is the single biggest barrier to growth which is why halving it has been our top priority," he said.

<h2>- Sunak pledge 'in tatters' -</h2>

But Labour slammed the government's stewardship of the economy, adding that Sunak's vow to deliver growth was in "tatters".

"The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off," said Labour finance spokeswoman Rachel Reeves.

"This is Rishi Sunak's recession and the news will be deeply worrying for families and business across Britain."

Also read:&nbsp;<a data-ctorig="https://www.wionews.com/videos/brexit-costs-uk-economy-178-bn-679249" data-cturl="https://www.google.com/url?client=internal-element-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/videos/brexit-costs-uk-economy-178-bn-679249&amp;sa=U&amp;ved=2ahUKEwjXwLOPh62EAxVDa2wGHYM-AkYQFnoECAEQAg&amp;usg=AOvVaw0I6DZZCf5fuAH6uFq-du6T" dir="ltr" href="https://www.wionews.com/videos/brexit-costs-uk-economy-178-bn-679249" target="_blank">Brexit costs&nbsp;UK economy&nbsp;$178 bn</a>

The BoE's main interest rate sits at a 16-year high of 5.25 percent, as it seeks to bring inflation back to its 2.0-percent target.

However, rising interest rates also ramp up loan costs for individuals and businesses, further worsening the nation's cost-of-living crunch.

Yet annual UK inflation has tumbled since striking a 41-year peak of 11.1 percent in October 2022.

Global inflation soared as the invasion of Ukraine by major oil and gas producer Russia two years ago sent energy prices rocketing.

In response, the world's major central banks helped to cool inflation by hiking borrowing costs.

Britain slid into recession last year on elevated inflation and a cost-of-living crisis, official data showed Thursday, dealing a blow to Prime Minister Rishi Sunak before this year's general election.

Britain slid into recession last year on elevated inflation and a cost-of-living crisis, official data showed Thursday, dealing a blow to Prime Minister Rishi Sunak before this year's general election. Gross domestic product shrank 0.3 percent in the fourth quarter of 2023 after contracting 0.1 percent in the prior three months, the Office for National Statistics (ONS) said in a statement. Also read: UK and India nearing a free trade agreement: Reports That places the economy in recession, which is defined as two successive quarters of falling GDP. The ONS noted that all main sectors shrank in the fourth quarter -- with manufacturing, construction and wholesale being the biggest drags on growth -- but added the economy was broadly flat overall in 2023. Sunak, whose governing Conservatives are trailing Keir Starmer's main opposition Labour Party ahead of the election due this year, has pledged to grow the economy as one of his top five priorities. News of the recession comes as voters go to the polls in two by-elections on Thursday, with the Conservatives fearful of losing one-time strongholds in Wellingborough, central England, and Kingswood in the southwest. - 'Mild recession' - "The news that the UK slipped into technical recession in 2023, will be a blow for the prime minister on a day when he faces the prospect of losing two by-elections," said Capital Economics analyst Ruth Gregory. "But this recession is as mild as they come and timely indicators suggest it is already nearing an end." Finance minister Jeremy Hunt noted that stubborn inflation and high interest rates were behind the output fall -- but insisted the economy was "turning a corner". "While interest rates are high -- so the Bank of England can bring inflation down -- low growth is not a surprise. Watch: UK Economy shrinks in September quarter × "But there are signs the British economy is turning a corner; forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low. "Although times are still tough for many families, we must stick to the plan -- cutting taxes on work and business to build a stronger economy." Confirmation of the recession comes one day after separate official data showed that UK inflation held at 4.0 percent in January from December, or double the Bank of England's target rate. The January reading was better than market expectations of an increase to 4.2 percent, but inflation nevertheless remains elevated, extending a cost-of-living crisis for millions of people in Britain. Hunt added that bringing down elevated inflation remained the government's "top" goal. "High inflation is the single biggest barrier to growth which is why halving it has been our top priority," he said. - Sunak pledge 'in tatters' - But Labour slammed the government's stewardship of the economy, adding that Sunak's vow to deliver growth was in "tatters". "The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off," said Labour finance spokeswoman Rachel Reeves. "This is Rishi Sunak's recession and the news will be deeply worrying for families and business across Britain." Also read: Brexit costs UK economy $178 bn The BoE's main interest rate sits at a 16-year high of 5.25 percent, as it seeks to bring inflation back to its 2.0-percent target. However, rising interest rates also ramp up loan costs for individuals and businesses, further worsening the nation's cost-of-living crunch. Yet annual UK inflation has tumbled since striking a 41-year peak of 11.1 percent in October 2022. Global inflation soared as the invasion of Ukraine by major oil and gas producer Russia two years ago sent energy prices rocketing. In response, the world's major central banks helped to cool inflation by hiking borrowing costs.

UK economy entered recession ahead of election

The UK is grappling with a unique crisis termed 'Dogflation,' where soaring inflation rates are forcing pet owners to surrender their dogs. With a staggering 45,000 requests to surrender dogs last year, Dogs Trust, a leading dog rehoming charity, is facing an overwhelming situation. Pet care costs have skyrocketed to 9%, significantly outpacing the general inflation rate of 4%.

Gravitas: The 'Dogflation' crisis in the UK: Economic strain forces tough choices for pet owners

In a bold move to reignite the UK's sluggish economy, Finance Minister Jeremy Hunt has announced sweeping changes. Social security contributions are set to plummet, with major cuts to national insurance rates for both employees and the self-employed.

British Finance Minister unveils bold economic stimulus plan | World Business Watch

Retail sales have experienced an unexpected dip, marking the lowest level since the 2021 Covid-19 lockdowns. This downturn echoes a broader narrative, suggesting a shared challenge faced by economies worldwide.

UK retail sales plunge 0.3% amid economic challenges | World Business Watch

New research reveals that the UK millennials are still grappling with the enduring economic from the 2008 financial crisis born in the late 1980s.

UK millennials lag behind in home ownership amid soaring costs | World Business Watch

uk-economy

Uk Economy, News on Uk Economy, stories on Uk Economy, articles on Uk Economy, Uk Economy stories at Wion, Uk Economy news, Uk Economy latest news

uk economy