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Labour’s tax increases are pushing workers and investors abroad.
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The Editorial Board
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Tag: northern europe
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Opinion | Britain Budgets for National Decline
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U.K. Government Borrowing Runs Ahead of Plan as Budget Looms
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The U.K. government’s borrowing continued to run ahead of projections in October, a deterioration in its finances that it will aim to correct with tax rises and some spending cuts in its annual budget statement next week.
The Office for National Statistics on Friday said the government borrowed 17.4 billion pounds ($22.75 billion) in October, bringing the total for the first seven months of the fiscal year to 116.8 billion pounds, 9.9 billion pounds above the amount projected by the Office for Budget Responsibility in its March forecasts.
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Paul Hannon
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U.K. Follows Europe and U.S. in Crackdown on Asylum Seekers
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LONDON—The U.K. government on Monday announced an overhaul of its immigration policy to deter asylum seekers from arriving on British shores, the latest European nation to tighten rules in response to growing dissatisfaction from voters at levels of illegal immigration.
The Labour government of Prime Minister Keir Starmer announced a suite of policies including changing laws to make it easier to expel migrants, quadrupling the length of time they have to wait to become permanent residents to 20 years and regularly reviewing whether their home countries have become safer and can take them back.
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Max Colchester
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Opinion | British Labour’s Fiscal Mess
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Britain’s stock and bond markets flopped Friday morning on new evidence that the country’s Labour Party leadership doesn’t have a clue what to do about the economy or budget. Add this to the list of welfare-state cautionary tales out of Europe.
At one point Friday morning, the yield on the benchmark 10-year government bond, or gilt, had risen 11 basis points to 4.55%. The main London stock index dipped nearly 2%, and the pound fell. This was in response to a Financial Times report Thursday night that Chancellor of the Exchequer Rachel Reeves is abandoning plans to increase income-tax rates in her budget plan this month.
This sounds like good news. but investors interpreted it as a sign that Ms. Reeves and her boss, Prime Minister Keir Starmer, have run out of politically viable ways to balance the government budget—which is true. Estimates of the budget “black hole” Ms. Reeves needs to fill range up to £30 billion per year—the gap between likely spending and revenue if current policies stay the same.
An attempt over the summer to cut some particularly generous welfare benefits collapsed amid a rebellion from Labour backbenchers in Parliament, putting welfare reform off the table. Mr. Starmer is rightly under pressure to increase defense spending. Labour’s promises of economic growth via public “investment” translate mainly to pay increases for government workers.
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The Editorial Board
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U.K. Economy Grows at Slower Pace Ahead of Budget
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GDP rose 0.1% in the third quarter, compared with 0.3% in the second, amid uncertainty about the government’s budget and the impact of a cyberattack on a major carmaker.
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Don Nico Forbes
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Britain Is Preparing Tens of Billions in New Taxes—Again
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LONDON—The U.K. has long been torn between two mutually exclusive desires: Voters want European levels of welfare with American levels of taxation.
By accident or design, that debate is slowly being resolved in the direction of higher taxes, as Britain’s Labour government prepares its second major tax increase in as many years.
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David Luhnow
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Opinion | When Irish Eyes Are Glaring
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Tensions with the U.S. will heighten under the new left-wing president.
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Robert C. O’Brien
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U.K. Treasury Chief Says Lowering Inflation Will Be Budget Focus
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The U.K. government’s upcoming budget will focus on lowering inflation and paving the way for the Bank of England to lower its key interest rate, treasury chief Rachel Reeves said Tuesday.
In a speech, Reeves also said the Nov. 26 budget would aim to lower the government’s debt, but also protect public services. She didn’t rule out a rise in taxes on households, which many economists see as the only option left to the government if it is to achieve its other goals.
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Paul Hannon
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Europe’s Role Reversal: The Problem Economies Are Now Further North
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The European debt crisis of the early 2010s created an image of a continent cleaved in two: The fiscally responsible core countries led by Germany versus the spendthrift southern periphery of Portugal, Italy, Greece and Spain—disdainfully dubbed PIGS.
Nowadays, there has been a role reversal. Europe’s three biggest economies are stuck in a cycle of weak growth, leading to widening budget deficits. France is the epicenter of this shift and remains mired in a budget and political crisis, while the U.K. is eyeing tax hikes to try to narrow the gap and avoid spooking markets. Famously frugal Germany and the Netherlands are taking on debt, albeit from lower levels.
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Chelsey Dulaney
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Opinion | The U.K. Stabbing Is Every Commuter’s Nightmare
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For those of us who ride the commuter rails and subways daily, Saturday night’s mass stabbing on a London-bound train is a nightmare brought to life. In such confined and well-lit spaces, there isn’t any way to do what the experts say you should: run, hide and, as a last resort, fight.
A train car moving at high speed with the doors and windows closed is a violent psychopath’s dream—a veritable barrel full of unarmed, unsuspecting fish. Most of us have our heads buried in our phones, our ears distracted by music or podcasts. Some of us are poring over newspapers or dreamily watching the countryside fly by. Rarely do any of us do a threat assessment of those nearby. We are in our own little in-between place—not home, not at work. En route. Vulnerable.
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Matthew Hennessey
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Mass Stabbing on Train to London Causes Life-Threatening Injuries
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Police made two arrests after the train was stopped in Huntingdon, near Cambridge, and say there is no sign of a terrorist motive.
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Key Moments in the Downfall of Prince Andrew
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After years of damaging headlines over his friendship with Jeffrey Epstein and allegations of sexually abusing a teenager, Andrew has been stripped of all his titles and his Windsor mansion residence.
His public disgrace is unprecedented in modern British royal history. Here is a recap of his downfall:
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Natasha Dangoor
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Why Buckingham Palace Decided to Get Rid of Andrew
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LONDON—In recent days, King Charles III moved decisively to shut down a slow-burning scandal that threatened to tarnish not only his reign but that of his son Prince William.
For over a decade, the former friendship between Charles’s younger brother Andrew and convicted sex offender Jeffrey Epstein generated negative headlines, embarrassing the royal family. Andrew had long denied he abused an American teenage girl introduced to him by Epstein decades ago, but a drumbeat of fresh disclosures in recent weeks brought the scandal back to Britain’s front pages, sparking fresh public disapproval and complaints from lawmakers about the man 8th in line to the throne.
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Max Colchester
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BOE to Embrace Uncertainty, and Bernanke’s Guidance, With Communications Revamp
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The central bank place will more emphasis on developments that could upend its expectations and less on forecasts that convey too much certainty about the future.
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Paul Hannon
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Prince Andrew Stripped of Royal Title by King Charles
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Andrew’s friendship with Jeffrey Epstein and new revelations about longstanding abuse allegations forced the king’s hand.
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Max Colchester
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Japan Woos Trump With a Royal Welcome
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TOKYO—The British aren’t the only ones who can sprinkle a little royal stardust when President Trump comes to town.
As Trump pays a visit to Tokyo this week, his Japanese hosts are counting on some face time with the emperor to set a positive tone—even if the reception fell short on pomp.
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Jason Douglas
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Opinion | Britain’s Do-It-Yourself Version of Chinese Sabotage
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A ‘spying’ case that may have been a mistake all along sows more distrust than Beijing ever could.
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Joseph C. Sternberg
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U.K. Inflation Unexpectedly Holds Steady
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The U.K.’s annual rate of inflation in September unexpectedly held at the pace of the previous month, raising the chance that Bank of England policymakers could cut interest rates later this year, despite price rises remaining at a level still well above the central bank’s target.
Consumer prices were up 3.8% compared with the same month of last year, the Office for National Statistics said Wednesday, almost double the central bank’s 2% target and the same rate as August. Economists polled by The Wall Street Journal expected a higher rate of 4.0%.
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Ed Frankl
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Opinion | China’s Big London Spy Platform
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Did Britain’s Labour government torpedo a spying case to appease Beijing? Prime Minister Keir Starmer finds himself on the defensive as the opposition claims his government prioritized economic ties with China over national security. One test will be whether his government approves a proposed Chinese mega-embassy in London despite the espionage risks.
The political brawl erupted last month after a much-publicized espionage case collapsed on a legal technicality. Prosecutors claimed British teacher and consultant Christopher Berry and parliamentary researcher Christopher Cash passed sensitive details to Beijing in violation of the 1911 Official Secrets Act.
A 2024 High Court ruling expanded the definition of “enemy” to include any country that poses a national-security threat to the U.K. But the Crown Prosecution Service says the Labour government failed to provide such an assessment about China despite repeated requests, and as a result “the case could not proceed.” Messrs. Cash and Berry denied wrongdoing and the charges were dropped.
Mr. Starmer has blamed the previous government for failing to issue such a designation against China. Under political pressure, he released statements by deputy national security adviser Matthew Collins outlining the evidence in the espionage case, including that British MPs critical of Beijing were among the targets.
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