Reeves may have to U-turn over no more tax rises, warn economists

A dramatic slowdown in economic growth and rising borrowing costs since the budget could undermine the government’s finances and force the chancellor, Rachel Reeves, to U-turn on pledges not to further increase taxes, analysts have said.With inflation on the rise again, the London stock market at its lowest point for more than a month and the Bank of England forecasting economic stagnation in the final three months of 2024, the government heads into the Christmas break weighed down by a gloomy outlook for the new year.The prospect of a trade war with the US after Donald Trump is inaugurated in January has also weighed on markets. In statements on social media on Friday, the president-elect threatened the EU with tariffs on exports to the US, which could be extended to include the UK.City economists said the rise in inflation over the past three months would force the Bank to maintain high interest rates, which would weigh on household spending and dent Reeves’s plans to grow the economy

EU should spare carmakers from ‘punitive’ emissions fines, says Scholz

The EU should refrain from “punitive” fines on carmakers that fail to meet emissions standards, the German chancellor has said, adding to the heated debate on the future of the key European industry.Olaf Scholz, who is running for re-election in February at a time when Germany’s biggest carmaker, Volkswagen, is planning unprecedented plant closures in its home market, made the comments after meeting fellow EU leaders in Brussels.His intervention comes days before the sector faces stricter standards on cutting carbon emissions from their new cars. From 2025 until 2029 the average new car in Europe should emit no more than 93.6 grams of CO2 for each kilometre, to get the industry on track for the phase-out of petrol and diesel vehicles from 2035

Boohoo shareholders vote to block Mike Ashley from joining board

Boohoo shareholders have blocked Mike Ashley and an associate from joining its board in a blow to the Sports Direct founder’s attempt to control the struggling online fashion retailer.Investors representing 64% of Bohoo’s stock voted against appointing Ashley and Mike Lennon at a special meeting on Friday morning called by Ashley’s Frasers Group.The chair of Boohoo, Tim Morris, said shareholders had given “a resounding vote of confidence in our board” at the meeting.He said 99% of those that voted – excluding the 27% stake in Boohoo controlled by Ashley’s Frasers Group – had chosen to block Ashley’s appointment.Morris said Boohoo would now “like to get on with running our business”, although it is not clear how Frasers will respond to the vote

Starbucks workers’ strike could reach hundreds of stores by Christmas Eve

Workers at Starbucks stores in three cities plan to go on strike on Friday after a union representing more than 11,000 baristas in the US said it was making little progress with the giant coffee chain’s owners over pay and conditions.The walkouts will start in Los Angeles, Chicago and Seattle, with strike action set to spread each day and, subject to a deal, reach hundreds of stores by Christmas Eve.The strike comes as workers at the online giant Amazon was also hit by a worker’s walkout.Starbucks Workers United, the union that has organized workers at 535 company-owned US stores since 2021, said Starbucks has failed to honor a pledge to meet to reach an agreement this year.“Union baristas know their value, and they’re not going to accept a proposal that doesn’t treat them as true partners,” said Lynne Fox, president of Workers United

Donald Trump tells EU to buy more US oil and gas or face tariffs

The US president-elect, Donald Trump, has warned the EU that it will face trade tariffs on its exports to the US unless its member states buy more American oil and gas.Trump reignited fears of a looming trade war between the US and the EU in his first public statement regarding trade since he was elected president in November.“I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!,” he said in a post on his social media site Truth Social.The US is the world’s largest producer of oil and has also emerged as the biggest supplier of liquefied natural gas (LNG) to the bloc since Russian supplies of pipeline gas to its European customers petered out after the full-scale invasion of Ukraine in early 2022

Lift for Rachel Reeves as UK borrowing hits three-year low

The UK’s debt bill fell last month as government borrowing dropped to just over £11bn, giving Rachel Reeves an early Christmas present after a furious backlash from business leaders to her budget.Official figures showed the interest payable on central government debt was £3bn, much lower than analysts expected and a decrease of £4.7bn from the same month in 2023, to give the lowest November figure since 2019.The Office for National Statistics said borrowing in November was £11.2bn, based on the longstanding measure of public sector net borrowing (PSNB), well below the £13bn City economists had forecast, and the lowest November borrowing in three years