Could Rachel Reeves’s budget ‘jiggery-pokery’ scare investors?

Published

1 year ago

October 30, 2024

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Budgets are all about numbers.

In the coming 24 hours, we’ll be engulfed with all sorts of figures – about the state of the economy, about the size of the deficit, about the fiscal rules the new chancellor is planning to introduce in the coming months.

But in fact most budgets, this one included, can really be boiled down to the difference between two big numbers.

Politics live blog: Budget 2024 latest developments

Total government spending and total government receipts.

Right now the UK government is spending just over £1.2trn a year and bringing in just over £1.1trn in taxes and receipts.

In other words, this country is spending more than it generates in tax receipts.

So it has to borrow the difference.

That borrowing, also known as the deficit, is (as you’ve already probably worked out from the above numbers) around £100bn a year.

And politicians, including the chancellor, spend rather a lot of time fretting about the deficit.

Indeed, the main objective of the various different fiscal rules they’ve imposed on themselves in recent decades has been to narrow the gap between those two big numbers.

Broadly speaking, the easiest way to do this is to cut something few people notice in the short run – government investment.

When he came into office in 2010, George Osborne cut a lot of parts of public spending, but he absolutely slashed the amount the public sector spent on buildings, infrastructure and machinery – capital spending.

Having lifted the total briefly after the pandemic, Jeremy Hunt was planning a similar fall in investment in the coming years.

Rachel Reeves has said repeatedly ahead of the budget that she plans to invest far more in the coming years.

This is a noble goal, given investment tends to benefit future generations, however, it will not be cheap in the short run.

Indeed, keeping investment spending at current levels will cost roughly £30bn a year by the end of this decade.

So how does the chancellor square that with her fiscal rules?

Well, one part of the answer is that she’s planning to increase the revenues coming into the Exchequer, reportedly via higher national insurance charges for insurers.

But the other part of the answer is that she’s changing her fiscal rules as well.

Budget 2024: Rachel Reeves vs the fiscal rules

The long and the short of it is that Ms Reeves looks likely to choose a set of fiscal rules that ignore investment spending.

Both her updated debt rule and her current budget rule essentially omit capital spending – although they include debt interest costs, so she can’t just borrow willy-nilly.

That might sound like fiscal jiggery-pokery, and some in the market fret that investors will soon take fright as a result.

Indeed, some suggest they already are, and point to the fact the UK’s cost of government borrowing – as measured by the benchmark 10-year bond yield – has risen from under 4% to nearly 4.3% in the past month alone.

However, this is a slight misreading of this market, which is as affected by global economic factors and central bank action as much as by UK budgetary policy.

Indeed, compare the recent changes in the UK’s borrowing rates with those in Germany and the US and British government bond yields are close to where they usually trade in the run up to a budget.

And they are far, far below where they were in the run-up to Liz Truss’s mini-budget.

Even so, there are bound to be a few unexpected surprises and some relevant new data points in this fiscal event.

It is a budget after all.

UK

World Cup 2026 – who England, Scotland, Wales, Northern Ireland and the Republic of Ireland will play

Published

6 hours ago

December 6, 2025

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World Cup 2026 - who England, Scotland, Wales, Northern Ireland and the Republic of Ireland will play

Scotland and England now know who they will face in the group stage of the next summer’s world cup.

But the fates of Northern Ireland, the Republic of Ireland and Wales won’t be determined until they compete in pre-tournament play-off matches in March.

England are in Group L along with Croatia, Panama and Ghana. Their first match will be against Croatia, who beat them in the semi-finals of the 2018 World Cup in Russia.

Scotland’s first match will be against Haiti, in Group C.

Brazil and Morocco are the other Group C teams – both countries were also in the same opening group as Scotland in the 1998 World Cup in France.

Wales have yet to find out if they will qualify as they must face a play-off against Bosnia and Herzegovina in Cardiff, and then either Italy or Northern Ireland, if they are victorious.

If they can overcome these play-off opponents then they will secure their place in Group B along with Canada, Qatar and Switzerland. But Northern Ireland will also be vying and hoping to guarantee their spot in the same group if they can beat Italy and then either Wales or Bosnia and Herzegovina.

The Republic of Ireland also need to get through the play-offs first and are paired against the Czech Republic for their semi-final. Should Ireland win that match, they will need to beat either North Macedonia or Denmark to get to the finals where an opening group containing joint hosts Mexico, South Africa and South Korea awaits.

UK

Crafted for one man – this was a World Cup draw like no other

Published

6 hours ago

December 6, 2025

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Crafted for one man - this was a World Cup draw like no other

This was a World Cup draw like no other. Crafted less for the teams but for one man.

The choice of venue. The creation of a new trophy. The closing music act.

Donald Trump was lavished with the adulation he craves by FIFA President Gianni Infantino and feels others unfairly deny him.

Knowing how much being overlooked by the Nobel Committee hurt the US president, there was Mr Infantino with FIFA’s newly-created Peace Prize to hand over. And a medal for Mr Trump to wear.

“This is truly one of the great honours of my life,” he said. “And beyond awards, Gianni and I were discussing this. We saved millions and millions of lives.”

This was all on the stage in front of an audience who turned up to find out who they will be playing at the World Cup.

England handed an undaunting route past Croatia, Panama and Ghana. Scotland paired with newcomers Haiti before tricky reunions from their last men’s World Cup in 1998 against Brazil and Morocco.

But the show before the draw could even begin – presided over by Rio Ferdinand – took almost as long as a football match, at 87 minutes after the noon kick-off was delayed.

There was a walk of self-promotion to complete – “I guess they have to wait” – before taking his seat in the Kennedy Center. Or the Trump Kennedy Center as the president takes to calling the venue picked 1.5 miles from the White House.

“It was falling apart,” he said, delaying the walk into the auditorium. “And now it’s, it’s pretty much back.”

Mr Infantino could only watch on, beaming, at his friend.

“We had a dead country,” Mr Trump went on, “and now we have the hottest country anywhere in the world”.

There was the awkwardness of being reminded, before receiving the peace accolade, about threats to launch military strikes on Venezuela to stop the drugs trade.

“I did settle eight wars, and we have a ninth coming,” he swatted away the question. “Which nobody’s ever done before. But I want to really save lives. I don’t need prizes.”

But FIFA knew how much he wanted more gold for the collection with the prize.

More on this story:
What draw means for England, Scotland, Wales, Northern Ireland and Republic of Ireland

And for all the mockery and disdain targeted at FIFA, how many sports would relish having the US president spend several hours attending a procedural event determining the placing of teams in groups for a tournament?

How many would dish out the same flattery to secure direct lines to the leader of the nation staging their championship?

Many have benefited from Mr Trump’s stardust and swagger being attached to this spectacle.

Even Port Vale’s most famous fan – Robbie Williams – secured a walk-on role, exceeding his profile this side of the Pond.

And the Village People are reaping the rewards of becoming the unlikeliest of Trump hype acts.

The festivities ended with eyes fixed back up to the presidential seating and the YMCA dance being performed.

This was an afternoon that dispelled any pretence that FIFA keeps a distance from politics. It was unapologetically political. But few speak out in the FIFA world as the redistributed wealth keeps rolling back in their direction.

It would be easy to forget this isn’t entirely America’s World Cup. They’re sharing hosting with Canada and Mexico.

And eventually the spotlight was ceded to their leaders – very briefly – as Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney drew out their countries’ names.

But it did live up to FIFA’s mantra that football can unite the world.

The neighbours were brought together here on a snowy day in Washington. And tensions – often stoked by Mr Trump with Canada and Mexico – thawed in the name of football.

UK

Duchess of Sussex ‘reaches out’ to estranged father after reports of leg amputation

Published

6 hours ago

December 6, 2025

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Duchess of Sussex 'reaches out' to estranged father after reports of leg amputation

Meghan Markle has “reached out” to her estranged father after reports he had his leg amputated, her spokesperson has said.

Thomas Markle, 81, reportedly had his leg amputated following surgery in the Philippines, where he moved to this year.

Meghan has been estranged from her father since around the time of her wedding to Prince Harry in May 2018.

Mr Markle, a retired television lighting director and director of photography, made headlines across the globe after he was caught staging paparazzi photographs in the days ahead of the ceremony.

A spokesperson for the Duchess of Sussex said: “I can confirm she has reached out to her father.”

Meghan is said to have previously tried to reach out to him in the past.

Mr Markle has never met his grandchildren Prince Archie and Princess Lilibet.

At the start of this year, Mr Markle told of how he dreamed of bringing his “whole family together” and wished his daughter “no ill-will”.

Mr Markle revealed that he didn’t “like some of the things” Meghan had done but would “always love her”.

His interview with the Mail on Sunday came amid the duchess’ return to Instagram and the release of a trailer for her lifestyle show on Netflix.

Mr Markle said: “I’m not running away. I am going in search of a more positive life.

“Every day I see something about Meghan. This week it has been the new TV show.”

In his first interview after his daughter’s wedding, Mr Markle said he didn’t attend the big day because he was embarrassed about staging the photos.

“The truth is I couldn’t get over the fact that that had happened. All that stuff was working on me, I had a bit of a heart condition.

“This pushed me a little further to the part where I had heart palpitations. I had to drive at 2am to a hospital. They sent me to another little hospital and then they sent me to a bigger hospital and I had a heart attack.”

A day-and-a-half later he said he felt better and checked himself out against doctors’ wishes in a bid to make it to the wedding, but the heart palpitations returned when he got home, which at the time was in Mexico.

“At that time I started getting chest pains and I said I have to cancel because I didn’t take care of the heart problem before. I had a good friend take me back to a hospital across the border to the States where I was told that my condition was very bad and they had to operate, and I had heart surgery.”