Business
Reeves could raise billions without breaking Labour pledges – IFS
Rachel Reeves could raise tens of billions from tax reforms without breaking Labour’s manifesto pledges but must avoid “half-baked fixes” to Britain’s economic woes at the Budget, leading economists have said.
The Government is under pressure to balance the books ahead of November’s autumn statement amid warnings of a black hole estimated to be as much as £50 billion in the public finances.
But in a wide-ranging report, the Institute for Fiscal Studies urged the Chancellor to resist “simply hiking rates” without making other changes to an “unfair” and “inefficient” tax system.
It also warned that restricting income tax relief on pension contributions “should be avoided” and repeated its cautions against an annual wealth tax, which it says would penalise savers, or increasing stamp duty.
Among the options available to the Chancellor as set out by the IFS are:
– Ending capital gains tax relief on death, which allows for assets to be inherited without paying CGT on the increase in value over the deceased person’s lifetime, to raise £2.3 billion in 2029-30.
– Impose a “one-off” tax on wealth, while avoiding what it described as “serious drawbacks” of a recurring wealth tax.
– Double council tax rates on the top two property bands to raise £4.4 billion. Any extra cash from changes to council tax would flow to local authorities rather than central government, but Ms Reeves could in turn reduce the grants paid to local authorities if she wanted to bolster the Treasury’s coffers, the IFS said.
– Reforming death duties to abolish the additional £175,000 tax-free allowance that can be used when passing on a primary residence to a direct descendant, raising around £6 billion.
– Increasing the bank levy and the bank surcharge, which taken together will already raise a total of £2.4 billion in 2025-26. A one percentage point increase in the bank surcharge would raise around £0.4 billion in 2029-30.
– Tackling non-compliance to narrow a widening corporation tax gap between the amount of tax the Government thinks should be paid and how much it actually collects.
“It would be possible for the Chancellor to raise tens of billions of pounds a year more in revenue without breaking the letter of Labour’s manifesto promise not to increase the ‘big three’ taxes.
“But doing so would not be straightforward,” the IFS said.
On the other hand, extending the freeze on personal tax thresholds including national insurance contributions (NICs) further would be expected to raise around £10.4 billion a year from 2029-30.
But this would amount to a breach of Labour’s manifesto pledge not to increase taxes for “working people” which includes income tax, national insurance and VAT, the IFS said.
The think tank also called for a wider overhaul of the council tax system, arguing that banding is still based on the value of properties as of 1991 and must be updated to end a “regressive” and “hard to justify” rate structure.
It said a “good end goal” would be to replace stamp duty on housing and council tax with a “new recurrent property tax” proportionate to updated values.
“Changing rates and thresholds is all very well, but unless the Chancellor is willing to pursue genuine reform it will be taxpayers that shoulder the cost of her neglect,” the report, which forms a chapter in the IFS’ wider budget assessment for 2025, says.
Economists have warned Ms Reeves is set for a £41 billion shortfall on her self-imposed rule of balancing day-to-day spending with tax receipts in 2029-30 ahead of her Budget next month.
Isaac Delestre, a senior research economist at the think tank and an author of the chapter, said Ms Reeves would have “fallen short” if she limits her ambition to a dash for revenue without wider reform.
“Almost any package of tax rises is likely to weigh on growth, but by tackling some of the inefficiency and unfairness in our existing tax system, the Chancellor could limit the economic damage,” he said.
“The last thing we need in November is directionless tinkering and half-baked fixes. There is an opportunity here.
“The Chancellor should use this Budget to take real steps down the road towards a more rational tax system that is better geared to promoting the prosperity and well-being of taxpayers.”
Thomas Fuller | SOPA Images | Lightrocket | Getty Images
UniQure needs to run another study to prove that its gene therapy “actually helps people with Huntington’s disease,” a senior U.S. Food and Drug Administration official said on a call with reporters Thursday.
The official, who requested anonymity before discussing sensitive information, confirmed the agency has asked the company to run a placebo controlled trial of its treatment, which is administered directly into the brain. UniQure has said that type of study isn’t ethical because it would require putting people under general anesthesia for hours, a characterization the official disputed.
“So what is really going on? UniQure is the latest company to make a failed therapy for Huntington’s patients,” the official said. “They likely acknowledge or understand at some deep level that their trial failed years ago, and instead of doing the right thing and running the correct clinical study, UniQure is performing a distorted or manipulated comparison in the mind of FDA.”
The comments mark the latest development in a messy public spat between UniQure and the FDA, and as the agency comes under fire for a number of recent drug approval application rejections, including some where companies have accused it of going back on previous guidance. FDA Commissioner Marty Makary in an interview with CNBC’s Becky Quick last week seemingly criticized UniQure’s gene therapy for Huntington’s disease. Makary didn’t name UniQure but described its treatment.
UniQure then accused the FDA of reversing its stance that the company’s clinical trial data would be sufficient to seek approval. UniQure’s study used an outside database to measure how patients with Huntington’s disease might decline without treatment, known as an external control. UniQure has said it wouldn’t be feasible to run a true randomized, double-blind placebo-controlled study, considered the gold standard, because it wouldn’t be ethical to make people undergo a sham hours-long brain surgery.
The FDA official said the agency “never agreed to accept this distorted comparison” and the FDA “never makes such assurances.” Instead, the “FDA will always say, ‘Well, we have to see the data when we get it.'”
UniQure didn’t immediately comment.
The company’s stock rose more than 10% on Thursday and has fallen 58% this year as of Thursday afternoon.
Business
US mortgage rates rise to 6% after three-week slide as oil-driven bond yields climb – The Times of India
The average long-term US mortgage rate edged higher this week, ending a three-week decline as bond yields rose amid oil-price pressures linked to the war with Iran.The benchmark 30-year fixed mortgage rate increased to 6% from 5.98% last week, mortgage buyer Freddie Mac said on Thursday. A year ago, the average rate stood at 6.63%, AP reported.The modest uptick breaks a three-week slide in borrowing costs, with mortgage rates having hovered close to the 6% mark for most of this year. Last week’s average had marked the first time the rate dipped below 6% since September 2022, reaching its lowest level in nearly three and a half years.Mortgage rates are influenced by several factors, including the Federal Reserve’s interest-rate policy, investor expectations about inflation and economic growth, and movements in the bond market.They typically track the direction of the 10-year US Treasury yield, which lenders use as a benchmark for pricing home loans.The 10-year Treasury yield rose to 4.14% at midday Thursday, up from around 4% a week earlier.Treasury yields have moved higher in recent days as rising oil prices added fresh inflation concerns, potentially complicating the Federal Reserve’s plans to cut interest rates.
Business
US stocks today: Dow tumbles 800 points, S&P 500 and Nasdaq slip as oil surges after Iran tanker strike – The Times of India
US stock markets fell on Thursday as investors turned cautious after the previous session’s rally, while rising oil prices and geopolitical tensions weighed on sentiment.The Dow Jones Industrial Average dropped 801 points, or 1.6 per cent, dragged down by losses in stocks such as Caterpillar and Goldman Sachs. The S&P 500 declined 0.9 per cent, while the Nasdaq Composite fell 0.6 per cent.The selloff came as crude oil prices jumped to their highest level since June 2025 after Iran said it had struck an oil tanker with a missile. US West Texas Intermediate crude futures surged 6 per cent to trade above $79 per barrel, while international benchmark Brent crude futures rose about 3 per cent to more than $84 per barrel. Oil prices had stabilised in the previous trading session.Markets had rallied on Wednesday, supported by gains in technology and semiconductor stocks. The Dow had snapped a three-day losing streak, while the S&P 500 and Nasdaq Composite ended the session with solid gains.Despite the ongoing US-Israeli air campaign against Iran, US markets have performed relatively better than European and Asian counterparts this week, largely supported by a rebound in technology stocks that had been hit hard during February’s selloff.The tech-led recovery in the previous session helped the Nasdaq erase its weekly losses, putting the index on track to end the week in positive territory if gains hold through Friday.Investors remain concerned that prolonged disruption to shipping through the Strait of Hormuz — a key global energy corridor –could push oil prices higher and add to inflationary pressures through rising energy and shipping costs.Markets are particularly wary of crude prices moving towards $100 per barrel, which could complicate the Federal Reserve’s efforts to control inflation while considering interest-rate cuts.“For the past couple of years, bringing inflation down has been the Fed’s entire focus, and they were finally making progress. But if energy stays expensive, inflation could start climbing again and that would force the Fed to rethink its plans,” said Adam Sarhan, chief executive of 50 Park Investments, Reuters quoted.According to data compiled by LSEG, investors are increasingly expecting the Federal Reserve to delay a 25-basis-point interest rate cut to September from the previously anticipated July timeline.Among sectors, healthcare led declines on the S&P 500, dropping 1.6 per cent. The energy index, however, gained 0.7 per cent, with shares of ConocoPhillips and Valero Energy rising about 2 per cent each.The CBOE volatility index (VIX), widely seen as a gauge of market fear, rose 0.9 points to 22.08, reflecting cautious investor sentiment. The small-cap Russell 2000 index fell 1 per cent.Travel and tourism stocks, which are sensitive to fuel costs, were under pressure. Delta Air Lines slipped 3.3 per cent, while Royal Caribbean Cruises declined 0.6 per cent.On the other hand, some travel booking companies rallied sharply. Booking Holdings jumped 11 per cent and Expedia surged 8 per cent after a report by The Information said OpenAI was scaling back on-platform shopping checkout plans for ChatGPT, easing concerns about disruption to online marketplace businesses.Chip stocks showed mixed performance. Nvidia edged down 0.3 per cent, while Marvell Technology gained 1.3 per cent.Shares of Broadcom rose 2.9 per cent after the chip designer projected that its artificial intelligence chip revenue could exceed $100 billion next year.Elsewhere, Trade Desk surged 22.5 per cent following a report that OpenAI had held early discussions with the advertising technology company regarding the sale of advertisements.Economic data released on Thursday showed the number of Americans filing new applications for unemployment benefits remained unchanged last week.Investors are also awaiting remarks from Federal Reserve Vice Chair Michelle Bowman later in the day, ahead of the closely watched non-farm payrolls report due on Friday.On the New York Stock Exchange, declining stocks outnumbered advancers by a ratio of 2.48-to-1, while on the Nasdaq the ratio stood at 1.63-to-1.The S&P 500 recorded four new 52-week highs and two new lows, while the Nasdaq Composite registered 17 new highs and 33 new lows.
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