Reeves told she will have to raise further £9bn for public services
The Guardian|November 01, 2024
Rachel Reeves has been warned that an extra £9bn of tax rises may be required to avoid a fresh austerity drive in some public services as her record tax-raising budget sent tremors through the financial markets.
Richard Partington Jessica Elgot

Government borrowing costs rose sharply in the City yesterday as traders turned on Reeves's tax and spending measures. Their reaction threatens to undermine the chancellor's claim that her budget would restore economic stability to Britain.

On a day of wider losses in global markets, the negative reaction came despite the International Monetary Fund lending its backing to the first Labour budget in 14 years.

The yield - in effect the interest rate - on benchmark 10-year government bonds jumped to the highest level this year, rising by more than 0.15 percentage points to above 4.5% yesterday, before falling back slightly by the evening. The higher the yield, the more the government has to pay to borrow money.

City traders said the higher short-term borrowing levels set out in the budget threatened to derail the Bank of England from pushing ahead with a round of interest rate cuts. The pound also fell against the US dollar to its lowest for two months.

Some analysts sought to draw comparisons with Liz Truss's mini-budget, when financial markets were thrown into a tailspin, though they noted that the gyrations in the City were far less substantial this time. Others said there were dangers in holding the budget so near to a close-fought US election, amid a febrile backdrop for the historic tax and spending package.

Jonas Goltermann, deputy chief markets economist at the consultancy Capital Economics, said the fallout from Reeves's budget was "still a very long way from the 2022 'mini-budget' debacle", but the similarities could trigger alarm bells in Westminster. "A meltdown of similar proportions remains unlikely, but plainly investors are nervous about the fiscal outlook in the UK (and elsewhere)," he said.

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Rise lays bare the risks ahead for Labour
The Guardian

Rise lays bare the risks ahead for Labour

Any lingering hope that the Bank of England might deliver a pre-Christmas interest rate cut next month evaporated yesterday after official data showed inflation jumped to 2.3% in October.

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1 min  |
November 21, 2024
'My way as a manager was taught by Bobby Robson'
The Guardian

'My way as a manager was taught by Bobby Robson'

George Burley is enjoying Ipswich's revival having reached great heights there more than 20 years ago

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5 mins  |
November 21, 2024
Tuchel takes goalkeeping coach Hilario from Chelsea
The Guardian

Tuchel takes goalkeeping coach Hilario from Chelsea

Thomas Tuchel's backroom staff has been bolstered by the addition of Henrique Hilario, who is ending his 18-year association with Chelsea to become England JS new goalkeeping coach.

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1 min  |
November 21, 2024
Kosovo to take Uefa to Cas after Romania awarded points
The Guardian

Kosovo to take Uefa to Cas after Romania awarded points

Kosovo are preparing an appeal to the court of arbitration for sport (Cas) after Uefa handed them a 3-O defeat for walking off the field during Friday's Nations League tie against Romania in Bucharest, which was eventually abandoned when they elected not to return.

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1 min  |
November 21, 2024
Staying power No relegation break clause in Guardiola's new City contract
The Guardian

Staying power No relegation break clause in Guardiola's new City contract

Pep Guardiola's new one-year contract with Manchester City does not contain a break clause should the club be relegated from the Premier League if found guilty of financial wrongdoing by an independent commission.

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1 min  |
November 21, 2024
Lopetegui's future to be decided in next two games
The Guardian

Lopetegui's future to be decided in next two games

Julen Lopetegui is facing two make-or-break games at West Ham, who have used the international break to explore potential replacements.

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1 min  |
November 21, 2024
City's empire faces a set of challenges that will test Guardiola's genius
The Guardian

City's empire faces a set of challenges that will test Guardiola's genius

After signing deal, manager is left with an ageing squad as threat of Premier League punishment looms large

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3 mins  |
November 21, 2024
The Guardian

Curry changing his technique to avoid more concussions

England are making changes to Tom Curry's all-action technique to ensure his safety after he returned to the fold for Sunday's clash with Japan following his latest concussion.

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2 mins  |
November 21, 2024
Sacking me won't help Wales, insists Gatland in plea for patience
The Guardian

Sacking me won't help Wales, insists Gatland in plea for patience

The last rites, if that is what they are, are going to drag on a while longer yet. Warren Gatland has reiterated that he would resign as head coach if it were \"in the best interests of Welsh rugby\", while also making it Very clear that in his opinion it is not.

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3 mins  |
November 21, 2024
Bronze takes 65 seconds to fire Chelsea into last eight
The Guardian

Bronze takes 65 seconds to fire Chelsea into last eight

Chelsea cruised into the knockout stages of the Champions League with two games to spare at Stamford Bridge.

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2 mins  |
November 21, 2024