‘Weak’ living standards outlook for middle income earners, thinktank warns
The outlook for living standards for middle-income earners is “weak” beyond this financial year, according to an annual report by a thinktank released ahead of the Labour government’s first budget.
The Resolution Foundation warned that a slowdown in pay growth across the board would start to bite by the time of Sir Keir Starmer’s first anniversary in office, arguing that the pace of salary increases would soon be overtaken by rising housing costs.
Its findings, released just weeks after Labour’s landslide election win, were based on forecasts by both the Bank of England and Office for Budget Responsibility.
It said that the impact would be felt most by the worse off – especially if the Treasury decides not to U-turn on planned Conservative cuts to benefits – as a greater proportion of their incomes is spent on things like rents and energy.
The foundation said that 400,000 more children risked coming under the poverty line over the parliament without intervention as the cost of living crisis pivots, in part due to interest rates remaining high to combat inflation.
A reason why rates are not coming down at a faster pace is due to wage growth being seen as an inflationary risk.
The Bank wants salary increases to ease while, ideally, the government does not because it exposes more people to financial difficulty.
It marks a worrisome challenge for the Labour administration because it comes at a time when it claims to have inherited a £22bn “black hole” in the public finances from the Conservatives.
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Labour MP wants winter payment rethink
The government blamed this void for its early decision to scrap winter fuel payments for the 10 million pensioners not in receipt of benefits.
Both Sir Keir and his chancellor Rachel Reeves have warned of further hard choices at the budget, due on 30 October, with the prime minister admitting earlier this week that tougher times lay ahead.
He stated those with the broadest shoulders would have to bear the brunt of the looming tax rises. The Tories have responded by arguing the budget will be a Halloween horror for the middle classes.
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PM: Budget will be ‘painful’
Labour has ruled out hikes to VAT, national insurance and Income tax.
The foundation’s Living Standards Outlook showed that incomes are expected to grow by 3% in 2024/25, but annual median income growth for non-pensioner households is forecast to tumble to 0.4% between 2024/25 and 2029/30.
This would leave annual average income growth over the whole parliament at 0.8% – or £1,400 per household.
The economists’ report suggested boosting real annual wage growth by one percentage point from 2025/26 onwards, to raise typical income growth for non-pensioner households to 8% by the end of the parliament – up from 5%.
It also said that scrapping the two-child limit on universal credit support and benefit cap, and raising the local housing allowance from 2025, could “lift 600,000 children out of poverty overnight” at a cost of £3.5bn.
The government has defied pressure from its own MPs for the two-child benefit cap to be dropped.
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Chancellor quizzed over tax rises
A third proposal was to uprate working-age benefits in line with wages rather than prices from 2025.
The study said that would cost around £9bn a year by the end of the parliament but “would stabilise child poverty rates at a lower level than in the previous parliament”.
Economist Alex Clegg said: “Britain is currently experiencing a mini living standards recovery as inflation falls but wage rises remain high.
“But this isn’t set to last, with the majority of income growth projected over the parliament coming in this year alone.”
He added: “While the outlook for middle-income households is weak, it’s even worse for poor households, with 400,000 children at risk of falling below the poverty line.
“This troubling outlook highlights the need for the new government to beat the forecasts that they have inherited.”
European Union regulators are reportedly mulling a $1 billion fine against Elon Musk’s X, taking into account revenue from his other ventures, including Tesla and SpaceX, according to The New York Times.
EU regulators allege that X has violated the Digital Services Act and will use a section of the act to calculate a fine based on revenue that includes other companies Musk controls, according to an April 3 report by the newspaper, which cited four people with knowledge of the plan.
Under the Digital Services Act, which came into law in October 2022 to police social media companies and “prevent illegal and harmful activities online,” companies can be fined up to 6% of global revenue for violations.
A spokesman for the European Commission, the bloc’s executive branch, declined to comment on this case to The New York Times but did say it would “continue to enforce our laws fairly and without discrimination toward all companies operating in the EU.”
In a statement, X’s Global Government Affairs team said that if the reports about the EU’s plans are accurate, it “represents an unprecedented act of political censorship and an attack on free speech.”
“X has gone above and beyond to comply with the EU’s Digital Services Act, and we will use every option at our disposal to defend our business, keep our users safe, and protect freedom of speech in Europe,” X’s global government affairs team said.
Source: Global Government Affairs
Along with the fine, the EU regulators could reportedly demand product changes at X, with the full scope of any penalties to be announced in the coming months.
Still, a settlement could be reached if the social media platform agrees to changes that satisfy regulators, according to the Times.
One of the officials who spoke to the Times also said that X is facing a second investigation alleging the platform’s approach to policing user-generated content has made it a hub of illegal hate speech and disinformation, which could result in more penalties.
X EU investigation ongoing since 2023
The EU investigation began in 2023. A preliminary ruling in July 2024 found X had violated the Digital Services Act by refusing to provide data to outside researchers, provide adequate transparency about advertisers, or verify the authenticity of users who have a verified account.
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X responded to the ruling with hundreds of points of dispute, and Musk said at the time he was offered a deal, alleging that EU regulators told him if he secretly suppressed certain content, X would escape fines.
Thierry Breton, the former EU commissioner for internal market, said in a July 12 X post in 2024 that there was no secret deal and that X’s team had asked for the “Commission to explain the process for settlement and to clarify our concerns,” and its response was in line with “established regulatory procedures.”
Musk replied he was looking “forward to a very public battle in court so that the people of Europe can know the truth.”
Source: Thierry Breton
Magazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set
US crypto exchange Coinbase has filed with the US Commodity Futures Trading Commission (CFTC) to launch futures contracts for Ripple’s XRP token.
“We’re excited to announce that Coinbase Derivatives has filed with the CFTC to self-certify XRP futures — bringing a regulated, capital-efficient way to gain exposure to one of the most liquid digital assets,” stated Coinbase Institutional on April 3.
The firm added that it anticipates the contract going live on April 21.
According to the certification filing, the XRP (XRP) futures contract will be a monthly cash-settled and margined contract trading under the symbol XRL.
The contract tracks XRP’s price and is settled in US dollars. Each contract represents 10,000 XRP, currently worth about $20,000 at $2 per token.
Contracts can be traded for the current month and two months ahead, and trading will be paused as a safety measure if spot XRP prices move more than 10% in an hour.
“The exchange has spoken with FCMs (Futures Commission Merchants) and market participants who support the decision to launch a XRP contract,” the firm stated.
Coinbase is not the first to launch XRP futures in the United States. In March, Chicago-based crypto exchange Bitnomial announced the launch of the “first-ever CFTC-regulated XRP futures in the US.”
XRP futures trading is available on many of the world’s leading centralized crypto exchanges, such as Binance, OKX, Bybit and BitMEX.
Funding rates remain negative
In late March, Cointelegraph reported that XRP derivatives’ funding rates had flipped negative as investor sentiment turned bearish.
Related: XRP funding rate flips negative — Will smart traders flip long or short?
Funding rates are periodic payments between traders in perpetual futures markets that help keep the futures price aligned with the spot price. Positive funding rates mean that long traders (buyers) pay short traders, while negative funding rates mean short traders (sellers) pay long traders.
When funding rates go negative, it means short traders are willing to pay a premium to maintain their positions, indicating strong conviction from bearish derivatives traders.
XRP funding rates remained negative on major derivatives exchanges as of April 4, according to CoinGlass.
XRP OI-weighted funding rates. Source: CoinGlass
Magazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set
Former Binance CEO Changpeng “CZ” Zhao will begin advising the Kyrgyz Republic on blockchain and crypto-related regulation and tech after signing a memorandum of understanding with the country’s foreign investment agency.
“I officially and unofficially advise a few governments on their crypto regulatory frameworks and blockchain solutions for gov efficiency, expanding blockchain to more than trading,” the crypto entrepreneur said in an April 3 X post, adding that he finds this work “extremely meaningful.”
His comments came in response to an earlier X post from Kyrgyzstan President Sadyr Zhaparov announcing that Kyrgyzstan’s National Investment Agency (NIA) had signed a memorandum with CZ to provide technical expertise and consulting services for the Central Asian country.
The NIA is responsible for promoting foreign investments and assisting international companies in identifying business opportunities within the country.
Source: Changpeng Zhao
“This cooperation marks an important step towards strengthening technological infrastructure, implementing innovative solutions, and preparing highly qualified specialists in blockchain technologies, virtual asset management, and cybersecurity,” Zhaparov said.
The Kyrgyzstan president added: “such initiatives are crucial for the sustainable growth of the economy and the security of virtual assets, ultimately generating new opportunities for businesses and society as a whole.”
Kyrgyzstan, which officially changed its name from the Republic of Kyrgyzstan to the Kyrgyz Republic in 1993, is a mountainous, land-locked country.
It is considered well-suited for crypto mining operations due to its abundant renewable energy resources, much of which is underutilized.
Over 30% of Kyrgyzstan’s total energy supply comes from hydroelectric power plants, but only 10% of the country’s potential hydropower has been developed, according to a report by the International Energy Agency.
CZ has met with several other state officials in Asia
Malaysia also recently tapped CZ for guidance on crypto-related matters, with Prime Minister Anwar Ibrahim meeting him personally in January.
CZ has also met with officials in the UAE and Bitcoin-stacking country Bhutan — however, it isn’t clear what those meetings entailed.
Related: Is Bitcoin’s future in circular economies or national reserves?
CZ’s latest pursuits come a little over six months after he was released from a four-month prison sentence in the US for violating several anti-money laundering laws.
Since being released, CZ has made investments in blockchain tech, artificial intelligence and biotechnology companies.
CZ also recently donated 1,000 BNB (BNB) — worth almost $600,000 — to support earthquake relief efforts in Thailand and Myanmar after the natural disaster in late April.
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