UK economic growth improved this year thanks to ‘temporary increase’ in spending

Britain’s economy is set to grow more than expected this year and next, partly thanks to the boost from the chancellor’s big fiscal spending plans, the government’s official forecaster has said.

However, the fiscal watchdog also cut its long-term economic growth projections as the government increased fiscal measures. The Office for Budget Responsibility (OBR) predicts that the UK’s gross domestic product (GDP) will increase by 1.1% in 2024.

This reflects an upward revision from its previous forecast of 0.8% and is higher than recent projections from the Organization for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF).

Companies “are ready to pass on most of the increase in tax burdens to employees by lowering salaries”

Employees are expected to bear the brunt of rising tax burdens for businesses, with an increase in employers’ social insurance “highly likely” to impact employment and result in lower wages, according to the official government forecaster.

Analysis by the Office for Budget Responsibility (OBR) has found that an increase in employer National Insurance (NI) contributions is expected to have an indirect impact on employment and wages. The OBR assumes that businesses will “pass on most of their higher tax burdens to employees”, but not all.

For the 2025 to 2026 fiscal year, when the changes will be introduced, it estimates that businesses will pass on 60% of higher costs to workers and consumers, through lower wages and higher prices.

The latest Skoda Kodiaq gains performance in the vRS version

Skoda has added a new vRS variant to its second-generation Kodiaq range.

The new vRS features a 2.0-litre turbocharged petrol engine producing 261bhp – 20bhp more than the old performance Kodiaq – driving all four wheels for better traction in poor and slippery conditions. Other performance upgrades include two-piston brake calipers on the front axle to improve stopping power, while ventilated discs are found on all four wheels. All versions also come with a seven-speed DSG automatic gearbox as standard.

The new car gets a body kit and an assortment of sporty styling features inside and out. Pricing and specifications will be announced soon.

The FTSE 100 index closed firmly in the red despite the autumn budget boosting some UK-focused businesses hoping for a boost from the government’s spending plans. The FTSE 100 finished down 59.98 points, or 0.73%, to end the day at 8,159.63, while the FTSE 250 closed 0.35% higher for the session.

In continental Europe, the Cac 40 ended the day down 1.1% and the Dax index down 1.13%. In the United States, major markets were slightly lower, with pharmaceutical giant Eli Lilly among the main bearers.

The pound sterling was down 0.13% at 1.299 US dollars and 0.5% at 1.196 euros.

Budget contains broken promises that will affect workers, says Sunak

Rishi Sunak has accused Rachel Reeves of delivering a budget containing “broken promise after broken promise”, adding: “Workers 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” in ruling out “fiscal surprises”.

Sunak went on to say Labor would tax people’s work, businesses, housing and savings, adding: “You name it, they will tax it and that’s exactly what they’ve done.”

Impact of inheritance tax on farmers criticized

Farmers have been dealt a “potentially fatal blow” in the budget, a DUP MP has claimed.

Chancellor Rachel Reeves announced a reform of inheritance tax on farms during Wednesday’s Budget announcement. She said that from April 2026, the first £1 million of combined business and agricultural assets would continue to be subject to no inheritance tax. But for assets above £1 million, inheritance tax will apply with 50% relief, at an effective rate of 20%.

DUP MP Carla Lockhart said Britain’s agricultural unions had warned the government about the impact of weakening Agricultural Property Relief. She said family farms could be dismantled if they were forced to sell their land to pay the cost of passing the farm on to the next generation.

The new VED rates will double for petrol, diesel and hybrid vehicles, widening the tax gap between high-polluting cars and electric vehicles. Electric vehicle buyers will pay just £10 for the first year, while higher fees will apply to conventional and hybrid vehicles.

Following the Court of Appeal’s ruling on car finance, lenders are scrambling to update their procedures, with major players suspending repayments. Dealers warn of financial difficulties as delays impact sales nationwide.

Group 1 is expanding its UK operations, adding 58 Inchcape dealerships and expecting annual sales of $2.7bn (£2bn). With UK sales accounting for 26% of Group 1’s total, they are focused on effective integration, led by new CEO Mark Raban.

FCA CEO Nikhil Rathi has called for more clarity on car finance following a Court of Appeal ruling affecting car dealer finance commissions. As lenders consider appeals, Rathi stressed the need for fair treatment of customers and continued functionality of the market, engaging closely with the industry and government.

Aston Martin reduced its third-quarter pre-tax losses by 90%, to £12.2 million, with a 14% increase in wholesale volumes. Despite overall sales lag and supply chain challenges in 2023, new models have driven growth, with plans to control costs and increase profitability ahead.

More than 1,000 Ford office workers went on strike to protest performance-related pay and contract changes. Unite members are demanding a permanent pay rise, rejecting Ford’s one-off payment for 2024 and performance-based pay for 2025. Strikes could intensify if no deal is reached.

A Court of Appeal ruling requires car dealers to disclose details of financial commissions to customers, surprising the financial sector. Major lenders have suspended lending to implement changes, while the Finance and Leasing Association supports increased transparency, seeing it as essential for consumer confidence.

A dry day with mostly sunny spells and variable clouds, BBC Weather reports, while western Scotland and Northern Ireland will see some drizzle. Temperatures will be around 16 degrees.

Just like today, tonight will be an evening of two halves. Central and southern areas will be dry with cloudy areas and fog, while further north there will be rain.