‘Self-defeating’ tax rises pushing up borrowing costs

“Self-defeating” tax rises and persistent inflation are to blame for the recent surge in Britain’s borrowing costs, Rachel Reeves has been warned.

Simon French, chief economist at Panmure Liberum, said the increase in UK gilts – a benchmark for the cost of servicing the national debt – was creating “angst” around Britain’s fiscal position.

He said: “Self-defeating tax increases, asymmetric inflation, and central bank asset sales are all UK factors that have acted to amplify the global grind higher in sovereign interest rates.”

It comes after the UK’s long-term borrowing costs surged to a 27-year high this week.

Retailers warn Chancellor ahead of autumn budget

Retail leaders representing more than 60 of Britain’s biggest chains have written to Chancellor Rachel Reeves, urging urgent action ahead of the Autumn Budget.

The letter, coordinated by the British Retail Consortium (BRC), highlights mounting financial pressures on the sector and calls for measures to protect prices, investment and jobs.

Retailers say government policies implemented this year have added around £7 billion in new costs.

These stem from higher employer National Insurance contributions, increased labour costs—including a rise in the national living wage—and a new packaging levy.

The BRC warns that food price inflation, which has already climbed, could reach 6 per cent by the end of the year, increasing pressure on household budgets.