Reeves: those with the broadest shoulders should pay their fair share of taxes
Heather Stewart
Over in Washington, Rachel Reeves is huddled with Britain’s top economics journalists on the sidelines of the Annual Meeting of the International Monetary Fund.
My colleague Heather Stewart is there, and reports that the chancellor explained she was keen to “get the balance right” on taxing wealthier UK residents, as she hinted in yesterday’s Guardian interview she will do.
Reeves said:
“We have got to get the balance right and I do think if Britain is your home you should pay your taxes here.”
The chancellor added:
“I do think that those with the broadest shoulders should pay their fair share of taxes.”
Key events
Reeves: I’d like more budget headroom, but there are trade-offs
Heather Stewart
The chancellor then confirmed that she would like to use the budget to build up more headroom against her fiscal rules – but stressed that this would be difficult, because it requires higher taxes or deeper spending cuts.
She told UK journalists in Washington, D.C.:
“If you’re asking me would I like more headroom, of course I would, but that comes with trade-offs.”
Pointing to jittery bond markets, she said, “a greater buffer against that volatility would be helpful.”
[Reminder, we reported last week that the chancellor was looking for extra headroom in the budget, to provide a larger cushion to keep within her fiscal rules]
Reeves: Want to ensure Britain is a great place to do business
Reeves was also asked whether she would levy new taxes on banks in the budget.
In reply, she stressed the importance of maintaining a competitive environment, saying:
“We want to make sure that Britain is a great place to do business and to bring in business. Financial services is one of our success stories in the UK.”
Confronted with research from UK Finance suggesting UK banks are already more heavily taxed than their rivals, she did not demur.
Reeves: those with the broadest shoulders should pay their fair share of taxes
Heather Stewart
Over in Washington, Rachel Reeves is huddled with Britain’s top economics journalists on the sidelines of the Annual Meeting of the International Monetary Fund.
My colleague Heather Stewart is there, and reports that the chancellor explained she was keen to “get the balance right” on taxing wealthier UK residents, as she hinted in yesterday’s Guardian interview she will do.
Reeves said:
“We have got to get the balance right and I do think if Britain is your home you should pay your taxes here.”
The chancellor added:
“I do think that those with the broadest shoulders should pay their fair share of taxes.”
NIESR predicts growth of 0.3% in Q3
Economic research group NIESR has cut its forecast for UK growth in the last quarter, following today’s GDP report.
NIESR now expects GDP to grow by 0.3% in the third quarter – a downward revision from our previous forecast, followed by 0.4% in the fourth quarter of this year.
They say August’s “disappointing monthly growth outturn” comes amid fragile demand conditions and continued uncertainty among businesses and households.
#GDP grew by 0.3 per cent in the three months to August. This was driven by growth in #services, #construction, and #agriculture over the three-month period which offset falling production output.
2/6
— National Institute of Economic and Social Research (@NIESRorg) October 16, 2025
The #growth outturn for the month was unimpressive at 0.1 per cent, reflecting broad-based stagnation in services while positive growth in #production was partly offset by falling construction activity.
3/6
— National Institute of Economic and Social Research (@NIESRorg) October 16, 2025
We project 0.3 per cent #GDP growth for the third quarter – a downward revision which reflects the disappointing monthly outturn for August.
4/6 pic.twitter.com/1rac1NfsmT
— National Institute of Economic and Social Research (@NIESRorg) October 16, 2025
High-frequency indicators and survey data continue to point to subdued confidence among businesses and households. The #Budget is an opportunity for the government to restore confidence and quell uncertainty, for example by committing to a larger fiscal buffer.
5/6
— National Institute of Economic and Social Research (@NIESRorg) October 16, 2025
TSMC, the world’s biggest producer of advanced chips, has raised its full-year revenue forecast on Thursday thanks to a bullish outlook for spending on artificial intelligence.
TSMC said it expects robust artificial intelligence demand to continue, as it raised its 2025 revenue guidance to mid-30% growth in U.S. dollar terms from around 30%, and maintained its forecast for capital spending at up to $42 billion for 2025.
The company also posted a record profit that blew past market estimates, which may calm some concerns that the AI sector is a bubble poised to burst.
Here’s an interactive chart showing how the UK economy has fared each month over the last two years:
Switzerland cuts growth forecasts as US tariffs bite
The Swiss government has cut its 2026 economic growth forecast, due to the impact of US tariffs.
Switzerland now expects economic growth of just 0.9% in 2026, below the 1.2% growth forecast in June, as Donald Trump’s tariffs put a burdens on Swiss exporters
The State Secretariat for Economic Affairs says:
“The additional tariffs are placing a heavy burden on affected sectors and export-oriented companies, with significant ripple effects expected across the broader economy.”
Nestlé to axe 16,000 jobs as new chief targets sales growth
Mark Sweney
Grim news from Nestlé – it is planning to cut 16,000 jobs over the next two years as the owner of KitKat and Nescafé attempts to reduce costs and increase sales.
The Swiss-headquartered multinational said the cuts would include 12,000 white-collar professionals and 4,000 in its manufacturing and supply chain, close to 6% of Nestlé’s global workforce.
“The world is changing and Nestlé needs to change faster,” said Philipp Navratil, the new chief executive. “This will include making hard but necessary decisions to reduce headcount over the next two years. We will do this with respect and transparency.”
Navratil, who replaced Laurent Freixe last month after he was fired for failing to disclose a romantic relationship with a subordinate, announced an acceleration of his predecessor’s cost-saving plan to free up cash.
British lenders don’t expect a pick-up in demand for mortgages in the rest of this year.
New Bank of England data shows that demand for mortgages is expected to remain unchanged in the last three months of 2025.
The BoE’s quarterly Credit Conditions Survey also showed lenders expected overall demand for unsecured lending to be unchanged in the fourth quarter.
No change: secured lending for house purchase remained consistent in Q3, while demand for remortgaging increased and is expected to rise again in Q4 as more borrowers run out of the once cheap borrowing line. pic.twitter.com/wCjKGog2oZ
— Emma Fildes (@emmafildes) October 16, 2025
The UK stock market has made a slightly weak start to trading, with the FTSE 100 share index down 0.15% at 9409 points.
Hotel chain Whitbread are leading the fallers, down 8% as the company behind the Premier Inn chain failed to impress the City with its latest results.
Whitbread reported a 2% drop in revenues in the 26 weeks to 28 August 2025, and a 7% drop in adjusted profits due to “broadly flat UK total accommodation sales and positive momentum in Germany”.
Chris Beauchamp, chief market analyst at IG, says Whitbread shares have fallen out of bed after this morning’s results, adding:
“Investors had clearly expected better service from Whitbread, with the shares down sharply in early trading. However, it does look like a work in progress, with a steady shift to more profitable operations underway, but it seems that Whitbread might be at risk of overpromising and underdelivering, signalling it needs to manage its next few updates rather carefully”.
As well as downgrading UK GDP in July to a 0.1% fall, from 0% growth, the ONS has also trimmed its growth estimates for January-April:
But there’s better news: Kallum Pickering, chief economist at UK investment bank Peel Hunt, has spotted that growth since the Covid-19 pandemic has been stronger than previously thought:
The soap opera in UK data continues. Latest monthly GDP, which includes revisions to the series which goes back to 1997 shows GDP 5.5% above its Jan 2020 pre-COVID level, instead of 4.4%. Has far reaching positive implications for trend growth and productivity estimates… pic.twitter.com/1BjyK1rXkQ
— Kallum Pickering (@KallumPickering) October 16, 2025
The pound has risen slightly this morning against the US dollar.
Sterling is up 0.1% at $1.3414, away from the two-month low hit earlier this week.
The dollar is generally a bit weaker, after US president Donald Trump said the US was locked in a trade war with China.
