1+ day, 15+ hour ago (548+ words) Clarification creates prospect of two-tier system for retirees solely on new state pension and those on private schemes People who rely only on their state pension for their income will not have to pay tax on it, the chancellor, Rachel Reeves, has said, creating the prospect of a two-tier system for those in retirement. The new state pension is set to rise to "241.30 a week next April, putting the annual income for someone receiving the standard payment at "12,547 " just below the personal tax allowance of "12,570 a year. The freezing of tax thresholds means that if the state pension rises by just 2.5%, from April 2027 it will fall above the threshold and someone receiving it will face paying tax on "292 of their payments " a bill of "58. Wednesday's budget document included a commitment to "ease the administrative burden for pensioners whose sole income…...

3+ day, 9+ hour ago (1025+ words) By the time the chancellor reached the dispatch box, the OBR had accidentally published its verdict in full online At a glance: the key points from the budget Shortly before midday on Wednesday, a series of headlines about Rachel Reeves's budget began appearing on the Reuters newswire, sending instant ripples though financial markets. The details were jaw-dropping: they appeared to spell out the key policies of the chancellor's budget more than 40 minutes before she was due to deliver them to a crowded Commons chamber. "UK OBR ECONOMIC AND FISCAL OUTLOOK: BUDGET TAX RISES RAISE 26.1 BLN STG BY 2029-30," read an alert published at 11.41am. In the chaotic moments that followed across newsrooms and trading floors " as well as throughout Westminster " the Office for Budget Responsibility (OBR) appeared unaware that it had published its highly sensitive analysis of Reeves's tax and spending plans…...

2+ week, 3+ day ago (723+ words) Stronger finances require a stronger economy, but budget tax rises and spending cuts could squeeze activity further Rachel Reeves's autumn budget is not simple: Britain's economy is misfiring and things need turning around fast. Yet a fiscal consolidation on the scale the chancellor is expected to require could push in exactly the opposite direction. The latest figures from the economy are hardly encouraging. Growth slowed from 0.3% in the second quarter to just 0.1% in the third, driven down in part by the cyber-attack on Jaguar Land Rover. It is a potential doom loop scenario. Stronger public finances require a stronger economy. Yet large tax rises and spending cuts on 26 November could further squeeze activity amid an already weak growth outlook. In the City, this has bond market investors worried. Yet so too does a budget that would not fully cover an…...

1+ week, 6+ day ago (866+ words) From mobiles to insurance and subscriptions, firms are able to exploit the fact they know more than customers Ever felt swizzed by the small print in your mobile contract, bamboozled by a plethora of insurance products or locked into a subscription you signed up for by mistake? Then you are far from alone: a paper on the UK's productivity predicament suggests the way the markets for some key services work is not only a monumental pain for consumers but bad for the economy, too. Rachel Reeves has promised to tackle the cost of living in her 26 November budget " alongside bringing in tax rises. Briefing in advance has suggested she and her colleagues are focused on cost-cutting levers they can easily pull from Whitehall: removing VAT on energy bills, for example. However, in their paper "getting Britain out of the hole,…...

3+ day, 14+ hour ago (1005+ words) Damaging events could knock finances off course, says Treasury's independent forecaster as it downgrades growth outlook Rachel Reeves says budget will cut living costs after shock OBR leak The Treasury's independent forecaster has warned that Rachel Reeves's tax-raising budget will still leave the public finances in a "vulnerable" position despite her more than doubling the UK's financial buffer. The Office for Budget Responsibility (OBR) said the potential for damaging events " such as a global stock market crash or future pandemic " to knock the government's finances off course remained high, even while the chancellor increased her headroom from "9.9bn to "22bn. After a wide-ranging review of the UK's economic health stretching back to the 2008 financial crash, the OBR also said the economy would grow at a slower rate over the next five years than previously estimated. The OBR said the economy would grow…...

2+ day, 19+ hour ago (661+ words) Move will have greater impact on living standards of taxpayers in bottom half of income scale, thinktanks say Rachel Reeves will punish poorer households more than the better off through the freezing of income tax thresholds announced in Wednesday's budget, two major thinktanks have said. The Resolution Foundation said the freeze on income tax thresholds for a further three years to 2031 would harm the living standards of taxpayers in the bottom half of the income scale. More than 1.7 million workers will be dragged into either paying tax for the first time or pushed into a higher band by an additional three-year freeze on income tax and national insurance thresholds. Reeves conceded it would hit "working people" but denied it constituted breaking the Labour manifesto and said it would bring in "12.4bn by 2030-31. Ruth Curtice, the chief executive of the Resolution Foundation,…...

2+ day, 22+ hour ago (666+ words) Rachel Reeves targets UK's wealthiest in "26bn tax-raising budget We also have budget analysis from research institute NIESR (the National Institute of Economic and Social Research) to digest. They identify that freezing the income tax thresholds until the end of the decade will fall on poorer workers the most (a point also made by Resolution Foundation this morning). [Reminder: higher-rate threshold and additional-rate threshold are to be frozen at "12,570, "50,270 and "125,140, respectively until 2030]. NIESR also critises the "lack of economic vision' in the budget: Today's Budget locks in a high-tax, high-debt steady state in a world of low productivity growth and higher interest rates. Even the historically large tax share of GDP now planned is only just enough to stabilise " not reduce " a debt ratio stuck around 100 per cent of GDP for the foreseeable future. Distributionally, the extension of the income tax…...

6+ day, 42+ min ago (571+ words) Peter Kyle defends government as Reeves faces criticism about pre-budget briefings ahead of Wednesday announcement Economists are saying that that this lack of certainty has been bad for growth. This is what Andy Haldane, the former chief economist at the Bank of England, told the BBC yesterday. We've had month upon month of speculation " fiscal fandango, basically. And that's been costly for the economy. It's caused paralysis among business and consumers. It's the single biggest reason why growth has flatlined, it's been grounded in the second half of the year. In an interview this morning on the Today programme, Mohamed El-Erian, former chief economic adviser to Allianz, the German finance company, and he said the economic data suggested Haldane was right. He explained: There are a number of data points that suggest that the prolonged speculation has flatlined growth. You…...

3+ day, 13+ hour ago (731+ words) After a tumultuous run-up to a make-or-break moment for the government, has the chancellor struck the right balance? Millionaire investor, lawyer and a member of Patriotic Millionaires First and foremost, it is wrong to ask working people to contribute more through freezing income tax thresholds, while the wealthiest in society are broadly left untouched. In a country with such extraordinary levels of wealth at the very top, the government should be looking to those most able to contribute more, not turning to those who are already doing their part. If the government chooses to reverse course on today's decisions, there is still time to create a tax system that works for everyone. What our country needs is determination, will and clarity of purpose from our political leaders to deliver an economy that works for all of us, not just people…...

3+ day, 2+ hour ago (391+ words) The left-leaning Resolution Foundation says freezing income tax thresholds less progressive than raising income tax rates by 1p Ask the Guardian your budget questions Richard Hughes, chair of the Office for Budget Responsibility, has said that "an external person" may have been involved in the accidental release of its budget report yesterday. In an interview on the Today programme, he said that he had written to the chancellor apologising for the fact that the document became public about 40 minutes before she announced the budget " allowing people to learn all the details in advance. He also said that that Prof Ciaran Martin, the former head of the UK's National Cyber Security Centre, will be involved in the OBR's investigation into what happened. The documents weren't published on our webpage itself. It appears there was a link that someone was able to access…...