Spring statement: Rachel Reeves can make decisions on spending cuts without too much fallout for now – but worse could be yet to come

Published

19 hours ago

March 25, 2025

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Rachel Reeves will keep her remarks short when she delivers the spring statement on Wednesday.

But the enormity of what she is saying will be lost on no one as the chancellor sets out the grim reality of the country’s finances.

Her economic update to the House of Commons will reveal a deteriorating economic outlook and rising borrowing costs, which has forced her to find spending cuts, which she’s left others to carry the can for (more on that in a bit).

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The independent Office of Budget Responsibility (OBR) is expected to forecast that growth for 2025 has halved from 2% to 1%.

That, combined with rising debt repayment costs on government borrowing, has left the chancellor with a black hole in the public finances against the forecasts published at the budget in October.

Back then, Reeves had a £9.9bn cushion against her “iron-clad” fiscal rule that day-to-day spending must be funded through tax receipts not debt by 2029-30.

But that surplus has been wiped out in the ensuing six months – now she finds herself about £4bn in the red, according to those familiar with the forecasts.

That’s really uncomfortable for a chancellor who just months ago executed the biggest tax and spend budget in a generation with the promise that she would get the economy growing again.

At the first progress check, she looks to be failing and has been forced into finding spending cuts to make up the shortfall after ruling out her other two options – further tax rises or more borrowing via a loosening of her self-imposed fiscal rules.

‘World has changed’

When Reeves gets up on Wednesday, she will put it differently, saying the “world has changed” and all that means is the government must move “further and faster” to deliver the reforms that will drive growth.

But her opponents will be quick to lay economic woes at her door, arguing that the unexpected £25bn tax hike on employers’ national insurance contributions last October have choked off growth.

But it’s not just opposition from the Conservative benches that the chancellor is facing – it is opposition from within as she sets about cutting government spending to the tune of £15bn to fill that black hole.

Politically, her allies know how awkward it would have been for the chancellor to announce £5bn in welfare cuts to avoid breaking her own fiscal rules, with one acknowledging that those cuts had to be kept separate from the spring statement.

There’s also expected to be more than £5bn of extra cuts from public spending in the forecast period, which could see departments that don’t have protected budgets – education, justice, home – face real-term spending cuts by the end of the decade.

Not an emergency budget

We won’t see the detail of that until the Spending Review in June.

This is not an emergency budget because the chancellor isn’t embarking on a round of tax raising to fix the public finances.

But these are, however they are framed, emergency spending cuts designed to plug her black hole and that is politically difficult for a government that has promised no return to austerity if some parts of the public sector face deep cuts to stick with fiscal rules.

If that’s the macro picture, what about the “everyday economics” of peoples’ lives?

I’d point out two things here. On Wednesday, we will get to see where those £5bn of welfare cuts will fall as the government publishes the impact assessment that it held back last week.

Up to a million people could be affected by cuts, and the reality of who will be hit will pile on the pressure for Labour MPs already uncomfortable with cuts to health and disability benefits.

The second point is whether the government remains on course to deliver its key pledge to “put more money in the pockets of working people” during this parliament after the Joseph Rowntree Foundation think-tank produced analysis over the weekend saying living standards for all UK families are set to fall by 2030.

The chancellor told my colleague Trevor Phillips on Sunday that she “rejects” the analysis that the average family could be £1,400 worse off by 2030.

But that doesn’t mean that the forecasts published on Wednesday calculating real household disposable income per head won’t make for grim reading as the economic outlook deteriorates.

Nervousness in Labour

Ask around the party, and there is obvious nervousness about how this might land, with a degree of anxiety about the economic outlook and what that has in store for departmental budgets.

But there is recognition too from many MPs that the government has political space afforded by that whopping majority, to make these decisions on spending cuts without too much fallout – for now.

Because while Wednesday will be bad, worse could be yet to come.

Staring down the barrel

The chancellor is staring down the barrel of a possible global trade war that will only serve to create more economic uncertainty, even if the UK is spared from the worst tariffs by President Donald Trump.

The national insurance hike is also set to kick in next month, with employers across the piece sounding the warnings around investment, jobs and growth.

Six months ago, Reeves said she wouldn’t be coming back for more after she announced £40bn in tax rises in that massive first budget.

Six months on she is coming back for more, this time in the form of spending cuts. And in six months’ time, she may well have to come back for more in the form of tax rises or deeper cuts.

The spring statement was meant to be a run-of-the-mill economic update, but it has morphed into much more.

The chancellor now has the hard sell to make from a very hard place, that could soon become even tougher still.

Politics

Google Play blocks access to 17 unregistered exchanges in South Korea

Published

2 hours ago

March 26, 2025

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Google Play blocks access to 17 unregistered exchanges in South Korea

Google Play implemented access restrictions to 17 unregistered overseas crypto exchanges catering to local users in South Korea at the request of the country’s regulators.

On March 21, the Financial Intelligence Unit (FIU) of the South Korean Financial Services Commission (FSC) said it was considering sanctions against operators that did not report to the relevant authorities.

Authorities require virtual asset service providers (VASPs) to report to regulators under the country’s Specified Financial Information Act.

At the time, the FIU said it was coordinating with the Korea Communications Standards Commission (KCSC), the regulator in charge of the internet, on how they could block access to the exchanges.

By March 26, the FSC published a list of 22 unregistered platforms, highlighting 17 that had been blocked from the Google Play store. The move restricts new downloads and updates for affected apps, effectively limiting user access.

Google Play restricts access to 17 unregistered exchanges

The FSC said the 17 exchanges highlighted on the list were now restricted in the Google Play Store. This means their applications will not be available for new users to download and install. In addition, existing users will be unable to access updates from the apps.

Exchanges in the access restriction list include: KuCoin, MEXC, Phemex, XT.com, Biture, CoinW, CoinEX, ZoomEX, Poloniex, BTCC, DigiFinex, Pionex, Blofin, Apex Pro, CoinCatch, WEEX and BitMart.

The FSC expects the move to help prevent money laundering acts using crypto assets and potential future damages to local users. The FIU said it is also coordinating with Apple Korea and the KCSC to block internet and App Store access to the exchange platforms.

KuCoin previously told Cointelegraph that it was monitoring regulatory developments in all jurisdictions, including South Korea. The exchange said compliance was essential for crypto’s sustainable growth. However, the exchange did not provide detailed information on its plans for South Korea.

South Korean exchanges face controversies

South Korean regulators’ actions against unregistered exchanges follow the country’s increased scrutiny of crypto trading platforms.

On March 20, Seoul’s Southern District Prosecutors’ Office raided Bithumb offices in the country, as prosecutors suspected financial misconduct involving the exchange’s former CEO. Prosecutors suspected Bithumb board member Kim Dae-sik of using company funds to purchase a personal apartment.

In addition, a Wu Blockchain report of intermediaries being paid to list token projects on Bithumb and Upbit surfaced. In response to the report, Upbit demanded the release of the identities of crypto projects that claimed to have paid intermediaries to be listed.

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Politics

IMX surges 15% after Immutable says SEC ended probe

Published

8 hours ago

March 26, 2025

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IMX surges 15% after Immutable says SEC ended probe

The token tied to the crypto gaming giant Immutable surged 15% in the hours after it announced that the US Securities and Exchange Commission closed its investigation into the firm and would take no further action.

The Immutable (IMX) token rose around 15% on March 25 to reach just under $0.74 shortly after the firm announced that the SEC shut its inquiry without any breach of violations, which Immutable said closed “the loop on the Wells notice issued by the SEC last year.”

IMX matched crypto market downtrend

It is the highest price that IMX has reached since March 3, before a broader market decline — driven by prolonged uncertainty over US President Donald Trump’s tariffs and US interest rates — pushed it down to $0.46 on March 11.

At the time of publication, IMX had retraced back to $0.67, according to CoinMarketCap. A move back toward $0.70 would wipe approximately $449,500 in short positions, according to CoinGlass data.

Cryptocurrencies, Markets — *IMX is up 0.34% over the past 30 days. Source:* *CoinMarketCap*

While the token price surged on the positive news, it barely moved when Immutable announced in November it had been issued a Wells notice. However, the broader market was already gaining momentum as Trump’s odds to win the election looked strong in the days before his eventual win on Nov. 5.

Immutable co-founder Robbie Ferguson said in a March 25 X post that the SEC’s dropped investigation was “an enormous win for Web3 gaming.”

“After a year of fighting, this threat to digital ownership rights has finally been put to rest,” Ferguson said.

Among the top gaming crypto tokens by market cap, several have seen an upswing over the past 24 hours. Gala (GALA) is up 2.78%, The Sandbox (SAND) is up 3.78%, FLOKI (FLOKI) is up 1.91%, and Axie Infinity (AXS) is up 1.50%.

IMX hit its all-time high of $9.32 in November 2021 during a major rally in gaming tokens. There’s been speculation about when gaming tokens will experience another significant uptrend, as they’ve historically surged after the broader crypto market moves first.

However, over the past 30 days, the total market cap of gaming tokens has dropped 3.65% to $13.13 billion, while trading volume has taken a bigger hit, falling 33.45% to $1.75 billion.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Politics

North Carolina bills would add crypto to state’s retirement system

Published

8 hours ago

March 26, 2025

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North Carolina bills would add crypto to state’s retirement system

North Carolina lawmakers have introduced bills in the House and Senate that could see the state’s treasurer allocate up to 5% of various state retirement funds into cryptocurrencies such as Bitcoin.

The Investment Modernization Act (House Bill 506), introduced by Representative Brenden Jones on March 24, would create an independent investment authority under the state’s Treasury to determine which digital assets could be suitable for inclusion into the state retirement funds.

An identical bill, the State Investment Modernization Act (Senate Bill 709), was introduced into the state’s Senate on March 25.

The bills define a digital asset as a cryptocurrency, stablecoin, non-fungible token (NFT), or any other asset that is electronic in nature that confers economic, proprietary or access rights.

The North Carolina bills don’t set market cap criteria for digital assets, unlike other crypto bills that are working their way into law at the state level.

The newly created agency, dubbed the North Carolina Investment Authority, would, however, need to carefully weigh the risk and reward profile of each digital asset and ensure the funds are maintained in a secure custody solution.

Bitcoin legislation tracker Bitcoin Laws noted on X that House Bill 506 wasn’t drafted as a Bitcoin reserve bill as it does not mandate the investment authority to hold Bitcoin (BTC) — or any digital asset — over the long term.

North Carolina wants in on Bitcoin bill race

On March 18, North Carolina senators introduced the Bitcoin Reserve and Investment Act (Senate Bill 327), which calls for the treasurer to allocate up to 10% of public funds specifically into Bitcoin.

The bill — introduced by Republicans Todd Johnson, Brad Overcash and Timothy Moffitt — aims to leverage Bitcoin investment as a “financial innovation strategy” to strengthen North Carolina’s economic standing.

The treasurer would need to ensure that the Bitcoin is stored in a multi-signature cold storage wallet, and the BTC could only be liquidated during a “severe financial crisis,” with approval from two-thirds of North Carolina’s General Assembly.

The bill would also create a Bitcoin Economic Advisory Board to oversee the reserve’s management.

According to Bitcoin Law, 41 Bitcoin reserve bills have been introduced at the state level in 23 states, and 35 of those 41 bills remain live.

Earlier this month, US President Donald Trump signed an executive order to create a Strategic Bitcoin Reserve and a Digital Asset Stockpile, both of which will initially use cryptocurrency forfeited in government criminal cases.

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