Business leaders have warned of potential economic relapse and the threat posed by the soaring deficit as the Chancellor prepares his pre-budget report, reports the Independent.
Some of Britain's leading business organisations have warned the recovery will be fragile and soaring public borrowing threatens the UK's international credit rating. Britain, they say, runs a high risk of a "relapse" into recession next year.
The Engineering Employers' Federation says that conditions in the British manufacturing sector have continued to improve, but that signs for a strong rebound in 2010 "remain elusive". Read more
The Daily Mail reports about growing fears that 70,000 more Britons face paying the top rate of income tax under plans from Alistair Darling.
According to accountants, the Chancellor will trigger the increase by freezing personal allowances for taxpayers in his pre-budget Report on Wednesday.
It is also thought that the threshold for higher-rate income tax will be held at the current level.
Although ministers may justify the freeze by citing falling inflation, the plans mean those workers earning around £43,000 who do get pay rises would end up paying much of it to the Government. Read more
A windfall tax on bonus payments to highly paid City bankers was under consideration at the Treasury yesterday, reports The Guardian, as the government prepared to announce Whitehall efficiency savings worth £3bn.
Chancellor Alistair Darling is looking at bonuses but has ruled out a tax on bank profits of the sort Labour levied on the privatised utility companies in 1997.
The Treasury is concerned that a windfall tax on profits would hit the capital position of banks at a time when the government is eager that they should rebuild their finances after the losses suffered over the past two and a half years. Government sources said that a decision had yet to be taken and Darling would make up his mind during the next 48 hours. Read more
The Times runs an article detailing how Lord Davies of Abersoch, the Trade Minister, flew to Saudi Arabia last night to try to defuse a growing dispute that bankers say could do as much damage to the Gulf's bruised financial reputation as the Dubai shock of ten days ago.
Bankers are furious that two defaulting Saudi conglomerates that owe $20bn (£12.2 billion) appear to be favouring local banks over foreign creditors. State-owned Royal Bank of Scotland, HSBC and Standard Chartered are all understood to have exposure to Saad Group and Ahmad Hamad Algosaibi & Bros (Ahab). Dozens of other Western banks are also owed money, including Citigroup and BHP Paribas. Read more
The Times also reports that Alistair Darling will not raise capital gains tax from its present 18% rate in his pre-budget report on Wednesday, despite fears of a "soak the rich" budget.
Treasury sources last night brushed off speculation that the chancellor will announce a windfall tax on banks or bank bonuses.
Though Darling is not expected to increase the top rate of income tax to beyond 50% or announce a new raid on pensions, experts warn that Labour's tax plans are already undermining the City. Read more
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected