6:52 am, October 31, 2024
UK economic growth upgraded this year amid ‘temporary boost’ from spending
The UK economy is set to grow more than expected this year and next year partly due to a boost from the chancellor’s significant Budget spending plans, the government’s official forecaster has said.
However, the fiscal watchdog also reduced its economic growth projections for the longer-term as the government increased tax measures. The Office for Budget Responsibility (OBR) has predicted that UK gross domestic product (GDP) will grow by 1.1% in 2024.
This reflects an upgrade on its previous forecast of 0.8% and is stronger than recent projections by the Organisation for Economic Co-operation and Development (OECD) and International Monetary Fund (IMF).
Firms ‘set to pass on most of higher tax costs to employees through lower wages’
Employees are expected to bear the brunt of higher tax costs on businesses, with an increase to employer national insurance “highly likely” to hit jobs and feed through in lower wages, according to the government’s official forecaster.
Analysis from the Office for Budget Responsibility (OBR) found that greater employer national insurance (NI) contributions are forecast to have an indirect impact on jobs and wages. The OBR said it assumes that firms will ‘pass on most but not all of their higher tax costs to employees’.
In the 2025 to 2026 tax year, the year the changes are introduced, it estimates that businesses will pass on 60% of the higher costs to workers and consumers, via lower wages and higher prices.
Latest Skoda Kodiaq gains performance vRS version
Skoda has added a new vRS variant to its second-generation Kodiaq range.
The new vRS arrives with a turbocharged 2.0-litre petrol engine with 261bhp – 20bhp more than the older performance Kodiaq – driving all four wheels for better traction in poor and slippery conditions. Other performance upgrades include two-piston brake callipers on the front axle to bring improved stopping power, while ventilated discs can be found on all four wheels. All versions get a seven-speed DSG automatic gearbox as standard, too.
The new car gets a bodykit and an assortment of sporty styling features inside and out. Prices and specifications will be announced shortly.
The markets
The FTSE 100 closed firmly in the red despite the autumn Budget boosting some UK-focused firms who are hoping for a boost from the government’s spending plans. The FTSE 100 finished 59.98 points, or 0.73%, lower to end the day at 8,159.63, while the the FTSE 250 closed 0.35% higher for the session.
In continental Europe, the Cac 40 ended 1.1 % lower for the day and the Dax index was down 1.13%. Stateside, the main markets were slightly lower, with pharmaceutical giant Eli Lilly among the major fallers.
The pound was down 0.13% at 1.299 US dollars and down 0.5% at 1.196 euro.
Budget contains broken promises which will hit working people, Sunak claims
Rishi Sunak has accused Rachel Reeves of delivering a Budget containing ‘broken promise after broken promise’, adding: ‘Working people will pay the price.’
Sunak said the Conservatives had repeatedly warned during the general election that Sir Keir and Reeves were ‘not telling the truth’ when ruling out ‘tax surprises’.
Sunak went on to claim Labour would be taxing people’s job, business, home and savings, adding: ‘You name it, they will tax it and that is exactly what they have done.’
Impact of inheritance tax on farmers slammed
Farmers have been dealt a ‘potentially killer blow’ in the Budget, a DUP MP has claimed.
Chancellor Rachel Reeves announced a reform on inheritance taxes applied to farms during Wednesday’s Budget announcement. She said from April 2026, the first £1m of combined business and agricultural assets will continue to attract no inheritance tax. But for assets over £1m, inheritance tax will apply with 50% relief, at an effective rate of 20%.
DUP MP Carla Lockhart said UK farming unions had warned government of the impact that weakening Agricultural Property Relief would have. She said family farms could be broken up if they are forced to sell land to pay the cost of passing the farm to the next generation.
Wednesday on Car Dealer
Budget: First year tax rates for petrol, diesel and hybrids will DOUBLE – but EV rates to remain the same
New VED rates will double for petrol, diesel, and hybrid vehicles, widening the tax gap between high-pollution cars and EVs. EV buyers will pay only £10 in the first year, while higher charges apply to conventional vehicles and hybrids.
‘Chaos’: Car finance grinding to a halt in wake of Court of Appeal decision – but what happens next?
In the wake of the Court of Appeal decision around car finance, lenders are scrambling to update procedures, with major players pausing payouts. Dealers warn of financial strain as delays impact sales nationwide.
Group 1 bosses ‘excited’ about expanded UK arm as firm reveals £655m third quarter profits
Group 1 is expanding its UK operations, adding 58 dealerships from Inchcape and expecting $2.7bn (£2bn) annual revenue. With UK sales comprising 26% of Group 1’s total, they’re focused on efficient integration, led by new CEO Mark Raban.
FCA chief executive calls for clarity over motor finance judgement
FCA CEO Nikhil Rathi called for clarity on motor finance following a Court of Appeal decision affecting car dealer finance commissions. While lenders plan to appeal, Rathi emphasised the need for fair customer treatment and continued market functionality, engaging closely with the sector and government.
Aston Martin narrowed losses by 90% and boosted volumes in third quarter
Aston Martin reduced Q3 pre-tax losses by 90% to £12.2m, with a 14% rise in wholesale volumes. Despite 2023’s overall sales lag and supply chain challenges, new models boosted growth, with plans for cost control and increased profitability ahead.
Over 1,000 Ford UK workers go on strike in long-running row over pay
Over 1,000 Ford office staff went on strike over performance-related pay and contract changes. Unite members demand a permanent pay raise, rejecting Ford’s one-off 2024 payment and 2025 performance-based pay. Strikes may intensify if no agreement is reached.
Landmark Court of Appeal ruling on car finance was ‘very unexpected’
A Court of Appeal ruling mandates car dealers disclose finance commission details to customers, surprising the finance industry. Major lenders paused lending to implement changes, while the Finance and Leasing Association supports increased transparency, seeing it as essential for consumer trust.
Weather
A dry day with sunny spells and variable cloud for most, reports BBC Weather, while western Scotland and Northern Ireland will have drizzle. Temperatures will be around 16 degrees.
Just like today, tonight will be a night of two halves. Central and southern areas will be dry with patches of cloud and fog, while further north there will be rain.
