Business
Brexit has made UK economy and productivity ‘weaker’ than thought, says Reeves
Rachel Reeves has said Brexit made the UK’s economy and productivity “weaker” than initially forecast when the UK voted to leave the European Union.
But the Chancellor expressed determination that “the past doesn’t define our future” as she set out plans to scrap paperwork and red tape for thousands of UK businesses in a bid to boost lacklustre economic growth at the Regional Investment Summit in Birmingham on Tuesday.
The gathering of business leaders and investors came after more gloomy news for the Chancellor as Government borrowing in September hit the highest level for the month in five years.
The data from the Office for National Statistics piles more pressure on Ms Reeves ahead of the November 26 Budget, in which she will have to fill a black hole estimated at around £50 billion by some economists.
Ms Reeves said the autumn statement will detail her “plans based on the world as it is, not necessarily the world as I might like it to be” as global volatility and a hike in defence spending “puts pressure on our economy”.
She said exiting the EU had caused more damage than forecasters had expected at the time, with the expected downgrade of the budget watchdog’s previous assumptions likely to make her task of balancing the books even harder.
The Chancellor told reporters: “The Office for Budget Responsibility do the forecasts for the economy. When we left the European Union, or when we voted to leave, they made an estimate about the impact that would have.
“What they’ve done this summer is go back to all of their forecasts and look at what actually happened compared to what they forecast.
“What that shows – and what they will set out – is that the economy has been weaker and productivity has been weaker than they forecast, despite the fact that they forecast that the economy would be weaker because of leaving the EU…
“I am determined that the past doesn’t define our future and that we do achieve that economic growth and productivity with good jobs in all parts of the country.”
Ms Reeves highlighted more than £10 billion in investment commitments secured at the summit, as well as deregulation and reform to planning and capital markets.
The OBR’s assessment will be published in detail alongside the Budget, in which the Chancellor has already acknowledged she is looking at potential tax rises and spending cuts.
The National Institute of Economic and Social Research has suggested Ms Reeves will need to find around £50 billion a year by 2029-39 to meet her goal of balancing day-to-day spending with tax revenues while maintaining “headroom” of around £10 billion against that target.
Asked about her promise not to deliver another tax-raising statement, Ms Reeves said: “This year has been particularly volatile in terms of world events, from Ukraine to the Middle East, to the higher trade tariffs that countries around the world including the UK face. We’re not immune to that, despite the fact that we’re doing trade deals with the EU, India and with the US.
“Of course, that puts pressure on our economy, as does the increased defence spending to keep us safe in an uncertain world.
“I’ll set out all my plans based on the world as it is, not necessarily the world as I might like it to be, in the Budget on November 26.”
Addressing business leaders at Edgbaston Stadium earlier, the Chancellor detailed measures to reform the company merger process, regulations for drones and reforms for artificial intelligence (AI).
She said a cross-economy AI “sandbox” would allow firms to develop new products “under supervision by regulators”.
This would speed up the approval of AI for use in areas including “legal services, planning assessments and advanced manufacturing”.
The Civil Aviation Authority will set out steps towards launching commercial drone operations which could allow unmanned aerial vehicles to be widely used for tasks from “surveying sites for development to delivering blood supplies for the NHS”.
Panels reviewing company mergers will be reformed to “provide greater certainty on whether transactions will be subject to merger control”.
She also confirmed plans to create simpler corporate reporting rules for more than 100,000 businesses, including removing the need for small business owners to submit lengthy director reports to Companies House.
Tory shadow business secretary Andrew Griffith said it was “laughable to hear Labour talk about scrapping red tape when they have created countless new quangos” and piled “burdens and costs on employers’ shoulders” through business tax hikes.
Mumbai: Shares of InterGlobe Aviation, the parent company of IndiGo Airlines, fell sharply in early trade on Monday, dropping 6.6 per cent to an intra-day low of Rs 5,015 on the BSE.
However, it recovered later as around 9:45 a.m., the shares were trading at Rs 5,159.50, down by Rs 211 or 3.93 per cent.
The sell-off came after the Directorate General of Civil Aviation (DGCA) extended the deadline for IndiGo CEO Pieter Elbers to respond to a show-cause notice linked to the airline’s recent operational disruptions.
The aviation regulator had issued a show-cause notice to IndiGo’s accountable manager on Sunday, just a day after sending a similar notice to CEO Pieter Elbers.
The DGCA said that the airline’s massive wave of cancellations over the past week caused widespread inconvenience and distress to passengers across the country.
According to the regulator, the disruptions were largely triggered by IndiGo’s failure to plan properly for the rollout of the revised Flight Duty Time Limitations (FDTL) rules.
These rules, which lay down the duty hours and mandatory rest periods for flight crew, came into effect recently and have created significant operational challenges for the airline.
In its notice, the DGCA pointed out that IndiGo’s “large-scale operation failures” suggest major lapses in planning, oversight and resource management.
The accountable manager has been given 24 hours to explain why enforcement action should not be taken. If the airline fails to respond within the extended deadline, the DGCA has said it will proceed based on the information available.
Even as the regulatory pressure increases, IndiGo said on Sunday that it has restored 95 per cent of its network and plans to operate around 1,500 flights.
The airline claimed that its operations are on track to stabilise by December 10, with improving on-time performance and fewer cancellations.
However, more than 220 flights had already been cancelled across major airports by the time of reporting, adding to the inconvenience faced by thousands of passengers.
US President Donald Trump has flagged potential concerns over Netflix’s planned $72bn (£54bn) deal to buy Warner Brothers Discovery’s movie studio and popular HBO streaming networks.
At an event in Washington DC on Sunday, he said Netflix has a “big market share” and the firms’ combined size “could be a problem”.
On Friday, the two companies said they had reached an agreement that could bring Warner Brothers’ franchises like Harry Potter and Game of Thrones to Netflix, creating a new media giant.
The planned deal, which has raised concerns among some in the industry, is yet to be approved by competition authorities. The BBC has contacted Warner Brothers, Netflix and the White House for comment.
Launched in 1997 as a postal DVD rental business, Netflix has grown to become the world’s largest subscription streaming service. The deal – the biggest the film industry has seen in a long time – would cement its number one position.
Under the agreement several global entertainment franchises, such as Looney Tunes, The Matrix and Lord of the Rings, would move to Netflix.
The US Justice Department’s competition division, which oversees major mergers, could contend that the deal violates the law if the combined businesses account for too much of the streaming market.
At an event at the John F. Kennedy Center in the US capital, Trump said that Netflix has a “very big market share” which would “go up by a lot” if the deal goes ahead.
Trump added that he would be personally involved in the decision on whether or not to approve the deal and repeatedly highlighted the size of Netflix’s market share.
He also said that Netflix’s co-CEO Ted Sarandos recently visited the Oval Office and praised him for his work at the company.
“I have a lot of respect for him. He’s a great person,” said Trump. “He’s done one of the greatest jobs in the history of movies.”
Mr Sarandos earlier acknowledged that the agreement may have surprised investors but said it was a chance to position Netflix for success in the “decades to come”.
Some in the entertainment industry have criticised the agreement.
The Writers Guild of America’s East and West branches called for the merger to be blocked, saying the “world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent.”
“The outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers and reduce the volume and diversity of content for all viewers,” it said on Friday.
Suranjana TewariAsia Business Correspondent, Tokyo
BBCLast year, more than 18,000 older people living with dementia left their homes and went missing in Japan. Almost 500 were later found dead.
Police say such cases have doubled since 2012.
Elderly people aged 65 and over now make up nearly 30% of Japan’s population – the second-highest proportion in the world after Monaco, according to the World Bank.
The crisis is further compounded by a shrinking workforce and tight limits on foreign workers coming in to provide care.
Japan’s government has identified dementia as one of its most urgent policy challenges, with the Health Ministry estimating that dementia-related health and social care costs will reach 14 trillion yen ($90bn; £67bn) by 2030 – up from nine trillion yen in 2025.
In its most recent strategy, the government has signalled a stronger pivot toward technology to ease the pressure.
Across the country, people are adopting GPS-based systems to keep track of those who go missing.
Some regions offer wearable GPS tags that can alert authorities the moment a person leaves a designated area.
In some towns, convenience-store workers receive real-time notifications – a kind of community safety net that can locate a missing person within hours.
Robot caregivers and AI
Other technologies aim to detect dementia earlier.
Fujitsu’s aiGait uses AI to analyse posture and walking patterns, picking up early signs of dementia – shuffling while walking, slower turns or difficulty standing – generating skeletal outlines clinicians can review during routine check-ups.
“Early detection of age-related diseases is key,” says Hidenori Fujiwara, a Fujitsu spokesperson. “If doctors can use motion-capture data, they can intervene earlier and help people remain active for longer.”
Meanwhile, researchers at Waseda University are developing AIREC, a 150kg humanoid robot designed to be a “future” caregiver.
It can help a person put on socks, scramble eggs and fold laundry. The scientists at Waseda University hope that in the future, AIREC will be able to change adult nappies and prevent bedsores in patients.
Similar robots are already being used in care homes to play music to residents or guide them in simple stretching exercises.
They are also monitoring patients at night – placed under mattresses to track sleep and conditions – and cutting back on the need for humans doing the rounds.
Although humanoid robots are being developed for the near future, Assistant Professor Tamon Miyake says the level of precision and intelligence required will take at last five years before they are safely able to interact with humans.
“It requires full-body sensing and adaptive understanding – how to adjust for each person and situation,” he says.
Emotional support is also part of the innovation drive.
Poketomo, a 12cm tall robot, can be carried around in a bag or can fit into a pocket. It reminds users to take medication, tells you how to prepare in real time for the weather outside and offers conversation for those living alone, which its creators say helps to ease social isolation.
“We’re focusing on social issues… and to use new technology to help solve those problems,” Miho Kagei, development manager from Sharp told the BBC.
While devices and robots offer new ways to assist, human connection remains irreplaceable.
“Robots should supplement, not substitute, human caregivers,” Mr Miyake, the Waseda University scientist said. “While they may take over some tasks, their main role is to assist both caregivers and patients.”
At the Restaurant of Mistaken Orders in Sengawa, Tokyo, founded by Akiko Kanna, people stream in to be served by patients suffering from dementia.
Inspired by her father’s experience with the condition, Ms Kanna wanted a place where people could remain engaged and feel purposeful.
Toshio Morita, one of the café’s servers, uses flowers to remember which table ordered what.
Despite his cognitive decline, Mr Morita enjoys the interaction. For his wife, the café provides respite and helps keep him engaged.
Kanna’s café illustrates why social interventions and community support remain essential. Technology can provide tools and relief, but meaningful engagement and human connection are what truly sustain people living with dementia.
“Honestly? I wanted a little pocket money. I like meeting all sorts of people,” Mr Morita says. “Everyone’s different – that’s what makes it fun.”
Getty ImagesAdditional reporting by Jaltson Akkanath Chummar
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