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Experts reveal which tax increase will have ‘least damaging’ impact

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Experts reveal which tax increase will have ‘least damaging’ impact


The government is under pressure to raise revenues and balance the books ahead of November’s autumn Budget statement.

And new economic analysis has revealed which tax rise will be the better option for Chancellor Rachel Reeves to implement for the economy.

Income tax and VAT were compared.

Raising VAT could push down harder on people’s real incomes, while hiking income tax will be the “least damaging” option.

Analysis carried out by the National Institute of Economic and Social Research (NIESR) suggests that it would be harmful for the Chancellor to find other ways to raise tax revenue beyond the “main” UK taxes.

The economic think tank analysed the economic impact of raising income tax, corporation tax and value added tax (VAT).

Of the three, NIESR said raising VAT would have the biggest negative impact on the UK economy by lowering real personal disposable income (RPDI) by nearly 3 per cent and real gross domestic product (GDP) by nearly 1 per cent in the first year of the tax being applied.

Raising VAT would have the biggest negative impact on the UK economy, a think tank said (PA)

A higher rate of VAT would also push up inflation more than the other levers because of the impact it would have on prices in shops.

Raising corporation tax – which is charged on the profits made by businesses – would have a smaller short-term impact but drag on the economy in the long run by reducing investment, according to the analysis.

On the other hand, hiking income tax would have the lowest impact, bringing down GDP by about 0.05 per cent in the first year after the tax is applied.

The scenarios in NIESR’s analysis are based on the assumption that the government aims to raise total net annual revenue by £30 billion by 2029-30.

This is how much Ms Reeves needs to raise to fill an estimated black hole in the public finances.

NIESR said the “least bad” option therefore was for the Chancellor to increase income tax at her next Budget.

The think tank acknowledged that doing so would mean the Labour government breaks its manifesto pledge not to raise taxes on “working people” – which it said was now widely interpreted to mean income tax, VAT, employee national insurance contributions, and corporation tax.

“We would argue that they could find other ways to raise tax revenue but doing so would be much more distortive, harming the economy in the longer run,” the report’s authors wrote.

Ed Cornforth, NIESR economist and main author of the analysis, said: “Our analysis clearly shows that a rise in income tax is the Chancellor’s least damaging, most reliable option for putting the economy on a sustainable, secure footing.

“VAT would put pressure on prices, an undesirable option given current inflation expectations, and additional business taxes would harm investment incentives, at a time when employer NICs have already dampened business confidence.

“Although it is politically unsavoury, avoiding raising income tax will force the Chancellor’s hand into worse options – tinkering around the edges simply won’t shift the dial.”



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Disney dominated the 2025 box office. Here’s how it could keep the crown in 2026

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Disney dominated the 2025 box office. Here’s how it could keep the crown in 2026


Courtesy of Disney Enterprises Inc.

Blue aliens, a family of superheroes and a city of talking animals boosted the Walt Disney Company to the top of the domestic box office in 2025.

Full-year ticket sales in the United States and Canada rose about 4% from 2024 to $9.05 billion. Disney accounted for the highest share of that haul with $2.49 billion in ticket sales, or 27.5%, according to data from Comscore.

It’s closest competitors were Warner Bros. Discovery, which tallied $1.9 billion domestically, or 21%, and Universal, which took in $1.7 billion, or 19.7%. Together, these three studios accounted for nearly 70% of the domestic box office market share.

No other studio surpassed $1 billion in domestic ticket sales or accounted for more than 7% of the total box office haul.

“[Warner Bros., Disney and Universal] have the advantage of having at least two or more distinct and successful sub-brands labels — such as Marvel under Disney, New Line under WB and Illumination under Universal — under their corporate umbrella that enables these studios to dominate at least in terms of the overall box office and percentage of the marketplace that they control,” said Paul Dergarabedian, head of marketplace trends at Comscore.

Disney’s standout performance came on the backs of already popular intellectual property. Four of its films were part of the top 10 highest-grossing domestic releases of the year, including the live-action remake of “Lilo & Stitch,” a sequel to 2016’s “Zootopia,” another entrant in the Marvel Cinematic Universe with “Fantastic Four: First Steps” and a third “Avatar” film.

“Most years at the box office are dominated by known IP and non-original content; films that have the baked in brand name recognition that theoretically gives those films a leg up in terms of marketing and potential box office success,” Dergarabedian said.

In fact, nine of the 10 biggest movies at the domestic box offices were from existing IP. Warner Bros.’ “Sinners” was the only original title to make the list.

“In 2025 there were some big budget originals that did incredibly well … but lest anyone think that trend is going away, 2026 looks to eclipse 2025 in terms of the number of high-profile sequels and known IP on the slate for the year,” Dergarabedian said.

That’s especially true for Disney.

The studio is set to release its first Star Wars film in theaters since 2019 called “The Mandalorian and Grogu” after the popular characters of its “The Mandalorian” series on Disney+; “Toy Story 5” is will hit theaters in June followed by a live-action “Moana” in July; then the hotly anticipated “Avengers: Doomsday” arrives in December.

A new Spider-Man film will also sling into theaters in 2026, but as part of a deal with Sony to have the character as part of Disney’s MCU, Sony keeps the majority of box office profits while Disney gets merchandise sales.

The box office will also get a boost from Warner Bros.’ “Supergirl” and “Dune: Part Three,” Universal’s “Minions 3,” “The Super Mario Galaxy Movie” and “The Odyssey,” Lionsgate’s “Hunger Games: Sunrise on the Reaping” and Sony’s third “Jumanji” film.

“As we look into 2026, there’s plenty of optimism to go around,” said Shawn Robbins, director of analytics at Fandango and founder of Box Office Theory “The slate is packed with top-tier franchises, some fan-driven and others family-oriented, alongside filmmaker-driven tentpoles … plus an inevitable crop of strong or potentially surprising performers out of horror, comedy, indie, and other genres.”

Disclosure: Versant is the parent company of CNBC and Fandango.



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The one measure that can tell us a lot about the state of the UK economy

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The one measure that can tell us a lot about the state of the UK economy


Faisal IslamEconomics editor

Reuters People walk with shopping bags on Oxford Street during Boxing Day sales, in London.Reuters

Shoppers on Oxford Street during the Boxing Day sales

A new year, a new beginning.

The latest monthly figures on the economy hardly confirm a change of gear, but nor do they back up the worst doom-mongers claiming decline and recession. It is neither doom nor boom, but a new year makes an opportunity to wipe the slate clean on policy, on a sense of certainty, and perhaps above all, the vibes in the economy.

There is one chart that might explain quite a lot about both the state of and the prospects for the UK economy. And it might say a fair bit about the political direction of the UK too.

It is consumer confidence. These are the long-running surveys that essentially put the nation on the economic psychiatric couch. How do you feel about the economy’s prospects? Are you likely to buy a major piece of equipment? How are your personal finances?

There is a solid data source of consistently asked questions going back five decades – it is the measure now called the GfK Consumer Confidence Barometer.

I’ve been reporting on this metric for half of its existence. It’s an imperfect science but the basic idea to reach the net confidence number is the optimism score minus the pessimism score.

The patterns then were interesting and consistent. And it was important as a predictor for those in power to stay in power. “It’s the Economy Stupid”, remember.

But has something significant changed in the water? This chart is quite extraordinary and a version of it has been circulated at the top of government.

A quick narration is in order.

This chart breaks down the headline net confidence number by age cohort.

Broadly speaking they used to move together, they were “correlated”.

Younger people have a generally sunnier starting point but that dims as they age – not a great surprise – and all age groups react to events similarly.

Over the past decade you can see correlated declines in consumer confidence across all age groups in reaction to the post-Brexit vote era and the impact of the pandemic.

The clear impact of the Russia-Ukraine war and the extraordinary rise in energy prices can be seen.

An interesting takeaway is how devastating the Liz Truss mini-budget in 2022 was for all age groups. A loss of confidence in the 45-day government and in economic prospects.

And up until 2024 all those lines move in tandem.

But what happens in late 2024? Divergence. Big time.

The under-50s’ consumer confidence goes higher, and soars for the under-30s to highs not seen since Brexit.

But take a look at the bottom two red lines. Over-50s’ and over-60s’ consumer confidence collapses toward Truss-era levels.

How can it be that the over 50s, and pensioners in particular, are living through another collapse in economic confidence, and yet the young adult population is much more positive?

Well the dotted line is the 2024 General Election. And while correlation does not mean causation, that is when this age-related break occurs.

Votes affecting vibes

A possible explanation from political economy is this – the flow of causality from economic sentiment to political sentiment has reversed.

Where how you felt about your finances influenced how you voted, now how you voted influences how you feel about your finances and the economic outlook for the country.

Young people broadly on the liberal left are now happier after enduring a rolling series of crises so far this decade, and with a government they largely voted for in 2024.

The older, who voted Conservative and Reform predominantly, are unhappy and unconvinced. They think the country has gone to the dogs even more than usual.

One possible factor is the tone set by social media and the emotive doom-scrolling and rage magnets embodied in their algorithms. Is this demographic seeing the Mad Max-style dystopia presented on their social media feeds and responding with this negative outlook?

There is also some evidence in the US of respondents to one consumer sentiment survey exhibiting a political tint on their sense of economic confidence. In the transition between the Donald Trump and Joe Biden administrations at the end of 2020, Democrats respondents’ economic confidence surged from 67 to 96, while Republicans’ crashed from 100 to 59.

The Biden administration then bemoaned what staffers called the “Vibecession” – the subsequent sense of economic malaise not really reflected in good economic numbers.

Rates a double-edged sword

There are other economic factors at play.

This rebound in confidence for the young coincides with when the Bank of England started cutting interest rates. Rate cuts are good for young home seekers and jobseekers, but bad for older savers.

There are significant economic consequences if this picture is correct too.

It might help explain the curiously high and nearly double-digit UK savings rate. That looks like a pandemic-style aberration. Older Britain is sat on its savings, despondent about the country and the economy, refusing to spend its money and weighing down GDP, even as pay rises for workers remain higher on average than the rate of inflation.

The takeaways from this chart are also well-reflected in the early financial results we are getting from businesses.

Many retail results have defied the gloom. Some bosses that complain the most about National Insurance rises seem to be reporting healthy sales and profits having basically paid for the tax.

Pub chain Mitchells & Butlers “traded very strongly across the festive season with like-for-like growth of 7.7%”. Fullers had an “outstanding five-week Christmas and New Year season across all parts of the estate”, 8% up on an already strong festive period last year.

Obviously challenges remain in the level of price rises. But inflation is on its way down to the 2% target, with a conscious attempt from government to limit regulated price rises for rail and water.

More rate cuts will come slowly, and the impact of previous cuts will also filter into the household sector.

A mortgage price war may be on its way to help a housing market rebound after months of Budget uncertainty.

The government will hope to draw a line under a tumultuous 2025, with what they hope is an investment boom typified by recent announcements on Heathrow and on a new northern train line.

So there’s a platform to defy the doom. But could people’s now politically charged perceptions of economic confidence be a brake on all that?



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ICICI Bank Q3 Net Profit Falls 4 Percent to Rs 11317.86 Crore

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ICICI Bank Q3 Net Profit Falls 4 Percent to Rs 11317.86 Crore


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ICICI Bank’s interest income stands at Rs 41,966 crore in Q3 FY26, reflecting a 1.6% year-on-year increase from Rs 41,300 crore in the same quarter last year.

ICICI Bank Q3 Results.

ICICI Bank Q3 Results.

Private sector lender ICICI Bank on Saturday reported a 4.02 per cent fall in its standalone net profit to Rs 11,317.86 crore for the third quarter ended December 31, 2025. Its net profit had stood at Rs 11,792.42 crore in the corresponding period last year, according to a regulatory filing.

The lender reported interest income of Rs 41,966 crore in Q3 FY26, reflecting a 1.6% year-on-year increase from Rs 41,300 crore in the same quarter last year. Interest expenses declined 4.3% to Rs 20,034 crore during the quarter, compared with Rs 20,929 crore in the year-ago period.

Operating expenses increased 13.2% year-on-year to Rs 11,944 crore from Rs 10,552 crore. The bank said this figure includes Rs 145 crore of estimated provisions made in line with the new Labour Codes. The quarter was also impacted by treasury performance, with the bank posting a treasury loss of Rs 157 crore, compared with a gain of Rs 371 crore in Q3 FY25.

Core operating profit rose 6.0% year-on-year to Rs 17,513 crore in Q3 FY26, driven by steady growth in net interest income and fee-based income. Net interest income increased 7.7% year-on-year to Rs 21,932 crore, supported by loan expansion and stable margins.

Asset quality showed marginal improvement during the quarter. The gross NPA ratio declined to 1.53% as of December 31, 2025, from 1.58% at September 30, 2025 and 1.96% a year earlier. The net NPA ratio eased to 0.37% at end-December 2025, compared with 0.39% in the preceding quarter and 0.42% at December 31, 2024.

Provisions, excluding tax-related provisions, rose to Rs 2,556 crore in Q3 FY26 from Rs 1,227 crore in Q3 FY25. The bank said this included an additional standard asset provision of Rs 1,283 crore, made following the Reserve Bank of India’s annual supervisory review, relating to a portfolio of agricultural priority sector loans that were found to be not fully compliant with regulatory norms.

The domestic loan book expanded 11.5% year-on-year to Rs 14,30,895 crore as of December 31, 2025. Including profits for the nine months ended December 31, 2025, the bank said its total capital adequacy ratio stood at 17.34%, while the CET-1 ratio was 16.46% on a standalone basis at end-December 2025.

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