Business
All work and no pay: US govt shutdown hits federal workers; forced to apply for loans to meet daily needs – The Times of India
US federal workers have begun to feel the heat of government shutdown as it enters its second week, as many have resorted to even taking loans to cover everyday expenses. Since October 1, hundreds of thousands of federal employees have been furloughed, while others deemed essential, including some military personnel, must work without pay.All work and no pay“We kind of feel like we’re like a bargaining chip to an extent,” a long-serving US Air Force employee told AFP. “We’re not getting paid because people in DC who are getting paid can’t get on the same page.”“Not only are we working without pay, we’re actually doing more without pay, because our civilian teammates have all gone home on furlough,” he added. “That’s not good for troop morale.”The first grave signs of the shutdown’s impact will be felt next week, when federal employees start seeing their paychecks affected. If no deal is reached by the end of the month, they could receive nothing in the following paycheck.“It’s very stressful,” said Marilyn Richards, a 46-year-old Air Force and Navy veteran in Missouri, who has been furloughed from her administrative support role at a federal agency.Richards, the main breadwinner in her household, explained the financial pressure the shutdown is causing. “For most of us who live paycheck to paycheck, you’re counting on your next paycheck to continue to keep the lights on,” she told AFP. “And that’s what I do.”‘Bridging the gap’The uncertainty caused by the shutdown has led some federal workers to turn to credit unions offering paycheck protection programmes.The Navy Federal Credit Union, which provided around 19,000 loans totalling more than $50 million during the 2018-2019 shutdown, has already begun seeing applications this time, according to a spokesperson.These loans help federal workers get through a few weeks without pay and ‘bridge the gap’ until the shutdown ends and back pay is received, Haleigh Laverty, a spokesperson for the Defense Credit Union Council, told AFP.Many credit unions are offering short-term, interest-free loans of a few thousand dollars for periods ranging from 90 days to six months. This support helps protect both employees and their credit scores.Among them is the Cobalt Credit Union in Nebraska, which serves around 120,000 members connected to Offutt Air Force Base, home to the US Strategic Command.“We still have active duty and a lot of essential positions on the base that have to report due to missions all over the world,” Cobalt Credit Union president and CEO Robin Larson said. The union has helped thousands through past shutdowns and has already received multiple loan applications since October 1.Struggle with mortgage While federal workers are hardest hit, the shutdown could also affect the private sector. Mortgage brokers warn that lending may slow down, and crucial services like flood insurance could be disrupted in coastal areas, forcing borrowers to turn to costlier private options.Alex St Pierre, a mortgage broker in Charleston, South Carolina, explained that government workers looking for a mortgage face additional pressures, including the threat of dismissal and delays to identity verification checks while their departments are closed.
Kevin PeacheyCost of living correspondent
Getty ImagesThe debate around stamp duty is intensifying. When Kemi Badenoch said a future Conservative government would abolish it on the purchase of main homes, it went down well at the Tory Party conference.
There has also been speculation that the Chancellor, Rachel Reeves, is considering replacing it.
Scrapping stamp duty would be popular among some home buyers, including first-time buyers. There’s been widespread support in the housing sector as well as among some independent economists.
Analysts say there would be some significant consequences of scrapping stamp duty for primary residences, affecting buyers, sellers and the wider UK economy.
1. House prices might rise
Whenever there has been a temporary easing of stamp duty, such as in the immediate aftermath of the Covid lockdowns, house prices have then risen.
It is more difficult to judge whether a permanent abolition would have the same long-term impact on prices as the short-term sweetener of a stamp duty holiday.
However, greater demand is likely to feed through to asking prices.
“If, and this is a big if, it is a simple tax giveaway, the likelihood is that the current stamp duty bill simply passes through into prices,” says Lucian Cook, head of residential research at Savills.
In turn, that could mean first-time buyers paying less in stamp duty, but having to find a bigger deposit.
“Given the way stamp duty works, this would be unevenly distributed across the country,” Mr Cook added.
The most obvious point here is that the government in Westminster can only control stamp duty in England and Northern Ireland. Scotland and Wales have their own land and transaction taxes overseen by the devolved administrations.
2. Tax cut for wealthy
A swathe of first-time buyers do not pay stamp duty. That’s because, in England and Northern Ireland, they are exempt when buying properties of up to £300,000.
“For them, the enormous challenge is raising a deposit,” says Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown.
Data from property portal Rightmove suggests that 40% of homes for sale in England are stamp duty free for first-time buyers.
While the vast majority of movers pay stamp duty, the rate increases at certain price thresholds.
So, the bigger the home, the bigger the benefit, if stamp duty was scrapped.
This will also mean a big regional difference in the impact of such a policy.
At the moment, 76% of properties on sale in the North East of England are free of stamp duty for first-time buyers, according to Rightmove’s figures. In London, it is only 11%.
Richard Donnell, from Zoopla, points out that 60% of all stamp duty is paid in southern England – so the majority of the benefit of abolition would be felt in the south.
3. Easier to find somewhere to move to
One of the great selling points of stamp duty abolition is the extra mobility it should provide for workers, buyers, sellers and downsizers, according to experts.
“Homeownership is the foundation of a fairer and more secure society – but stamp duty has denied that opportunity to too many for too long,” says Paula Higgins, chief executive of the Homeowners Alliance.
“Our research shows over 800,000 homeowners have shelved moving plans in the past two years, and stamp duty is a major barrier.”
The Institute for Fiscal Studies (IFS), an independent economic think tank, describes stamp duty as “one of the most econmically damaging taxes”. In its most recent analysis, it says particular winners will be those who want to move frequently, to more or less expensive homes.
It should, for example, clear an obstacle for older homeowners, who want to sell a family home but are discouraged by stamp duty. If they are more likely to move, then their homes become available to younger families and the whole market becomes more fluid.
However, others suggest the influence of stamp duty could be overblown.
“Take someone downsizing, from a £750,000 property to a £300,000 one. In England and Northern Ireland, they’d pay £5,000 in stamp duty. It’s a fraction of what they’re likely to pay in estate agency fees, and sits along a huge range of costs from conveyancing to removals,” Ms Coles from Hargreaves Lansdown says.
“It begs the question of whether removing the cost of the tax is a gamechanger.”
4. Potential tax rises elsewhere
Stamp duty raises a lot of money for the Treasury, so scrapping it would leave a gap in the public finances.
The IFS said that the direct cost of the Conservative policy might be around £10.5bn to £11bn in 2029-30, although the Tories’ own estimate is about £9bn.
The question for any administration tempted to scrap or reduce stamp duty is how else it finds the money.
The Conservatives say they will make savings elsewhere. They also say the policy will boost growth and the housing sector in general, and therefore bring in more tax receipts.
The other option is to raise other taxes. As some analysts have said, the main consideration is not what is scrapped, but what replaces it.
5. Impact on renters
The idea of scrapping stamp duty for primary residences will benefit homeowners but could end up meaning less choice for renters.
The IFS suggests it could discourage the purchase of rental properties by landlords, as they would still have to pay stamp duty.
The think tank says it would increase the more favourable tax treatment of owner-occupation relative to renting.
New Delhi: With the World Bank forecasting a mere 2.6 per cent GDP growth for Pakistan in 2025-26, the country appears to be stuck in a phase of economic stagnation that has now entered the fifth year of sub-3 per cent growth with mounting unemployment and rising poverty.
Pakistan risks locking itself into a prolonged phase of economic stagnation, warned economist Asad Ali Shah, as the World Bank’s latest update projects growth at just 2.6 per cent for FY25-26 – following a dismal four-year stretch of weak performance, according to an article in Pakistan’s financial daily Business Recorder (brecorder.com).
Expressing his views on the social media platform X, Asad, the former president of the Institute of Chartered Accountants Pakistan (ICAP), said: “The World Bank’s latest Pakistan Development Update has revised down the FY25-26 growth forecast to just 2.6 per cent, compared to the government’s more optimistic projection of around 4 per cent.”
“This comes after three years of dismal performance — (-) 0.2 per cent in FY23, 2.5 per cent in FY24, and 2.7 per cent in FY25 — marking what is arguably the worst four-year stretch in Pakistan’s economic history, defined by sustained low growth, record inflation and interest rates, and a collapse in investment confidence.”
Pakistan’s economy has been further hit by catastrophic floods, weighing on agricultural output, and inflation pressures have resurfaced, the article states. The report further noted that Pakistan’s inflation rate dropped to single digits in FY 2024/25, as price increases for food and energy eased. “However, disruption to food supply chains, due to ongoing catastrophic floods, is expected to push inflation up through 2027,” it projected.
Former Federal Finance Minister Miftah Ismail also echoed similar views, saying that “in terms of growth, these FY22-23 to FY25-26 are the worst four years in Pakistan’s history”. Miftah criticised the government for avoiding key reforms, including privatisation, downsizing ministries, and strengthening local governance, arguing that authorities are instead “purchasing stability through low growth” by keeping interest rates, taxes, and utility tariffs high.
“The result is: increased unemployment, poverty and political alienation.” Meanwhile, Asad maintained that Pakistan’s economy “may have stabilised — but it has not recovered”. The economist pointed out that industrial output remains weak, whereas “agriculture is in deep crisis amid climate shocks and policy distortions, and job creation has stalled”.
“Stability is not success,” he stressed, warning that without credible reforms to restore investor confidence, strengthen governance, and shift resources toward productivity and exports, Pakistan risks institutionalising stagnation as its new normal”.
Jaguar Land Rover has begun restarting Range Rover production lines in Solihull, aiming for all its manufacturing sites to be fully operational by the end of next week, following a major cyber attack that halted operations.
Employees returned to the Solihull plant in the West Midlands on Thursday, after a phased production restart began on Wednesday. Operations had been suspended for more than a month following the significant hack.
The remaining Solihull lines, which produce the Range Rover Velar SUV and Jaguar F Pace models, are set to resume next Monday. Vehicle manufacturing at Halewood, Merseyside, will also restart then.
Overseas factories in Pune, India, and Brazil are scheduled to follow later next week, marking the final sites to recommence operations, the group confirmed.
JLR global manufacturing director Luis Vara said on Wednesday there was a “strong sense of unity and momentum” among production workers. Staff had been working from home since the firm’s systems were compromised on August 31.
The cyber attack occurred at a particularly crucial time for car firms, as September traditionally boosts demand for new vehicles with the release of the latest registration plates.
The incident also caused significant disruption to the firm’s global operations, with suppliers being left in limbo as production froze.
On Monday, JLR revealed a sharp drop in sales over recent months following the cyber incident, adding it had been a “challenging quarter” as it also grappled with the impact of higher US tariffs.
Sales fell by 17.1 per cent to 85,495 units between July and September, compared with the same period a year ago, with UK sales dropping by nearly a third.
The volume of wholesales tumbled by 24.2 per cent year on year to 66,165 units.
JLR said this partly reflected the production freeze since the start of September.
The group’s production restart began with its engine plant in Wolverhampton and its battery assembly centre in Coleshill, Birmingham, on Wednesday.
It also restarted stamping operations in Castle Bromwich, Halewood in Merseyside, and Solihull, on Wednesday, together with key areas of its Solihull vehicle production plant, such as its body shop, paint shop and its logistics operations centre.
This was followed by operations at its vehicle manufacturing facility in Nitra, Slovakia.
Mr Vara said on Wednesday: “There is a strong sense of unity and momentum as we get back to doing what we do best, building quality luxury vehicles for our customers.”
The firm has the largest supply chain in the UK automotive sector, which employs around 120,000 people and is largely made up of small and medium-sized businesses.
The Government recently announced it would underwrite a £1.5 billion loan guarantee to JLR to give suppliers some certainty over payments, helping bolster JLR’s cash reserves, but calls mounted for more to be done.
JLR said on Tuesday that its extended support package would see suppliers paid much faster than under the usual payment terms, by as much as 120 days early.
It will start with qualifying JLR suppliers seen as critical to the restart of production, then will be expanded to cover some non-production suppliers who have also been affected.
JLR also vowed to pay back financing costs for those JLR suppliers who use the scheme during the restart phase.
A raft of other businesses have been hit by major cyber attacks in recent months, including beer giant Asahi, high street retailer Marks & Spencer and nursery group Kido Schools.
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