Business
UK borrowing costs hit 27-year high adding to pressure on Reeves
Tom Espiner & Nick EdserBusiness reporters, BBC News
ReutersUK government borrowing costs have reached their highest level since 1998, adding to the pressure on the chancellor ahead of the Budget.
The interest rate on 30-year government bonds, known as the yield, jumped to 5.698%, making it more expensive for the government to borrow money.
There are rising expectations that Chancellor Rachel Reeves will increase taxes in the Budget later this year in order to meet her borrowing and spending rules, as worries grow about the state of the government’s finances.
On the currency markets, the pound also fell more than 1% against the dollar on Tuesday.
Sterling dropped to $1.3379, which is the lowest level against the US currency since 7 August.
The UK was not alone in seeing borrowing costs rise, with yields on 30-year German, French and Dutch bonds climbing to their highest 2011.
A number of factors have led to borrowing costs for governments around the globe to go up, such as geopolitical tensions, US President Donald Trump’s trade policies and the upcoming confidence vote in the French government.
‘Difficult choices’
But Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the chancellor faced “highly difficult choices” in the Budget and that she had been “dealt a warning” by investors.
“They are selling off UK government debt, clearly concerned that the government may be losing its grip on the public finances,” she said.
In its manifesto, Labour promised not to raise taxes such as income tax, VAT or national insurance on “working people”. This has led to much speculation over what taxes Reeves could raise in the autumn Budget.
One option suggested is that the freeze on income tax thresholds, which is due to end in 2028, could be extended.
Often referred to as a “stealth tax”, freezing income tax thresholds means that, over time as salaries rise, more people are dragged into paying higher rates.
There have also been reports that Reeves is considering reforming property taxes.
“With so many options for raising taxes being bandied about during the summer, there appears to be concern that the decisions made might not be sufficiently thought through,” said Ms Streeter.
“The worry isn’t just that government coffers won’t be replenished, but that they will be filled at the expense of growth, leading to a vicious circle emerging.”
On Monday, the government announced a partial reshuffle, with Darren Jones, formerly Reeves’s deputy, being given a key No 10 role by the prime minister.
The changes are focused on beefing up the economic know-how in Downing Street. Baroness Shafik, a former deputy governor of the Bank of England, has been named at Keir Starmer’s new chief economic adviser.
The moves are a recognition that the upcoming autumn’s Budget will be a defining moment in this Labour government.
Governments borrow money from investors by selling bonds – which is a loan the government promises to pay back at the end of an agreed time.
The yield on 30-year UK government bonds – known as gilts – has been rising for some months, and this makes it more expensive for the government to borrow money due to higher interest payments.
The government’s official forecaster, the Office for Budget Responsibility (OBR), takes borrowing costs into account when looking at whether the chancellor is meeting her self-imposed fiscal rules.
When she became chancellor, Reeves set out two rules on government borrowing, which she has repeatedly said are “non-negotiable”. These were:
- day-to-day government costs will be paid for by tax income, rather than borrowing by 2029-30
- to get debt falling as a share of national income by the end of this parliament in 2029-30
Part of the reason Reeves is under pressure is that her financial buffer to stick to these rules is a relatively slim £10bn. The chancellor recently refused to rule out tax rises after disappointing data on economic growth.
On Tuesday, a spokesperson for Starmer said the government’s “iron-clad commitment to our robust fiscal rules remains”, adding it had made the necessary decisions to “stabilise the public finances”.
But shadow chancellor Mel Stride said the latest market movements were “another economic disaster from Rachel Reeves – and a clear vote of no confidence in Labour from the markets”.
“With more tax rises on the horizon, the economy is now in a precarious position,” he added.
There has been a wide range of forecasts for how much money Reeves might need to raise in the Budget to meet her rules.
One factor that will influence this is the borrowing costs facing the government.
When the OBR makes makes its forecasts for government debt it looks at yields on all bonds.
Paul Dales, chief UK economist at Capital Economics, said concerns about the path of UK inflation and interest rates, combined with global issues, were pushing UK government borrowing costs up.
In addition, he added that pension funds were also not buying as much long-term government debt due to the change in recent years from defined-benefit to defined-contribution schemes.
Mr Dales said Reeves would have to raise between £18bn and £28bn in the Budget to avoid breaking her fiscal rules, and to maintain her £10bn buffer.
Households and banks “will probably feel the brunt of the higher taxes”, he said.
Finance Minister Senator Muhammad Aurangzeb met with Turkey’s Minister of Treasury and Finance, Mehmet Şimşek, in Washington, DC, where both sides acknowledged the ongoing high-level engagements between the leadership of Pakistan and Turkey.
During his visit to the United States, the two ministers reaffirmed their shared commitment to further strengthening the longstanding brotherly relations between the two countries.
Finance Minister Aurangzeb briefed his Turkish counterpart on Pakistan’s ongoing economic reforms, highlighting initiatives in areas such as tax policy, energy, state-owned enterprises, privatization, and public finance.
He also shared details about the Federal Board of Revenue’s (FBR) reform journey, which was recently presented at a World Bank event, and Pakistan’s efforts to improve its tax-to-GDP ratio.
Aurangzeb discussed the country’s progress in integrating data across government departments to enhance financial management, transparency, and accountability.
Separately, the Finance Minister held a meeting with International Finance Corporation (IFC) Managing Director Makhtar Diop.
He expressed gratitude to the IFC for designating Pakistan as a regional hub under its recent organizational restructuring, describing the recognition as a reflection of growing global confidence in Pakistan’s economy.
Aurangzeb also briefed Makhtar Diop on developments in the Reko Diq mining project and expressed hope that the EXIM Bank would soon join the venture.
He appreciated IFC’s support in financial inclusion and digital payment rights projects at the grassroots level.
Furthermore, he acknowledged IFC’s advisory contributions in the sectors of pharmaceuticals, electric vehicles, and commodity exchanges.
The minister welcomed the IFC Managing Director’s plan to visit Pakistan during the upcoming Spring Meetings.
On this occasion, both Aurangzeb and Makhtar Diop also participated in a signing ceremony for a swap agreement between the State Bank of Pakistan and the IFC.
Business
Dhanteras shopping: High price tags didn’t dim gold’s shine – Here’s what drew in consumers – The Times of India
High gold and silver prices had little effect on festive shopping this Dhanteras, with sales matching last year’s volumes and rising by more than 25% in value.Shoppers across the country flocked to stores to buy coins and lightweight jewellery, driven by hopes that prices will keep climbing.
Industry executives said gold and silver coins were the top choice for many buyers this year as people saw them as a smart investment and a way to avoid the higher making charges on jewellery. Ten-gram, 24-carat gold coins, priced at around Rs 1.40 lakh each, were especially popular, according to ET.Jewellery sales were led by lightweight pieces in 22- and 18-carat gold, while younger customers opted for more affordable 9- and 14-carat options.Surendra Mehta, national secretary of India Bullion & Jewellers Association said, “There was a good rush, with queues in Mumbai’s Zaveri Bazar to buy gold and silver coins. The trend from Saturday morning indicates trade will be able to achieve gold volumes of the previous Dhanteras.”Many shoppers had earlier postponed purchases, expecting prices to fall. But with no sign of a correction and indicators pointing to new highs, demand surged. “Now that there is no sign of a correction in prices and all economic indicators are pointing towards fresh highs, people have come out to purchase gold,” Colin Shah, managing director, Kama Jewelry, told ET.Jewellers also noticed growing interest from investors. “Despite record high gold prices, we are witnessing renewed enthusiasm this festive season. Consumers are viewing price volatility as a strategic opportunity to reinvest — whether through gold coins or by upgrading jewellery,” said Ajoy Chawla, CEO of Tanishq.Last year, India sold 39 tonnes of gold on Dhanteras. This year, the Muhurat spans two days, 18 and 19 October. Gold and silver were sold at Friday’s closing prices of Rs 1,34,800 per 10 gm and Rs 1,74,306 per kg, respectively, plus 3% GST, ET reported.Prices have risen sharply over the past year, with gold up 65% and silver up 81% since the last Dhanteras. Retailers in many areas even ran short of coins as demand exceeded expectations. “The trend shows that we will surpass last year Dhanteras sales both by volume and value,” said Baby George, CEO of Joyalukkas.Southern India, which accounts for over 40% of the country’s annual gold consumption of 800–850 tonnes, remained the largest market. But strong coin demand was seen across the country, showing how consumers are adapting their buying patterns in response to price trends.
Last Updated:
CBIC extends GSTR-3B filing deadline to October 25, 2025 after BCAS requests relief due to Diwali. The move eases compliance for GST taxpayers and professionals across India.
Taxpayers under GST can’t claim ITC or file GSTR-1 properly if GSTR-3B isn’t filled.
GSTR-3B Filing Due Date Extended: The Central Board of Indirect Taxes and Customs (CBIC) has extended the form GSTR-3B filing deadline to October 25, 2025, for both monthly and quarterly filers, providing much-needed relief to taxpayers due to the Diwali festival.
Every registered taxpayer under GST requires to file GSTR-3B, which is a self-declaration return summarizing all outward and inward supplies (sales and purchases) and pay the GST liability for the month/quarter.
Usually, taxpayer have to file the form GSTR-3B on or before the 20th of each month. While small taxpayers who have turnover less than 5 crore have a leverage to opt for quarterly return filing (QRMP), hence filing GSTR-3B quarterly.
The much-needed relaxation comes after the Bombay Chartered Accountant Society (BCAS) asked the Ministry of Finance to extend the due date for filing GSTR-3B returns for September 30 due to the clash with the Diwali festival.
BCAS’s representation in the letter wrote to the Finance Ministry that “the standard statutory due date for furnishing the return is 20th October 2025. The same falls immediately after Sunday, 19th October 2025. Furthermore, the period encompassing 20th October 2025 to 23rd October 2025 coincides directly with the primary days of the Diwali festival, which is observed as a significant public holiday cluster across the country.”
The preparation and finalization of FORM GSTR-3B necessarily involves substantial preparatory work, including reconciliation, data entry, review of Input Tax Credit (ITC) eligibility (often dependent on GSTR-2B generation after the 14th of the month), and fund arrangement for tax payment. Given that the entire period from October 19, 2025, onwards is dedicated to Diwali, professionals, accountants, and company personnel are severely impacted, making the effective compliance window extremely restrictive, if not practically non-existent, BCAS added in the letter.
“Therefore, as a significant step towards ease of doing business, it is earnestly requested that the due date for filing GSTR-3B of September 2025 be extended. Granting this essential administrative relief will enable registered persons and tax practitioners to complete the necessary compliance procedures following the conclusion of the festival period, ensuring accurate and complete return filing and promoting adherence to the provisions of the CGST Act without penalizing taxpayers for unavoidable circumstances,” BCAS concluded.
Why Is It Important To File GSTR-3B?
Taxpayers under GST can’t claim ITC or file GSTR-1 properly if GSTR-3B isn’t filled.
If you file GSTR-3B after the due date, you have to pay a late fee (fixed per day).
As per GST rules:
- Rs 50 per day → if you have any tax liability (Rs 25 CGST + Rs 25 SGST).
- Rs 20 per day → if you have no tax liability (nil return) (Rs 10 CGST + Rs 10 SGST).
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
October 19, 2025, 09:00 IST
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