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UK bond yields fall after chancellor’s tax comments<\/p>\n
UK government borrowing costs have dropped today, after chancellor Rachel Reeves<\/a> indicated she could raise taxes in the budget.<\/p>\n The yield, or interest rate, on 10-year UK gilts has dropped by 4 basis points to 4.54%, down from 4.58% last night.<\/p>\n Longer-dated borrowing costs are also lower, with the yield on 30-year gilts dropping by 3 basis points to 5.35%.<\/p>\n Yields, which measure the rate of return on a bond, fall when bond prices rise in the markets.<\/p>\n Bond traders will have noted Reeves\u2019s comments to Sky News<\/a> that \u201cOf course, we\u2019re looking at tax and spending as well,\u201d when explaining her approach to closing UK\u2019s fiscal black hole in her November budget.<\/p>\n Those comments could reassure the City that the government really is committed to sticking to its fiscal rules, rather than allowing borrowing to rise even higher than planned\u2026<\/p>\n Share<\/a>Chip giant ASML warns of China slowdown<\/p>\n Semiconductor firm ASML is continuing to benefit from the AI boom, but also expects a significant fall in demand from China next year.<\/p>\n ASML, which makes machines which make chips, has reported a small slowdown in sales in the last quarter this morning. It posted total net sales of \u20ac7.5bn in the third quarter of this year, down from nearly \u20ac7.7bn in Q2.<\/p>\n ASML told shareholders:<\/p>\n \u201cOn the market side, we have seen continued positive momentum around investments in AI, and have also seen this extending to more customers, both in leading-edge Logic and advanced DRAM. On the other hand, we expect China customer demand, and therefore our China total net sales in 2026, to decline significantly compared to our very strong business there in 2024 and 2025.<\/p>\n Overall, ASML expects total sales in 2026 to at least match 2025.<\/p>\n Share<\/a> Photograph: Christian Hartmann\/Reuters<\/p>\n Shares in European luxury goods makers are rallying this morning, after LVMH Mo\u00ebt Hennessy Louis Vuitton reported a rise in sales thanks to improved demand in China.<\/p>\n LVMH reported a 1% rise in sales in the third quarter of this year, \u201cdespite a disrupted geopolitical and economic environment\u201d.<\/p>\n The French luxury house reported \u201csolid local demand\u201d in Europe and the US, a drop in sales in Japan, and a \u201cnoticeable improvement in trends\u201d in the rest of Asia.<\/p>\n Kathleen Brooks, research director at XTB, says:<\/p>\n This suggests that the slump in the demand for luxury is starting to level off. There was also growth in sales to China, which had been hit by a slump in recent years. Analysts now expect the leather goods sector, especially Luis Vuitton and Christian Dior, could fuel growth for this sector into next year.<\/p>\n Sharesi in LVMH have jumped by 12% in early trading. In London, Burberry are up 6.8%.<\/p>\n Share<\/a>Trump threatens China with cooking oil embargo over soybeans<\/p>\n Cooking oil has become the latest front in the US-China trade war.<\/p>\n Last night, President Donald Trump<\/a> suggested his administration is considering terminating cooking oil purchases from China, in retaliation for Beijing refusing to buy U.S. soybeans.<\/p>\n Posting on his Truth Social site, Trump said:<\/p>\n I believe that China purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers, is an Economically Hostile Act. We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution. As an example, we can easily produce Cooking Oil ourselves, we don\u2019t need to purchase it from China.<\/p>\n US soya bean farmers have warned that China \u2013 usually a major customer \u2013 has halted orders amid the trade war with Washington.<\/p>\n Share<\/a><\/p>\n Another fine! Outsourcing giant Capita has been fined \u00a314m by the Information Commissioner\u2019s Office (ICO) for failing to protect personal data after hackers stole 6.6 million people\u2019s information during a cyber attack in 2023.<\/p>\n The data watchdog said the breach in March 2023 saw the hackers access information including pension details and staff records, as well as details of customers of organisations Capita supports.<\/p>\n In some cases this included sensitive information such as details of criminal records, financial data or so-called special category data, which can include race, religion and sexual orientation.<\/p>\n The ICO fined Capita \u00a38m and a further \u00a36m for Capita Pension Solutions, which processes personal information on behalf of more than 600 groups providing pension schemes, with 325 of these organisations also impacted by the data breach.<\/p>\n John Edwards, UK information commissioner, said:<\/p>\n \u201cCapita failed in its duty to protect the data entrusted to it by millions of people.<\/p>\n \u201cThe scale of this breach and its impact could have been prevented had sufficient security measures been in place.\u201d<\/p>\n Update: Adolfo Hernandez, chief executive officer at Capita, has said the company has been taking steps to strengthen itself against cyber attacks (a rising threat for businesses):<\/p>\n \u201cAs an organisation delivering essential public services as well as key services for private sector clients, Capita was among the first in the recent wave of highly significant cyber-attacks on large UK companies.\u201d<\/p>\n \u201cWhen I joined as CEO the year after the attack I accelerated our cyber security transformation, with new digital and technology leadership and significant investment. As a result, we have hugely strengthened our cybersecurity posture, built in advanced protections and embedded a culture of continuous vigilance.\u201d<\/p>\n \u201cFollowing an extended period of dialogue with the ICO over the last two years, we are pleased to have concluded this matter and reach today\u2019s settlement. The Capita team continues to focus tirelessly on our Group transformation journey for the benefit of our customers, our people and wider society.\u201d<\/p>\n Share<\/a><\/p>\n Updated at\u00a004.50 EDT<\/p>\n Royal Mail fined (again) for missing delivery targets<\/p>\n Royal Mail has been fined \u00a321m for missing its delivery targets in the 2024\/25 financial year.<\/p>\n The postal operator was penalised by regulator Ofcom for only delivering 77% of First Class mail and 92.5% of Second Class mail on time, well short of its 93% and 98.5% targets.<\/p>\n This is the third year running in which Royal Mail has been fined for delivery target failures \u2013 it was billed \u00a35.6m in November 2023 and \u00a310.5m in December 2024.<\/p>\n Announcing today\u2019s fine, an exasperated-sounding Ofcom says Royal Mail must urgently publish \u2013 and deliver \u2013 a credible improvement plan, or fines are likely to continue.<\/p>\n Ian Strawhorne, director of enforcement at Ofcom, says:<\/p>\n \u201cMillions of important letters are arriving late, and people aren\u2019t getting what they pay for when they buy a stamp. These persistent failures are unacceptable, and customers expect and deserve better.<\/p>\n \u201cRoyal Mail must rebuild consumers\u2019 confidence as a matter of urgency. And that means making actual significant improvements, not more empty promises. We\u2019ve told the company to publicly set out how it\u2019s going to deliver this change, and we expect to start seeing meaningful progress soon. If this doesn\u2019t happen, fines are likely to continue.\u201d<\/p>\n Share<\/a>Vets could be made to publish prices after UK watchdog investigation Vets in the UK could be forced to publish their prices and whether they are part of a larger group after an investigation by the markets watchdog into claims chain-owned surgeries have left pet owners with dwindling choice and higher bills.<\/p>\n The Competition and Markets Authority<\/a> (CMA) found pet owners pay 16.6% more on average at large vet groups than at independent vets and called for a market that is \u201cnot fit\u201d for purpose to be modernised.<\/p>\n Publishing its findings on Wednesday of an investigation into how veterinary services operate in Britain<\/a>, the regulator found that owners were often unaware of the prices of commonly used services and whether their local practices are part of large national chains.<\/p>\n Share<\/a>FT: Rachel Reeves revives plans to overhaul cash Isas<\/p>\n The Financial Times are reporting<\/a> that Reeves is considering reviving plans for a major overhaul of tax-free Isas.<\/p>\n Back in July, the chancellor shelved plans to cut the amount savers can put into tax-efficient cash Isas from \u00a320,000 per year to \u00a35,000, after lobbying from banks, building societies and consumer groups.<\/p>\n According to the FT, the Treasury is now considering halving the annual cash limit, to \u00a310,000 per year, in an attempt to divert tens of billions of pounds of savings from cash into domestic stocks.<\/p>\n Share<\/a><\/p>\n Updated at\u00a002.41 EDT<\/p>\n Sky: Chancellor admits tax rises and spending cuts considered for budget<\/p>\n Rachel Reeves has told Sky News<\/a> she is looking at both tax rises and spending cuts in the budget.<\/p>\n When asked how she would deal with the country\u2019s economic challenges in her 26 November statement, the chancellor replied:<\/p>\n \u201cOf course, we\u2019re looking at tax and spending as well.\u201d<\/p>\n Spending cuts could be politically challenging for the government, though, following the revolt over welfare cuts last summer, which is why many economists expect tax rises in the budget.<\/p>\n With forecasts swirling of a black hole of perhaps \u00a320bn in the budget calculations<\/a>, Reeves also insisted she would stick to her fiscal rules, saying:<\/p>\n \u201cThe numbers will always add up with me as chancellor because we saw just three years ago what happens when a government, where the Conservatives, lost control of the public finances: inflation and interest rates went through the roof.\u201d<\/p>\n And asked if she could promise she won\u2019t allow the economy to get stuck in a doom loop cycle, Reeves replied: \u201cNobody wants that cycle to end more than I do.\u201d<\/p>\n Chancellor Rachel Reeves exclusively tells @SamCoatesSky<\/a>, ‘of course, we’re looking at tax and spending as well’.<\/p>\n The Chancellor said she is looking at both tax rises and spending cuts in the budget in her first interview since being briefed on the scale of the black hole. pic.twitter.com\/CjxYpFqkfi<\/a><\/p>\n \u2014 Sky News (@SkyNews) October 15, 2025<\/a>Share<\/a><\/p>\n Updated at\u00a004.26 EDT<\/p>\n Reeves pushed to show ‘credibility’ on fiscal consolidation Rachel Reeves may also face pressure to show a credible tax and spending plan in November\u2019s budget, and measures to improve productivity, during her visit to Washington.<\/p>\n Yesterday, at a press conference about the outlook for global financial stability, IMF expert Antansios Vamvakidis warned:<\/p>\n \u201cclearly markets are concerned about the UK economy, and we have seen more volatility in the UK compared to other advanced economies.\u201d<\/p>\n Pointing to above-target inflation and weak productivity, he said:<\/p>\n \u201cthe market is asking for more details on the fiscal plans in the UK: so yields, as a result, are higher in the UK compared to other advanced economies.\u201d<\/p>\n With Rachel Reeves currently drawing up her budget for 26 November, Vamvakidis added that the IMF recommends the government show, \u201ccredibility on the fiscal consolidation plan, and reforms to increase productivity.\u201d<\/p>\n![\"Julia](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/10\/1760518448_161_Julia-Kollewe,-L.png\")
Julia Kollewe<\/p>\n![\"Heather](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/10\/1760518448_225_Heather_Stewart,_L.png\")
Heather Stewart<\/p>\n