Could higher borrowing give Rachel Reeves her optimistic vision?

Published

7 months ago

September 24, 2024

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Today saw a shift in rhetoric from Chancellor Rachel Reeves as she moved to promise the Labour conference a more optimistic vision for the country.

But quietly there also appears to have been a shift in approach, which could mean a markedly different landscape for public spending come the budget on 30 October, allowing far greater scope for Labour to borrow and spend.

Politics live: ‘More optimistic’ Budget could be in store

The easiest way to see the change is to compare the chancellor’s actions before and after the summer.

In July, when Ms Reeves created the £22bn “black hole”, she gave us a taste of how she intended to fill it.

Not only was there the means testing of the winter fuel allowance, but she did something the Treasury have been wanting for years – to cancel a whole load of investment projects, including road building with the A303 down to Cornwall, as well as delaying the hospital building programme.

This was as striking as it was confusing. Such projects would be the cornerstone of any government’s growth plan.

Yet in the eternal tension in Labour between fiscal discipline and growth, the former had won out seemingly at the expense of the latter.

And Treasury mandarins at the time were clear. The best way to fill an immediate £22bn black hole would always be to delay or can these investments – or capital projects.

Now fast forward to the Autumn and £16bn of the black hole remains to be filled on 30 October.

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There is no doubt that some tax rises, welfare cuts and spending curbs may be in the mix. But I am told that borrowing might also be used to plug this hole.

This is by no means certain – the government’s first fiscal rule could yet prevent this from happening.

But I am told they may reduce the amount of cuts or tax rises simply by putting it on the nation’s credit card once more.

This is just one of the ways that the government may allow itself to borrow more.

There is the well-trailed discussion about redefining debt in the second fiscal rule – a technical change that could free up £15bn or more.

There’s discussion about how to treat other assets like GB Energy on the balance sheet, which again could allow the government to borrow more within its rules.

The markets are unlikely to take fright. They have been convinced, it seems, by the vibe of Ms Reeves as an iron chancellor.

However, there is now a chance the optimistic vision she outlined today could come sooner than we think – thanks to higher borrowing.

Politics

Nigerian court postpones Binance tax evasion case to end of April: Report

Published

3 hours ago

April 8, 2025

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Nigerian court postpones Binance tax evasion case to end of April: Report

A Nigerian court has reportedly delayed the country’s tax evasion case against Binance until April 30 to give time for Nigeria’s tax authority to respond to a request from the crypto exchange.

Reuters reported on April 7 that a lawyer for Binance, Chukwuka Ikwuazom, asked a court the same day to invalidate an order allowing for court documents to be served to the company via email.

Binance doesn’t have an office in Nigeria and Ikwuazom claimed the Federal Inland Revenue Service (FIRS) didn’t get court permission to serve court documents to Binance outside the country.

“On the whole the order for the substituted service as granted by the court on February 11, 2025 on Binance who is … registered under the laws of Cayman Islands and resident in Cayman Islands is improper and should be set aside,” he said.

FIRS sued Binance in February, claiming the exchange owed $2 billion in back taxes and should be made to pay $79.5 billion for damages to the local economy as its its operations allegedly destabilized the country’s currency, the naira, which Binance denies.

It also reportedly alleged that Binance is liable to pay corporate income tax in Nigeria, as it has a “significant economic presence” there, with FIRS requesting a court order for the exchange to pay income taxes for 2022 and 2023, plus a 10% annual penalty on unpaid amounts along with a nearly a 27% interest rate on the unpaid taxes.

Nigeria’s legal history with Binance

In February 2024, Nigeria arrested and detained Binance executives Tigran Gambaryan and Nadeem Anjarwalla on tax fraud and money laundering charges. The country dropped the tax charges against both in June and the remaining charge against Gambaryan in October.

Anjarwalla managed to slip his guards and escape Nigerian custody to Kenya in March last year and is apparently still at large.

Gambaryan, a US citizen, returned home in October after reports suggested his health had deteriorated during his detainment with reported cases of pneumonia, malaria and a herniated spinal disc that may need surgery.

Binance stopped its naira currency deposits and withdrawals in March 2024, effectively leaving the Nigerian market.

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Politics

Sam and Starmer – what did PM actually mean?

Published

4 hours ago

April 8, 2025

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Sam and Starmer – what did PM actually mean?

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It’s the final episode before recess so Sky News’ Sam Coates and Politico’s Anne McElvoy wonder, given the turbulent times, who’ll be the first to call for Parliament to be recalled?

And talking of the Lib Dems, there’s some new polling which might put a spring into the step of Ed Davey – is his party’s position on Trump and trade doing them some favours?

Of course, there’s plenty of time to talk about the onslaught of US tariffs and implications for the UK – watch out for if the PM is asked about fiscal headroom when he appears before the Liaison Committee of senior MPs later.

Sam and Anne also ponder the PM’s response to Sam at a Q&A yesterday.

Politics

US to get its first XRP-based ETF, launching on NYSE Arca

Published

6 hours ago

April 8, 2025

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US to get its first XRP-based ETF, launching on NYSE Arca

Asset manager Teucrium Investment Advisors is set to launch the first XRP-based exchange-traded fund in the US markets, a leveraged XRP (ETF) on the NYSE Arca.

The Teucrium 2x Long Daily XRP ETF will seek to offer investors two times the daily return of the XRP (XRP) token with a 1.85% management fee and annual expense ratio, according to the company’s website. The XRP-based ETF will trade under the XXRP ticker beginning April 8.

“If you have a short-term high-conviction view on XRP prices, you may consider exploring the Teucrium 2x Long Daily XRP ETF,” the alternative asset manager said.

XXRP currently has $2 million worth of net assets.

Teucrium founder and CEO Sal Gilbertie told Bloomberg on April 7 that investors had shown strong interest in an XRP ETF and hinted that it may file to list more crypto ETFs in the future.

Gilbertie was also pleased that XXRP would launch during a market downturn driven largely by US President Donald Trump’s tariffs.

“What better time to launch a product than when prices are low?” Gilbertie told Bloomberg.

Likelihood of an approved spot XRP ETF still high: Analyst

Bloomberg ETF analyst Eric Balchunas said it was “very odd” to see a new asset’s first ETF come in leveraged form — however, he added that the odds of a spot XRP ETF being approved remain “pretty high.”

Several spot XRP ETF applications from the likes of Grayscale, Bitwise, Franklin Templeton, Canary Capital and 21Shares are being reviewed by the Securities and Exchange Commission.

In February, Balchunas and fellow Bloomberg ETF analyst James Seyffart attributed 65% approval odds to a spot XRP ETF in 2025.

Predictions market Polymarket states there is currently a 75% chance that the SEC will approve a spot XRP ETF in 2025.

Up until recently, ETF issuers would have seen a different environment for filing for XRP ETFs as Ripple Labs — the creators of the XRP token — and the SEC battled out a four-year court battle over XRP’s security status.

That case came to a close last month.

Teucrium has amassed over $310 million worth of assets under management since it was founded in 2010.

It offers mostly agricultural commodities, such as ETFs tracking the likes of corn, soybeans, sugar and wheat.

Magazine: XRP win leaves Ripple and industry with no crypto legal precedent set