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Government borrowing costs have reached new post-election high ahead of budget
By Sarah Taaffe-Maguire, business reporter
Talking about the cost of government borrowing is tricky and is about to get trickier.
The interest rate the state has to pay on a key way of raising money, through issuing government bonds to investors, has mostly been rising over the past six weeks.
Bonds are issued for a set period of time, from three months to 50 years, and work like a kind of loan.
Markets determine that interest rate, so how much investors are charging can tell us about how they’re receiving policy announcements and economic data.
Higher interest rates on borrowing make having debt pricier and can deter a state from funding investment in public services.
There are lots of things that determine the interest rate, known as the yield, on UK government bonds, called gilts.
Exactly what is moving the yield is a matter of debate – but since last week, when reports of Chancellor Rachel Reeves imminently breaking her spending rules emerged, there was a spike in the benchmark 10-year gilt yield, a spike which has today been surpassed for the second time this morning.
That could be because of fears over Ms Reeves’s extra borrowing, which could be worth billions. The yield is now the highest since before Labour came into power on 4 July at 4.282%.
Or it could be that the UK is affected by the same forces as the US which, similarly, has seen its 10-year bond yield rise steeply this month and hit 4.3%.
It’s come as the polls are tied for the US presidential election, meaning the possible introduction of inflationary policies by Donald Trump.
The 10-year UK bond yield tracks the US 10-year as there’s an assumption the Bank of England will track the US central bank the Federal Reserve in cutting rates.
It’s going to be even harder to clearly work out how the UK bond yields respond to the budget tomorrow as the US election looms closer.
Crucially, though, at the exact same time Ms Reeves will stand up in the Commons, the US – the world’s biggest economy – will announce economic growth figures.
Elsewhere, a slight lessening of Iran-Israel tensions has kept the oil price below $72 a barrel for the second day in a row.
High rewards for shareholders at Europe’s largest bank, HSBC, brought its share price to a six-year high. It is the biggest riser on the FTSE 100.
Overall the index is up 0.36% but the bigger and more UK-focused FTSE 250 is down 0.39%.
Sterling has fallen just off the recent highs against the euro and the dollar, though currencies tend to be strengthened by higher bond yields. A pound can buy €1.1997 and $1.2982.
Reeves to announce above-inflation increase to minimum wage – reports
Rachel Reeves could announce an above-inflation rise to the minimum wage when she delivers her first budget tomorrow, reports suggest.
It’s believed the chancellor will raise the minimum amount by up to 6% for more than a million low-paid workers next year.
The changes would follow the new government’s instruction to the Low Pay Commission, which recommends minimum wage rates, to include the cost of living in how it works out the rate.
A 6% rise would up the wage for people aged 21 and older to around £12.12 an hour – in line with the commission’s forecast last year.
Ms Reeves is also expected to announce a larger increase for younger workers aged 18 to 20 in a bid to bring their rate closer to the adult wage.
The minimum wage rose by more than 9% a year in 2023 and 2024 as high inflation hammered the country, in an effort to meet the previous government’s target of raising rates to two-thirds of median earnings.
A Treasury spokesperson told the Guardian they would not comment on speculation outside the budget.
Earlier this year we reported on how differences in the minimum wage affect those aged 18 to 20:
How budget could make things worse for millions of working people
By Saywah Mahmood, data journalist
Lowri Williams is struggling to cover her basic expenses. Earning a low income with very little support, she says she feels like she’s “living hand-to-mouth” and barely getting by.
She’s one of a large group of people in low-income households who are caught in a precarious position, earning too little to comfortably support themselves, but too much to qualify for significant financial help.
For people like Lowri, working more or earning a higher income could mean losing vital support like Universal Credit, leaving them no better off and in some cases even worse off.
Higher tax bills for the lowest paid
Lowri’s salary is not high enough to pay tax. But there’s a wider group of low-income earners who are facing a heavy tax burden.
Sky News analysis has found that in the last three years, working people in the bottom 25% of earners have effectively had a 60% tax hike.
This is due to the freeze on personal allowances, introduced in 2021 and scheduled to end in 2028. For each year the freeze is enacted, earners effectively see their tax rates rise in real terms as a higher proportion of their income becomes taxable.
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You can read our report telling Lowri’s story here…
Thousands of Oasis tickets set to be cancelled for terms and conditions breaches
Thousands of Oasis tickets listed on unauthorised sites will start to be cancelled “in the coming weeks”, promoters have warned.
There was huge demand when they went on sale and many fans were angry at being stuck in online queues for hours only to miss out or find prices had rocketed.
People trying to sell their tickets for a profit are breaking the terms and conditions of sale.
Tickets will be cancelled by Ticketmaster or See Tickets and made available again at face value – with details to be announced shortly.
Read the full story here…
Dental product bought by millions is complete waste of money, dentist says
Off-the-shelf whitening products are a complete waste of money, a top dentist has told Money.
Specialist orthodontist Dr James Davies, who owns Quayside Orthodontics in Carmarthen, explained why in his opinion you should take them out of your shopping basket.
“Off-the-shelf whitening is a gimmick – toothpastes, mouthwash, charcoal. All nonsense,” he says.
“The whitening products are too weak.
“You have hydrogen peroxide 6% prescription only – everything else is pointless.
“Anything containing or releasing more than that in the UK is illegal.
“There are products containing less than 0.1% hydrogen peroxide available to consumers over the counter.”
Dr Davies says any impact would be minimal – and “probably placebo”.
Can you park on a single yellow line? This, and other on-street parking rules, decoded
It’s estimated that your car will spend only 4% of its lifetime in motion.
That means that for the rest of the time, the handbrake will be up, and it’ll be parked.
For a lot of that time – around 73% – your car will be parked at home. It might be in a garage, private car park or on a driveway.
That leaves roughly 23% of the time that our cars are parked at other destinations.
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Off-street parking, at places like shopping centres, residential complexes and airports, is usually a pretty simple procedure. Grab a ticket or a token at the barriers, find a bay to park your vehicle, then pay when you leave.
For on-street parking, things get a little trickier. There are myriad rules and regulations to follow if you want to park your car on the street.
And if you fail to comply, it can really hurt your pocket.
According to figures from the UK government, the total income received from on-street parking in 2022-23 in England was £1.17bn, 9.5% higher than in 2021-22.
That income is derived from three main sources: meters (ticket machines and apps), residents’ and business permits, and penalties.
Below, we’re looking through some of the most common road markings, signs and parking zones you could come across when looking to park your car on the street – to help you avoid hefty fines.
Single yellow lines
No waiting, parking, loading or unloading at the times shown on the accompanying sign.
The restrictions can be lifted during evenings and weekends, but you must check signs around before parking.
If you’re a blue badge holder, you can park on single lines for a maximum of three hours, provided there isn’t signage to say otherwise, and it is not causing an obstruction for others.
Double yellow lines
The best bet is to assume you can’t park there at any time.
You might be allowed to quickly stop to load or unload heavy goods. Or, if you’ve got a blue badge, you could park for up to three hours, provided there isn’t signage to say otherwise, and it is not causing an obstruction for others.
Single red lines
Single red lines mean you can’t park, stop or load during specified time periods that should be displayed clearly on surrounding signs.
Double red lines
A double red line means no stopping, parking, or loading at any time.
You may only stop here in an emergency or to set down or pick up a blue badge holder – the badge must be displayed clearly, and you must move off promptly.
Single white lines
Where the road has a solid, unbroken white line running along the side, parking is considered legal.
In some cases, the single white line is there to indicate that there’s no pavement – if this is the case, then it’s illegal to park there.
Zigzags
White zigzags are commonly found either side of pedestrian crossings. They are designed to indicate that parking and overtaking in these zones is strictly prohibited.
The same rule applies to yellow zigzag lines, which are found outside schools, hospitals, police and fire stations.
Their purpose is to provide pedestrians, children and staff a clear, unobstructed view of the road in front of them.
Can I park on residential streets?
Many residential streets will have on-street parking bays marked out. However, these are often only for permit holders. That means you need to live in the area, pay for a permit and display it in your vehicle to park there.
Some permit parking restrictions only apply during certain hours of the day or days of the week. Check the signs.
What about on bank holidays?
Some might assume restrictions on parking don’t apply on a bank holiday. This is wrong.
Unless signs state otherwise, it is always best to follow the usual rules.
Signs
A general sign with a “P” by itself means parking is allowed without a time limit.
It’s common for restrictions to apply on particular days of the week or only during the main part of the day. Outside the times shown, you may park free of charge.
In the image below, parking limits apply during the period shown on the sign. This sign indicates you are allowed to park for 30 minutes between 8am-6pm Monday to Friday.
At any time outside the specified periods, parking is allowed with no time restrictions.
Parking zones
The British Parking Association outlines four different types of parking zones in the UK, namely:
Controlled Parking Zones (CPZ)
- This is where waiting and loading is restricted for some or all of the time. Local authority websites will have details of CPZs in operation in their area, along with details of who is eligible for a permit and how to obtain one.
Restricted Parking Zones (RPZ)
- This is where waiting and possibly loading restrictions might be applied, even though there are no yellow lines. The times of operation will be stated on signs upon entry and within the zone.
Permit Parking Areas (PPA)
- This is an area in which you must have a stated type of permit to park during its hours of operation. You must display the permit, even though there are no parking bays or road markings.
Pedestrian Zones
- These are areas that you must not enter during operational hours. Even outside these times, there might be loading and waiting restrictions, which will be stated on the bottom panel of the entry zone signs.
Read more in our Basically series…