Australia drafts law to tighten oversight of crypto exchanges
Crypto-friendly White House economic adviser Kevin Hassett has reportedly emerged as a top candidate for the next Federal Reserve chair, replacing Jerome Powell when his tenure is up in May.
President Donald Trump’s advisers and backers see Hassett as the frontrunner to take over as Fed chair, as he’s expressed sympathy with Trump’s desire to cut rates, Bloomberg reported on Tuesday, citing people familiar with the matter.
Hassett is the director of the National Economic Council, who oversees the White House’s digital asset working group that Trump created in January. This group released a report in July outlining policy considerations for crypto.
Hassett is one of many reported crypto-friendly Fed chair picks who have backed Trump’s desire for the central bank to cut rates to juice up the markets. Powell’s time as chair is up in May, but his tenure on the Fed Board extends until January 2028.
Asked by Fox News on Tuesday if he would take a job as Fed chair, Hassett said, “Of course I’d have to say yes, because I want to serve my country and I want to serve my president.”
“President Trump and I have talked a lot about it,” he added.
Hassett owns Coinbase stocks, was a crypto adviser
In June, Hassett reportedly disclosed that he owned at least $1 million worth of Coinbase (COIN) stock.
He also disclosed that he received a $50,001 salary from Coinbase for serving on the crypto exchange’s Academic and Regulatory Advisory Council, which the company created in 2023 and also included Manhattan US Attorney Jay Clayton.
Related: Prospective CFTC chair’s nomination advances through committee
Hassett has previously served on the advisory board for the crypto fund manager One River Digital Asset Management and was chair of the White House Council of Economic Advisers from 2017 to 2019, in Trump’s first term.
Trump’s Fed chair list looks crypto-friendly
Trump has reportedly also screened Fed Governor Chris Waller, who advocated for decentralized finance to bankers in August.
Also on the potential to take over the Fed is its vice supervision chair, Michelle Bowman, who said Fed staff should be allowed to invest a small amount in crypto to get a “working understanding of the underlying functionality.”
Whoever Trump picks, he’ll be pressuring them to cut rates. The Fed has cut rates twice this year by a total of 50 basis points.
The market has turned bullish on a Christmas cut when the Fed meets in December, with CME’s FedWatch putting the chances of a 25-basis-point cut at around 85%.
Magazine: Quitting Trump’s top crypto job wasn’t easy: Bo Hines
A raft of tax rises is expected in the budget this lunchtime – with the chancellor acknowledging that voters are “angry at the unfairness in our economy”.
In a newly released video, Rachel Reeves said the public is “frustrated at the pace of change” – but vowed to “take the fair and necessary choices” to tackle the cost of living crisis.
And in a dig at the Conservatives – especially former prime minister Liz Truss – she pledged not to impose austerity, lose control of public spending, or engage in more reckless borrowing.
Budget 2025: Follow the latest in the Money blog and Politics Hub
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10 times Labour promised not to hike taxes
Tax rises: What we know so far
Taxation will be a dominant part of the budget as Ms Reeves tries to plug an estimated £30bn black hole in the public finances.
A headline measure is expected to be an extension of the freeze on income tax thresholds for another two years beyond 2028, which should raise about £8bn.
But given the chancellor had ruled out such a measure last year – because it would “hurt working people” and “take more money out of their payslips” – this will attract criticism from opposition parties.
The chancellor has backed away from raising income tax rates outright, a move that would have breached Labour’s manifesto, but she still needs to find the cash to pay for her public spending plans.
Watch our special programme for Budget 2025 live on Sky News from 11am
Some measures already confirmed by the government include:
• Allowing local authorities to impose a levy on tourists staying in their areas
• Expanding the sugar tax levy to packaged milkshakes and lattes
• Imposing extra taxes on higher-value properties
It is being reported that the chancellor will also put a cap on the tax-free allowance for salary sacrifice schemes, raise taxes on gambling firms, and bring in a pay-per-mile scheme for electric vehicles.
Setting the scene ahead of the budget at 12.30pm, Ms Reeves said she will “push ahead with the biggest drive for growth in a generation”, promising investment in infrastructure, housing, security, defence, education, and skills.
Although she has vowed not to “duck challenges” nor “accept that our past must define our future”, she admitted that “the damage done from austerity, a chaotic Brexit, and the pandemic were worse than we thought”.
The fiscal black hole is down to several factors – including a downgrade in the productivity growth forecast, U-turns on cuts to benefits and the winter fuel allowance, as well as “heightened global uncertainty”.
Nonetheless, the chancellor has promised more investment to cut NHS waiting lists, deal with “waste in the public sector”, and reduce the national debt.
“This budget is for you, the British people. So that together we can build a fairer, stronger, and more secure Britain,” she said.
Conservative shadow chancellor Sir Mel Stride has said Ms Reeves is “trying to pull the wool over your eyes” – having promised last year that she would not need to raise taxes again.
Meanwhile, Liberal Democrat deputy leader Daisy Cooper has accused her and the prime minister of “yet more betrayals”.
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What is the ‘milkshake tax’?
What could her key spending announcements be?
As well as filling the black hole in the public finances, these measures could allow the chancellor to spend money on a key demand of Labour MPs – partially or fully lifting the two-child benefits cap, which they say will have an immediate impact on reducing child poverty.
Benefits more broadly will be uprated in line with inflation, at a cost of £6bn, The Times reports.
In an attempt to help households with the cost of the living, the paper also reports that the chancellor will seek to cut energy bills by removing some green levies, which could see funding for some energy efficiency measures reduced.
Other measures The Times says she will announce include retaining the 5p cut in fuel duty, and extending the Electric Car Grant by an extra year, which gives consumers a £3,750 discount at purchase.
The government has already confirmed several key announcements, including:
• An above-inflation £550 a year increase in the state pension for 13 million eligible pensioners
• A freeze in prescription prices and rail fares
• £5m to refresh libraries in secondary schools
Extra funding for the NHS will also be announced in a bid to slash waiting lists, including the expansion of the “Neighbourhood Health Service” across the country to bring together GP, nursing, dentistry and pharmacy services – as well as £300m of investment into upgrading technology in the health service.
And although the cost of this is borne by businesses, the chancellor will confirm a 4.1% rise to the national living wage – taking it to £12.71 an hour for eligible workers aged 21 and over.
For a full-time worker over the age of 21, that means a pay increase of £900 a year.
Read more from Sky News:
Will expected ‘stealth tax’ announcement affect you?
Are we set for another astoundingly complex budget?
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What the budget will mean for you
Britons facing ‘cost of living permacrisis’
However, the Tories have hit out at the chancellor for the impending tax rises, with shadow chancellor Sir Mel Stride saying in a statement: “Having already raised taxes by £40bn, Reeves said she had wiped the slate clean, she wouldn’t be coming back for more, and it was now on her. A year later and she is set to break that promise.”
He described her choices as “political weakness” – choosing “higher welfare and higher taxes”, and “hardworking families are being handed the bill”.
The Liberal Democrat deputy leader Daisy Cooper is also not impressed, and warned last night: “The economy is at a standstill. Despite years of promises from the Conservatives and now Labour to kickstart growth and clamp down on crushing household bills, the British people are facing a cost-of-living permacrisis and yet more betrayals from those in charge.”
She called on the government to negotiate a new customs union with the EU, which she argues would “grow our economy and bring in tens of billions for the Exchequer”.
Green Party leader Zack Polanski has demanded “bold policies and bold choices that make a real difference to ordinary people”.
The SNP is calling on the chancellor to “help families” rather than “hammer them with billions of pounds of cuts and damaging tax hikes that destroy jobs and hurt economic growth”.
A headline tax-raising measure expected in today’s budget is an extension of the freeze on income tax thresholds for another two years beyond 2028, which should raise about £8bn.
The amount people pay is dependent on how much they earn, with different tax bands kicking in at different income levels.
Read more: Chancellor to announce tax rises in budget
In the past, these thresholds have been increased in line with inflation. But more recently they have been frozen, leaving people paying more to the exchequer even if actual tax rates stay the same.
The Conservative government began the thresholds freeze in 2021. At last year’s budget, Rachel Reeves said the Labour government would extend the freeze though not beyond 2028, as to do so would “hurt working people”.
Sky News looks at what the thresholds are, the implications of freezing them, and how that causes “fiscal drag”.
Income tax thresholds
England, Northern Ireland and Wales all have the same income tax rates, set by the British government.
Scotland’s income tax bands are set by the Scottish government, so Westminster budget announcements on income tax do not affect workers in Scotland.
For England, Northern Ireland and Wales, there is a “personal allowance” of £12,570, under which no income tax is paid.
For those earning above £100,000, the personal allowance goes down by £1 for every £2 of income, and can go down to zero, so a person can end up paying income tax on all of their income.
What does freezing thresholds do?
Thresholds were previously increased annually by consumer price index (CPI) inflation – the estimate of the level of prices of goods and services bought by households.
But, because income tax thresholds have been frozen while wages continue to rise, more people are being brought into higher bands and having to pay more income tax.
A worker whose earnings just keep up with inflation is paying a larger proportion of their salary in tax due to the freeze.
This means more money for the government – a lot more.
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The budget vs your wallet: How the chancellor could raise billions
The Office for Budget Responsibility (OBR) estimates a continuing freeze in thresholds would raise about £42.9bn annually by the 2027/28 tax year.
And the Institute for Fiscal Studies (IFS) has projected that freezes to the basic and higher rates of income tax alone would raise £39bn a year by 2029-30.
That is roughly similar to the amount of revenue that would be raised by increasing all income tax rates by 3.5 percentage points.
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Sky News goes inside the room where the budget is decided
Fiscal drag
Freezing income tax thresholds without tax rates increasing has been branded a “stealth tax”, as the government collects more revenue without having to pass a law to raise tax rates.
It is also known as fiscal drag, as more people are pulled into paying tax, or into paying tax at a higher rate.
The OBR estimates the freeze will bring nearly four million more people into paying income tax, three million more people into the higher rate (40%) and 400,000 more into the additional rate (45%) by 2028-29.
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