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Today’s agenda: US backs huge lithium mine; CIA and Mossad chiefs to meet; Dutch government averts collapse; campaigning in swing states; and the “dignity” of Italian tomatoes
Good morning. Consumer confidence in Britain has fallen to its lowest this year, according to GfK’s index, while a separate survey by S&P Global shows business confidence has also slipped to an 11-month low. Here’s what we know.
Why is the mood down? Businesses have been affected by “gloomy government rhetoric and uncertainty ahead of the Budget”, said one economist. Chancellor Rachel Reeves is expected to largely rely on tax increases to close what the government says is a funding gap of about £40bn during her speech next week. Britons are “holding their breath” to see what Reeves has planned, said another expert. Despite falls in inflation and mortgage rates, recent official data shows household consumption has been weak, indicating anxious consumers are prioritising saving over spending.
What to expect in the Budget: Reeves has pledged not to increase rates of income tax, national insurance or VAT, but is expected to prolong a freeze on personal tax thresholds beyond 2028 in a “stealth” tax move that could raise £7bn a year. She has also not ruled out increasing employers’ national insurance contributions. In an op-ed for the Financial Times this week, the chancellor also confirmed she would change the UK’s fiscal rules in the Budget as she seeks to fund about £20bn a year of extra investment with increased borrowing.
Here’s more on the economic situation ahead of the Labour government’s first Budget and more analysis below:
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‘Working people’: Anyone who owns shares and rental property is not a “working person”, Sir Keir Starmer has said, as he comes under pressure to define the term ahead of the Budget.
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Freedom of unpopularity: The chancellor and prime minister need to do away with their excessive caution of opposition, writes Robert Shrimsley.
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An unfair Budget hole: Politicians have shied away from fixing a council tax regime that is decades out of date, writes Soumaya Keynes.
Think you can do a better job than Reeves? Step into the chancellor’s shoes in the FT’s Budget Game — and let me know how you fare at [email protected]. Here’s what else I’m keeping tabs on today and over the weekend:
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Economic data: France publishes consumer confidence data today, while Ifo has its business climate index for Germany and the University of Michigan releases its consumer survey for the US.
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Israel-Hamas war: CIA chief Bill Burns and his Mossad counterpart David Barnea renew talks over a potential Gaza peace deal in Doha on Sunday.
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Elections: Georgia holds parliamentary polls tomorrow that could decide whether it tilts towards Russia or the west. Bulgaria, Japan, Lithuania, Uruguay and Uzbekistan also have elections on Sunday.
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Results: Colgate-Palmolive, Electrolux, Mercedes-Benz and NatWest are among those reporting today.
Five more top stories
1. The US has approved a massive new lithium mine as part of its strategy to break China’s dominance over the supply chains of critical minerals. The project by Australia’s Ioneer is the first such mine approved by the Biden administration, which has also offered a $700mn loan. Read the full story.
2. Vladimir Putin appeared to confirm yesterday that North Korean soldiers had been sent to fight in Russia as Ukrainian intelligence officials said troops had arrived in the Kursk region. Their presence has been an open secret since South Korea’s intelligence service released footage of North Korean troops training in Russia’s far east. More details on the Russian president’s remarks.
3. The Dutch government has averted collapse over migration policy after Geert Wilders’ Freedom party scrapped a plan to declare a migration crisis, which would have allowed the adoption of further measures without parliamentary consent. Here’s why the far-right leader backed down.
4. One of Australia’s largest pension funds plans to invest up to £1bn on central London offices alongside Delancey, the property group founded by Jamie Ritblat. The move marks a vote of confidence in a sector hit by high interest rates and questions over post-pandemic demand.
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More City news: Reports of bullying and harassment across the UK’s finance sector have risen by more than two-thirds in the past three years, the City regulator has found.
5. The European economy is set to fall further behind the US’s by the end of the decade, the IMF warned yesterday. The fund estimated Europe’s annual GDP growth rate for the 10 years until 2029 would fall to just 1.45 per cent, while the US’s is estimated at 2.29 per cent for the same period. Here’s why.
How well did you keep up with the news this week? Take our quiz.
News in-depth
The US election will come down to seven battleground states, and voters who live in them are being inundated with some of the most sophisticated and targeted advertising in political history. As Kamala Harris and Donald Trump try to win over undecided voters in a tight race, political ads in the swing states — from billboards to text messages — are everywhere, all the time.
We’re also reading . . .
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‘Bespoke’ banking: Ultra-wealthy clients who can pay for customised care in investments, tax and family governance may not get everything they need.
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Italian tomatoes: A tomato sauce magnate tells the FT that cheap imports from China’s Xinjiang region have damaged the “dignity” of Italy’s staple red fruit.
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Peak population: Projections have repeatedly underestimated the pace and duration of falls in birth rates, writes John Burn-Murdoch, and an overhaul in the models is needed.
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Israel’s dead fathers: Since last October, families of fallen Israeli soldiers have been offered postmortem sperm retrieval. FT Magazine explores the process — and its implications.
Chart of the day
Large investment funds run by groups such as Fidelity and T Rowe Price are being forced to offload shares to avoid getting into trouble with US tax authorities, as this year’s lopsided stock market rally has pushed them up against strict limits requiring them to maintain diversified portfolios.
Take a break from the news
Wondering what to do this weekend? Check out the FT’s six films to watch, including Donald Trump’s origin story and The Room Next Door, with Tilda Swinton and Julianne Moore as old friends confronting looming mortality.
