Skip to content
Search

Latest Stories

UK Austerity Ending, As Long As Brexit Deal Gets Done: Finance Minister

UK finance minister Philip Hammond held out the prospect of an end to Britain's long spending squeeze provided the government secures a Brexit deal with the EU, putting pressure on the divided conservative party to back prime minister Theresa May.

Delivering an annual budget speech on Monday (29) that sought to change the tone about tax and spending a decade after the financial crisis, Hammond announced tax cuts for households and the easing of welfare curbs for poorer working families.


He also took aim at big tech firms such as Google, Facebook and Amazon with a new sales levy.

In his last tax and spending plan before Britain leaves the European Union in five months' time, Hammond tried to help May overcome resistance in her party about how close Britain should stay after Brexit to the bloc that buys nearly half its exports.

"When our EU negotiations deliver a deal, as I am confident they will, I expect that the 'Deal Dividend' will allow us to provide further funding," Hammond told parliament.

"The hard work of the British people is paying off. Austerity is coming to an end."

Britain's economy has slowed since the 2016 Brexit vote, but not as much as many economists had feared.

Despite surprisingly strong tax receipts, as well as a modest upgrade to the economy's growth rate, Hammond announced only a relatively small fall in Britain's borrowing needs between now and the mid-2020s.

"The budget spends the fiscal windfall rather than saving it," the Office for Budget Responsibility, whose forecasts underpin Hammond's plan, said.

Credit agency Moody's, which stripped Britain of its AAA rating in 2013, said the new budget plan did not change its view that public debt would remain high for a long time, a reminder of the constraints facing Hammond.

But he stressed the upside of getting a deal with Brussels, saying it would dispel uncertainty weighing on businesses and allow him to spend money he is holding back as a reserve in case of a no-deal shock.

May's problems in getting the Conservatives behind her Brexit strategy have raised concerns that Britain could leave the EU without a transition deal.

Help For Retailers, Tax For Big Tech Firms

Hammond announced a new tax on the revenues of large tech firms from 2020 which would eventually raise £400 million ($510m) a year.

He also confirmed increased spending on defence and roads, measures to help small retailers struggling to cope with online competition, and a plan to put more money behind welfare reforms criticised by the opposition.

On income tax, Hammond brought forward by a year a higher threshold at which workers start to pay tax and he raised the level at which a higher rate kicks in.

Hammond reiterated that the biggest increase in spending in his budget was announced four months ago when May said more money would go to the health service.

The budget deficit was set to fall to 1.2 per cent of gross domestic product in the current financial year, down from a forecast in March of 1.8 per cent, he told parliament - a bigger drop than bond dealers polled by Reuters had expected.

In total, borrowing between now and the 2022/23 financial year was forecast to be £18.5 billion lower than in March forecasts by the Office for Budget Responsibility. More than half the improvement was due to come in the current financial year, reflecting Hammond's future ramped-up spending plans.

Hammond and his predecessor George Osborne had made fixing the public finances their priority, a strategy that has helped bring down the budget deficit from almost 10 per cent of GDP in 2010, but which has increasingly angered voters.

But Hammond faces a struggle to meet his target of wiping out the deficit altogether by the mid-2020s if he does not raise a range of taxes, economists have said.

By the 2023-24 tax year, the OBR said the public finances would remain in the red with a deficit of 0.8 per cent of GDP. ($1 = £0.7815).

Reuters

More For You

Jio Platforms

Jio Platforms includes India’s largest telecom operator, Reliance Jio Infocomm, with more than 500 million users. (Photo: Reuters)

Reuters

Jio IPO planned for mid-2026, AI unit announced with Meta and Google

RELIANCE Industries plans to take its telecom and digital arm, Jio Platforms, public by mid-2026, chairman Mukesh Ambani said on Friday. The announcement sets a new timeline for the long-awaited IPO of a business analysts value at over $100 billion.

At its annual general meeting (AGM), Reliance also announced the launch of an artificial intelligence unit in partnership with Google and Meta.

Keep ReadingShow less
Asda tech overhaul

Asda sales fell 0.2 per cent in the three months to June 30, 2025 (AFP via Getty Images)

AFP via Getty Images

Asda boss hails tech overhaul as key to revival despite sales slump

THE chairman of Asda has admitted the supermarket chain still faces challenges after sales slipped again over the summer, but said the completion of a major IT overhaul was crucial for its recovery.

Allan Leighton told the Times that the long-delayed technology project, called Project Future, had finally been finished after years of setbacks and costs exceeding £1 billion. The work involved separating more than 2,500 systems inherited from former owner Walmart, following Asda’s 2021 takeover by TDR Capital.

Keep ReadingShow less
JLR-Getty

A logo is pictured outside a Jaguar Land Rover new car show room in Tonbridge, south east England. (Photo: Getty Images)

Getty Images

UK car exports to US rebound after trade deal

UK VEHICLE exports to the United States rose in July after a new trade deal between London and Washington reduced tariffs, industry data showed on Thursday.

According to the Society of Motor Manufacturers and Traders (SMMT), exports increased 6.8 per cent in July to nearly 10,000 units, following three consecutive months of decline.

Keep ReadingShow less
Relatives of jailed Briton appeal to UK minister in AgustaWestland row

Christian Michel

Relatives of jailed Briton appeal to UK minister in AgustaWestland row

THE family of Christian Michel, the British businessman accused of acting as a middleman in the AgustaWestland VVIP helicopter deal, has appealed to the UK government to push for his release from Delhi’s Tihar Jail.

Michel’s relatives met Foreign Office minister Catherine West in London on Tuesday (26). The Foreign, Commonwealth and Development Office (FCDO) said the minister listened to their concerns and updated them on ongoing steps being taken.

Keep ReadingShow less
Blackburn loses Issa empire as brothers move EG Group to US

Zuber and Mohsin Issa (Photo: LDRS)

Blackburn loses Issa empire as brothers move EG Group to US

ASIAN entrepreneurs Mohsin and Zuber Issa are moving the headquarters of their global forecourt company, EG Group, from Blackburn to the US in preparation for a major stock market listing in New York.

The firm confirmed that its main office will relocate to Charlotte, North Carolina, while a new base in Bolton, Greater Manchester, will handle its remaining UK operations, the Telegraph reported. The change brings an end to almost 25 years of the company being run from Blackburn.

Keep ReadingShow less