The Bank of England yesterday opted to cut interest rates down to 4 per cent in a positive mood for homeowners, borrowers and businesses - but with the threat of inflation still lingering higher than would be liked and expected to rise further, Rachel Reeves remains in a tricky position.
With the chancellor needing to find anywhere between £30bn and £50bn in savings or taxes by autumn, it is no surprise to hear of plans to change the way savings are taxed, with banks set to tell HMRC directly when savers have passed their allowed thresholds on interest payments so that they can pay tax accordingly - straight from workers’ pay packets.
In stock markets, most fell across Thursday including the FTSE 100 and S&P 500, with Asian stocks doing likewise overnight - with the exception of Japan’s Nikkei 225 which rose after it was revealed the nation faces a lower than expected tariff at 15 per cent. British shares are flat on Friday.
Follow The Independent’s live coverage of the latest stock market and business news here:
Key points
- Global stock markets fell yesterday - but Japan rose overnight on better tariff news
- FTSE 100 climbs slightly after opening on Friday
- Rachel Reeves approves rules change in tax crackdown on savings accounts
- Coventry Building Society joins sub-4 mortgage battle with launch of 3.8% deal
Rachel Reeves gives green light for tax crackdown on savings accounts
16:15 , Karl MatchettSavers could see tax due on interest payments deducted directly from their salaries in future after Rachel Reeves approved rule changes on banks sharing customer details.
The chancellor wants it to be easier for HMRC to charge people the tax due on their savings, with an estimated 300,000 more people than five years ago now passing the threshold for when that payment kicks in.
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Rachel Reeves gives green light for tax crackdown on savings accounts
Business and Money - Friday 8 August
07:56 , Karl MatchettGood morning all and welcome to the final weekday - we’re back as usual with all your personal finance news, stock market updates, companies and business latest and more.
Today’s early highlights will focus on Rachel Reeves and another tax raid, whether the FTSE 100 can bounce back and more.
Stock markets fell yesterday and overnight - except Japan
08:07 , Karl MatchettYesterday the FTSE 100 ended up down. So did the S&P 500. And the DAX. And the CAC 40. Overnight the Hang Seng fell. So too the Kospi, the Tadawul and the Shanghai - yet the Nikkei 225 rose a hefty 1.9 per cent to new record levels.
Japan was the outlier as their trade minister announced tariff rates of just 15 per cent, lower than expected and a boost to the nation, sending stocks soaring.
That news was also aided by Sony and Softbank reporting strong profits and potential slowing of inflation int he country.
What will today bring?!
FTSE 100 rises after opening
08:28 , Karl MatchettThe FTSE 100 has moved up 0.2 per cent after opening this morning, leaving it around 0.6 per cent up for the week so far.
Copper and coal miner Glencore (2.2%), JD Sports (1.8%) and pharma firm GSK (1.5%) are the highest risers so far.
Germany is marginally down, France marginally up in European markets.
Reeves launches tax crackdown on savings accounts
09:07 , Karl MatchettChancellor Rachel Reeves is upping the ante when it comes to savers paying tax.
Each person has a £1,000 personal allowance for interest without paying tax on it, but that drops to £500 for higher rate taxpayers and £0 for additional rate.
With wages rising and thresholds frozen it means more people are sneaking into the second category which slices in half their untaxable allowance - meaning some, given interest rates have been high the past couple of years, may now need to pay tax they didn’t previously.
Now HMRC will be set to take data directly from the banks so they can know who has surpassed thresholds, with new rules seeing National Insurance numbers passed on.
It’s yet to come into force as banks need to upgrade systems and there are millions of pounds of costs associated on both sides, but it’s a future issue which may take effect from 2027.
Why shoppers are shunning the high street as UK footfall continues to decline
09:35 , Karl MatchettA hoped-for summer boost to retail has failed to materialise for the second consecutive year as high-street football continues to decline.
Total UK footfall was down by 0.4 per cent year on year in July while shopper visits to the high street fell by 1.7 per cent, according to British Retail Consortium-Sensormatic data.
Shopping centre footfall was down by 0.3 per cent but visits to retail parks were up by 1.7 per cent on a year ago, reflecting continued new openings by major brands.
The figures also revealed that one in seven shops lie empty.
Why shoppers are shunning the high street as UK footfall continues to decline
Investors weighing mixed news as Trump puts tariff on gold bars
10:00 , Karl MatchettAnother day, another tariff - Trump is putting a tariff on imports of a very specific product that you and I may not be exactly in the market for every week: one-kilo gold bars.
That’s a hit to Switzerland, where most gold is cast into specific sizes.
Meanwhile investors are digesting interest rates, jobs data and the latest company earnings reports.
“The FTSE 100 was just about keeping its head above water to stay above the 9,100 mark on Friday morning,” said AJ Bell head of financial analysis Danni Hewson.
“Overall it has been a mixed week for the index with the split vote and hawkish tone adopted by the Bank of England yesterday lifting sterling and hitting the relative value of the Footsie’s dominant overseas earnings.
“US gold futures hit a fresh record high on reporting that the Trump administration has imposed tariffs on imports of one-kilo bars. Sustained by factors like its safe haven credentials and a weakening dollar in 2025 – this latest development will have gold bugs eyeing the $4,000 level.
“The news is more bad news for Switzerland after being hit by a shock 39% export tariff to the US, given it is one of the biggest precious metal hubs globally.
“The move higher in gold helped to lift shares in gold and silver miner Fresnillo in London, extending its advance year-to-date to more than 160%.
“Pharmaceutical giant GSK was also among the gainers on Friday morning as it secured a positive outcome from the settlement of a patent dispute involving CureVac with which it has a licence agreement. The dispute related to mRNA vaccines and gives GSK a modest, though still welcome, cash injection and the prospect of sales royalties.”
A new tax system is coming – here’s what the self-employed and freelancers need to know
10:29 , Karl MatchettIf you’re a sole trader, freelancer or other variety of work-for-yourself person, here’s a question for you: Do you know what Making Tax Digital is?
No more leaving your self assessment until the last minute - Making Tax Digital means changes to your record-keeping.
Here’s everything you need to know:
A new tax system is coming next year – here’s all the guidance you need
Crypto and commodities: Gold rises and bitcoin above $116k
11:00 , Karl MatchettBitcoin has gently fallen over the past week or two after hitting highs well above the $120,000 mark. After falling back to about $112k last week, it has risen 1.2 per cent over the past day and is now back to $116,500.
That’s partly on news that US president Trump signed an order allowing people to hold crypto in their 401(k) accounts - effectively the States’ version of a pension savings and investment account.
Gold is also up after that earlier news that imported bars should be subject to tariffs, up 1 per cent to $3,488 - while many analysts are still suggesting $4,000 this year is possible.
Brent crude oil is up 0.2 per cent but at $66.58 is lower than the price has generally been for the past two months.
GSK to be paid up to £370m after patent row
11:52 , Karl MatchettDrug maker GSK has secured a payment of up to $500 million (£372 million) after a patent row over Covid vaccines was settled in the US.
GSK told investors it will receive a $370 million (£275 million) settlement from CureVac, which it had worked with on the development of mRNA vaccine technology.
The London-based business will then be entitled to receive an additional $130 million (£97 million) depending on if a planned takeover of CureVac by BioNTech closes, which would settle a lawsuit outside of the US.
Mining stocks rise but FTSE 100 flat on Friday
12:15 , Karl MatchettNot a whole lot of movement in the FTSE 100 index today which is up just 0.05 per cent.
Smaller firms are down with both the FTSE 250 and AIM dropping, 0.1 and 0.3 per cent respectively.
Among the bigger firms it is the miners who lead the way.
Fresnillo (3.29%) and Glencore (2.39%) are the highest risers, with Rio Tinto (1%) also one of just 11 companies showing a share price rise of at least that level.
US stocks set to rise ahead of the weekend
12:43 , Karl MatchettLooking ahead to the afternoon, futures markets are showing US stocks set to rise.
The S&P 500 and the Nasdaq are both up 0.3 per cent in pre-trading - plenty can of course change across the rest of the day once the political crew wake up and start talking, but the main index is flat for the week so far so will be looking for a reason to climb.
Nvidia, the world’s biggest company by market capitalisation value, is up about 0.6 per cent in pre-trading following news that it’s likely to be exempt from 100 per cent tariffs on semiconductor chips, due to manufacturing in the US.
‘The fairest way’ or a ‘political disaster’? Readers split on whether Reeves should raise income tax
13:08 , Karl MatchettIndependent readers are sharply divided over whether Keir Starmer and Rachel Reeves should raise income tax to help fill the £50bn shortfall in the public finances this autumn.
Some see it as the fairest option, targeting those most able to pay. “A penny or two on the rates of income tax might just work wonders,” said one, while others argued it is long past time to align capital gains with income tax rates or reform property taxes.
Opponents warn that raising income tax could damage growth and hand political advantage to Reform leader Nigel Farage. “A rise in income tax across the board would be a political disaster for Labour,” cautioned another.
Join the poll here and leave your comments:
‘Fair’ or a ‘political disaster’? Readers split on whether income tax should rise
Yesterday the Bank of England cited food and beverage costs as one of the key drivers of inflation this year.
It’s expected to rise further in that area, pushing to 4% overall, before a downturn into next year.
In response, Karen Betts, chief executive at The Food and Drink Federation (FDF), said:
“Food and drink inflation is rising noticeably again and currently this shows no signs of easing. Global energy and commodity prices are rising once more, and this comes on top of new taxes and regulatory costs, like higher employer National Insurance Contributions and this year’s new packaging tax.
“Food and drink manufacturers try to absorb as many of these costs as possible to protect shoppers, but the fact is that making food and drink in the UK is more and more expensive to do.
“It’s critical that government takes decisive action to cut red tape and promote growth and investment across the food and drink sector, including ensuring there are no further cost increases to businesses in our sector in the autumn Budget.”
Savers could pay more tax straight from their salaries in new plans approved by Reeves
14:00 , Karl MatchettSavers could see tax due on interest payments deducted directly from their salaries in future after Rachel Reeves approved rule changes on banks sharing customer details.
The chancellor wants it to be easier for HMRC to charge people the tax due on their savings, with an estimated 300,000 more people than five years ago now passing the threshold for when that payment kicks in.
Full details:
Rachel Reeves gives green light for tax crackdown on savings accounts
Coventry Building Society launch 3.8% mortgage
14:35 , Karl MatchettCoventry Building Society has announced it will reduce mortgage rates across the board in the wake of the Bank of England cutting interest rates yesterday.
They will reduce all deals by up to 0.14%, saying that two, three and five year fixed deals are available.
Additionally, they are joining the sub-4% fight by launching a 3.8% two-year deal. It is for 65% LTV mortgages with a £999 fee.
Jonathan Stinton, head of mortgage relations at Coventry, said: “Rates coming down is great news for borrowers, because it means cheaper options are available. Whether people are looking to buy their first home or lock in a new deal, a lower rate can make a real difference to the monthly repayments. This can really help people feel confident about their next move.”
River Island restructuring plan approved by High Court judge
14:59 , Karl MatchettA restructuring plan aimed at preventing River Island from collapsing into administration has been approved by a High Court judge.
The clothing retailer is looking to secure further funding later this year to avoid falling into millions of pounds’ worth of debt.
The London-based company has laid out a rescue plan which will see it shut 33 stores and pay reduced rents on another 71 shops.
Landlords are being asked to cut rents for three years and potentially stop payments completely on some sites in a bid to stem losses.
More here from PA:
River Island restructuring plan approved by High Court judge
US stocks climb but The Trade Desk plummets 38%
15:30 , Karl MatchettUS stocks are up 0.6 per cent this afternoon in the S&P 500, with the Nasdaq slightly better at 0.68 per cent in the green.
There were a couple of big falls though; social media images site Pinterest fell 9% on lower profits and stagnant growth, while The Trade Desk has lost more than a third of its value - 38 per cent so far - in a single day.
That’s due to perceived uncertainty over its future growth and earnings.
The FTSE 100 remains down 0.14 per cent for the day.
Nearly half of UK businesses want an end to working from home
16:00 , Karl MatchettAlmost half of all businesses across the UK now want staff back in the office on a full-time basis, in a push to pre-pandemic arrangements.
The shift away from working from home has ramped up this year in the financial and retail industries, with the likes of HSBC and Boots pushing some staff to return to office an additional day per week, or even on a full-time basis. Some have linked office attendance to bonus pay or insisting they work at least one Monday or Friday each week to avoid empty offices.
A survey by the British Chambers of Commerce (BCC) of more than 500 businesses now shows many businesses across the nation are following the same pattern – despite one in ten businesses (9 per cent) reporting that staff have quit over a lack of flexible working.
Nearly half of UK businesses want an end to working from home
Business and news - 8 August
16:30 , Karl MatchettThat’s it for today - thanks as always for joining us this week and hope you all have great weekends.
We’ll be back as usual on Monday for more business, companies and financial news, the latest on stock market movements and everything that affects your personal money situations!
