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  • UK treasury chief says ‘harsh global headwinds’ from wars and tariffs are harming the country’s economic outlook | Fortune

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    Britain’s Treasury chief warned Monday that “harsh global headwinds” from wars in Ukraine and the Middle East and U.S. President Donald Trump’s tariffs have worsened the U.K.’s economic outlook since the governing Labour Party won power last year.

    Chancellor of the Exchequer Rachel Reeves told Labour’s annual conference that her economic plans must be “fit for an uncertain world,” a hint she will raise taxes in her autumn budget on Nov. 26.

    “In the last year the world has changed, and we are not immune to that change,” she told the BBC before the speech. “Whether it is wars in Europe and the Middle East, whether it is increased barriers to trade because of tariffs coming from the United States, whether it is the global cost of borrowing, we’re not immune to any of those things.”

    Since ending 14 years of Conservative rule in July 2024, Labour has struggled to deliver the economic growth it promised. Inflation remains stubbornly high and the economic outlook subdued, frustrating efforts to repair tattered public services and ease the cost of living.

    Labour pledged during the election not to raise taxes on working people, but has since hiked levies on employers.

    Reeves told the BBC she was “determined not to increase those key taxes that working people pay,” stopping short of ruling out any hikes at all.

    In her speech, interrupted by repeated standing ovations from hundreds of Labour members — and by a lone pro-Palestinian protester — Reeves leavened her sober assessment of the country’s finances with a touch of optimism. She outlined the government’s investments in defense, transport, energy and education, claiming they were making a difference to millions of people.

    She pledged to end long-term youth unemployment, saying everyone under 25 who has been unemployed for 18 months will be offered guaranteed paid work. One in eight 16–24-year-olds in Britain — about 1 million people — is currently not in education, work, or training.

    Reeves also said the government was working on an “ambitious agreement on youth mobility” with the 27-nation European Union. British citizens lost the right to move and work freely in the EU when the country left the bloc in 2020.

    Thousands of Labour members are in Liverpool, northwest England, for the party conference -– a mix of policy forum and pep rally that this year is lacking in pizazz.

    The hard right is a key concern

    Labour lags behind Nigel Farage ’s hard-right Reform UK party in opinion polls, and some party members are losing faith in Prime Minister Keir Starmer, even though there may be four years until the next election.

    Many are rallying around Andy Burnham, the ambitious Labour mayor of Manchester, who said Sunday that the party is in “peril” and needs to change direction.

    Reeves took aim at those in Labour, such as Burnham, who argue the government should borrow more to spend more on public services. She cited former Conservative Prime Minister Liz Truss’ disastrous 2022 plan for unfunded tax cuts, which sent the value of the pound plunging and the cost of government borrowing soaring.

    “When spending gets out of control, when market confidence is lost … it is felt immediately in the growing cost of essentials, and rising interest rates,” Reeves said.

    The threat posed by Reform is top issue among Labour delegates at the four-day conference, which ends Wednesday. Farage’s party has only five lawmakers in the 650 seat House of Commons, and Labour has more than 400. Nonetheless, Starmer said Reform is now Labour’s chief opponent, not the main opposition Conservatives.

    Starmer has described the fight between Labour and Reform as “a battle for the soul of this country.” On Sunday he accused Farage of sowing division with plans by Reform to deport immigrants who are in the U.K. legally. Starmer said such a policy would be “racist” and “immoral.”

    The U.K. government has toughened its own language about immigration, though. Home Secretary Shabana Mahmood told the conference the government must question some of “the assumptions and legal constraints” around migration.

    She said she plans to raise the bar immigrants must meet to gain permanent residency. Under the proposals, people will have to have a “high standard” of English, no criminal record and give back to their communities to get the right to settle in the U.K.

    “Unless we have control of our borders, and until we can decide who comes in and who must leave, we will never be the open, tolerant and generous country that I know we all believe in,” she said.

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    Jill Lawless, The Associated Press

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  • Hungary birth rate falls to record monthly low despite €30,000 offer to 3 child families

    Hungary birth rate falls to record monthly low despite €30,000 offer to 3 child families

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    Viktor Orbán, Hungary’s right-wing prime minister, has several populist policies, one of which has been to grow Hungary’s native population.

    But early successes appear to be running out of steam in Hungary, as its birth rate is still falling despite huge incentives being offered to new parents.

    Populations across Western Europe are struggling with falling birth rates, which threaten long-term economic growth and could create a healthcare crisis as fewer young people are forced to care for and subsidize an increasingly older population. 

    However, financial barriers, such as rising accommodation prices, are a major obstacle to childbearing, which has been compounded by the cost of living crisis. Changing workplace dynamics, with more women enjoying meaningful careers, also push back the average age for couples to have their first child. 

    Immigration is regarded as the most realistic way of maintaining an optimal average population age, but that has become highly politically contentious since the global financial crash. 

    Hungary’s fight to increase childbirth

    Hungary is particularly sensitive to immigration, which Orbán has repeatedly argued would harm the country’s cultural fabric. From 2025, immigrants from non-EU countries will have to pass a Hungarian history and culture test to become residents of the country. 

    Instead, it is championing the classic populist policy of increased childbirth among natives.

    “We do not need numbers, but Hungarian children,” Orbán said in his State of the Nation address in 2019 as he rolled out childbirth incentives.

    To do so, Hungary is offering weighty financial incentives to up appearances in its hospital’s midwifery units. 

    In 2019, Hungary offered parents a €30,000 interest-free loan to spend on anything they wanted. The loan would be forgiven if they had three children. 

    Mothers of four children or more are exempt from paying income taxes under Orbán’s policy, which could be extended to those with fewer children.

    Hungary’s birth rate rose through the 2010s, rising from a record low of 1.25 in 2011 to 1.61 in 2021. But in recent years, growth has halted. In June, Hungary registered a record-low number of 6,000 births. 

    Wolfgang Lutz, founding director of the Wittgenstein Centre for Demography and Global Human Capital in Vienna, told the Financial Times that the policies had merely pushed forward births among women who had intended to have children at some stage in their lives anyway. 

    Those on lower incomes complained to the publication that the subsidies weren’t adequate to incentivize having more children, which became increasingly expensive to manage more children. The removal of income tax does little for self-employed workers, for example.

    Permeating the debate has been an encouragement for the growth of “traditional,” heterosexual family units. 

    Hungary’s policies are focused on incentives for new mothers, while in 2021 the country introduced laws that banned LGBT content from being shown in schools, something the U.S. and EU labeled as “discriminatory.” 

    Populist swing

    Increasing childbirth has long been a critical policy anchor of right-leaning populist governments, allowing them to solidify their stance as self-proclaimed protectors of traditional family values while offering them an anti-immigration platform. 

    While Orbán’s birthing policy looks to be on the ropes, the playbook does have one high profile proponent: U.S. Republican vice presidential candidate J.D. Vance.

    Vance suggested in 2021 that Americans with children should get more votes than their childless peers. While on the campaign trail at the same time, Vance also hailed Orbán’s push for more births.

    “Viktor Orbán, who is, of course, the bugaboo of nearly every liberal in the mainstream American media, has implemented a couple of policies that I think are really interesting.

    “They offer loans to new married couples that are forgiven at some point later if those couples eventually stay together and have children. Why can’t we do that here? Why can’t we actually promote family formation here in our country?”

    Vance recently walked back his comments on giving more votes to parents, describing them as a “thought experiment” amid heavy backlash.

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    Ryan Hogg

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