Chancellor Rachel Reeves ‘rejects’ analysis average family set to be £1,400 a year poorer by 2030

Published

2 days ago

March 23, 2025

admin

The chancellor says she “rejects” new analysis that suggests the average family could be £1,400 a year worse off by the end of the decade.

Rachel Reeves told Sky’s Sunday Morning With Trevor Phillips programme that living standards will “increase during the course of this parliament”.

She insisted there has already been a “sustained increase” since Labour came to power last year.

The analysis, by the Joseph Rowntree Foundation (JRF), says frozen tax thresholds, rising mortgage and rent costs, and falling real earnings are all predicted to take their toll on living standards in Britain.

For the poorest third, living standards are forecast to drop twice as much compared with middle and high earners.

The charity believes the government will miss one of its stated “milestones” – to raise living standards across the UK before the next election.

It says the £1,400 drop by April 2030 means a 3% fall in disposable income for the average family, while the lowest income households will be £900 per year worse off – a 6% fall.

The situation could be even bleaker for some, as the analysis doesn’t account for the recently announced £5bn in cuts to disability benefits.

Average earnings are also set to fall by £700 per year by 2030, according to the JRF.

The charity – which conducts research into reducing poverty – says it came up with its prediction by modelling forecasts from the Bank of England and others.

Chancellor ‘confident we will see living standards increase’

Asked by Trevor Phillips for her response to the findings, the chancellor said she “rejects” them.

Ms Reeves argued living standards in the last parliament “were the worst ever on record”, and said the independent Office for Budget Responsibility (OBR) said in October they are expected to increase, while wages are currently rising at twice the rate of inflation.

“I’m confident that we will see living standards increase during the course of this parliament,” the chancellor insisted, adding there has been a “sustained increase” since Labour was elected.

“We’ve got to do more, absolutely, in terms of raising living standards. But this government has already got started in delivering our plan for change.”

But the JRF says the government welfare cuts are “wrong” and counterproductive and wants the plan scrapped.

It also urges a new “minimum floor” for Universal Credit to help address hardship, and believes the government should instead raise cash by increasing tax on wealth and investments.

The analysis comes three days before the chancellor’s spring statement in which more cuts are set to be announced in a bid to improve the country’s finances.

Some £2bn in cuts to the civil service are expected – but Ms Reeves says they will not affect front line services.

She has also confirmed to The Sun On Sunday that she won’t be announcing any new tax rises.

Her speech will be in response to the OBR, which on the same day will publish its own forecasts on the economy, the cost of living and government finances.

Growth is Labour’s top priority, but the Bank of England recently halved its growth outlook for the UK economy this year to 0.75%.

There are also worries next month’s hike to employer national insurance and the minimum wage will create further drag on investment.

Politics

Chancellor Rachel Reeves expected to announce further welfare cuts in spring statement

Published

3 hours ago

March 25, 2025

admin

Chancellor Rachel Reeves expected to announce further welfare cuts in spring statement

Rachel Reeves will unveil further welfare cuts in her spring statement after being told the reforms announced last week will save less than planned, Sky News understands.

The Office for Budget Responsibility (OBR) has rejected the government’s assessment that the package of measures, including narrowing the eligibility criteria for personal independence payments (PIP), will save £5bn.

Politics latest: Ex-Labour leader says Starmer ‘an enormous disappointment’

The fiscal watchdog put the value of the cuts at £3.4bn, leaving ministers scrambling to find further savings.

Ms Reeves is now expected to announce that universal credit (UC) incapacity benefits for new claimants, which were halved under the original plan, will also be frozen until 2030 rather than rising in line with inflation

As originally reported by The Times, there will also be a small reduction in the basic rate of UC in 2029, with the new measures expected to raise £500m.

A Whitehall source told Sky’s political editor Beth Rigby that it is “hard to tell how MPs will react”, as while the OBR’s assessment means fewer people will be affected by the PIP changes than thought, they “might be unhappy about the chaotic nature of it all”.

The government did not publish an impact assessment of the crackdown on benefits it announced last week, saying that would come alongside the spring statement on Wednesday.

Several Labour MPs criticised the measures as pushing more sick and disabled people into poverty, while former Labour leader Jeremy Corbyn called the package a “disgrace” on Tuesday and accused the government of imposing austerity on the country.

Spending cuts expected

Ms Reeves is expected to announce a large package of departmental spending cuts when she gives an update on the economy on Wednesday, potentially putting her on a further collision course with her own MPs.

Having only committed to doing one proper budget each year in the autumn, the spring statement was meant to be a low-key affair.

However, a turbulent economic climate since October means the OBR is widely expected to downgrade its growth forecasts for the UK while the government has borrowed more than previously expected.

This has wiped out the £9.9bn gap in her fiscal headroom Ms Reeves left herself at her budget last year – money she needs to make up if she wants to stick to her self-imposed fiscal rule that day-to-day spending must be funded through tax receipts, not debt, by 2029-30.

The chancellor has sought to blame global factors but the Conservatives blame measures like the national insurance tax hike on employers, saying this is choking business.

Shadow chancellor Mel Stride urged Ms Reeves to “use the emergency budget” to “fix her own mistakes and end Labour’s war on enterprise”.

Ms Reeves will defend her record in the spring statement, saying she is “proud” of what Labour has achieved in its first nine months in office.

However, on the eve of the statement, polling showed the public is pessimistic about what is to come.

According to More in Common, half think the cost of living crisis will never end, while YouGov found three-quarters of people want to see a tax on the richest over spending cuts.

Ms Reeves is not expected to announce any tax hikes, having said her tax-raising budget in October was a once-in-a-parliament event.

Defence increase to ‘deliver security’

In a bid to fend off criticism, she will also announce an extra £2.2bn will be spent on defence over the next year to “deliver security for working people”.

The money is part of the government’s aim to hike defence spending to 2.5% of the UK’s economic output by 2027 – up from the 2.3% where it stands now.

Ms Reeves will insist this plan, set out by the prime minister in February, was the “right decision” against the backdrop of global instability, saying it will put “an extra 6.4bn into the defence budget by 2027”.

“This increase in investment is not just about increasing our national security but increasing our economic security, too,” she will say.

The money is coming from reductions to the international aid budget and Treasury reserves, and will be used to invest in new technology, refurbish homes for military families and upgrade HM Naval Base Portsmouth.

Politics

FDIC moves to eradicate ‘reputational risk’ category from bank exams

Published

3 hours ago

March 25, 2025

admin

<div>FDIC moves to eradicate 'reputational risk' category from bank exams</div>

The US Federal Deposit Insurance Corporation, an independent agency of the federal government, is reportedly moving to stop using the “reputational risk” category as a way to supervise banks.

According to a letter sent by the agency’s acting chairman, Travis Hill, to Rep. Dan Meuser on March 24, banking regulators should not use “reputational risk” to scrutinize firms.

“While a bank’s reputation is critically important, most activities that could threaten a bank’s reputation do so through traditional risk channels (e.g., credit risk, market risk, etc.) that supervisors already focus on,” notes the letter, first reported by Politico.

According to the document, the FDIC has completed a “review of all mentions of reputational risk” in its regulations and policy documents and has “plans to eradicate this concept from our regulatory approach.”

Reputational risk and debanking

The Federal Reserve defines reputational risk as “the potential that negative publicity regarding an institution’s business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions.”

The FIDC letter specifically mentioned digital assets, with Hill noting that the agency has generally been “closed for business” for institutions interested in blockchain or distributed ledger technology. Now, as per the document, the FDIC is working on a new direction for digital asset policy aiming at providing banks a way to engage with digital assets.

The letter was sent in response to a February communication from Meuser and other lawmakers with recommendations for digital asset rules and ways to prevent debanking.

Industries deemed as “risky” to banks often face significant challenges in establishing or maintaining banking relationships. The crypto industry faced such challenges during what became known as Operation Chokepoint 2.0.

The unofficial Operation led to more than 30 technology and cryptocurrency companies being denied banking services in the US after the collapse of crypto-friendly banks earlier in 2023.

Politics

SEC closes investigation into Immutable nearly 5 months after Wells notice

Published

5 hours ago

March 25, 2025

admin

SEC closes investigation into Immutable nearly 5 months after Wells notice

Web3 gaming platform Immutable says the US Securities and Exchange Commission has closed its investigation into the company, clearing it of any further action.

Immutable — the firm behind the Ethereum layer-2 ImmutableX — said in a March 25 statement that the SEC shut its inquiry into the firm without finding wrongdoing and “closes the loop on the Wells notice issued by the SEC last year.”

In November, Immutable said it received a Wells notice from the regulator — a letter informing that the SEC is considering an enforcement action, typically sent after it concludes there is evidence of possible securities law violations.

“We are pleased the SEC has concluded its inquiry. This marks a significant milestone for the crypto industry and gaming as we advance towards a future with regulatory clarity,” Immutable president and co-founder Robbie Ferguson said in a statement.

An Immutable spokesperson told Cointelegraph that the SEC sent it a letter of termination that didn’t explain why it had concluded its probe. The spokesperson said the letter was unprompted and that the SEC’s review of information Immutable had sent “appears to have resulted in them closing the investigation.”

Immutable said in a November blog post that it believed the SEC was targeting the 2021 “listing and private sales” of its self-titled Immutable (IMX) token.

SEC, Tokens, GameFi — *Immutable’s X post after receiving a Wells notice in November 2024. Source:* *Immutable*

The company said it had a 10-minute call with the SEC after it had issued the notice where it alleged a 2021 Immutable blog post stating a pre-launch investment made in the IMX token at a price of $0.10, which was issued at a “$10 pre-100:1 split,” was inaccurate and implied there was no exchange of value between the parties.

At the time, Immutable said it was “confident in its position” and would fight the regulator’s claims.

The SEC has dropped many pending and in progress enforcement actions against crypto companies under President Donald Trump, whose administration has worked to defang the agency to make good on his promise to alleviate the crypto industry from regulatory action.

Last month, the SEC stopped its investigations into non-fungible token marketplace OpenSea, trading platform Robinhood, decentralized exchange developer Uniswap Labs and crypto exchange Gemini.

The regulator has also dropped a slew of its high-profile lawsuits against crypto firms, including those against Ripple Labs, Coinbase and Kraken.

Despite the SEC backing off from Immutable, the Manhattan-based Rosen Law Firm has cited the Wells notice in trying to spin up a securities class-action lawsuit against the firm over its IMX token offering, which Immutable’s spokesperson said it’s “not concerned about.”

In its statement, Immutable said that major triple AAA gaming studios “have previously cited legal and compliance risks as key barriers to entry” into the Web3 gaming space.

“However, with a clear regulatory framework on the horizon, this is expected to unlock further investment and opportunities to tokenize the now more than $100 billion market for in-game purchases,” it added.

Web3 Gamer: Classic Sega, Atari and Nintendo games get crypto makeovers