HSBC profits surge by a third to £7.2bn, sparking fresh calls for Healey to hike bank taxes in Wednesday's Budget
John Healey, who resigned as Chancellor in June demanding Britain reach 3% of GDP on defence by 2030, now says the timetable will wait for next year's spending review.
Britain sold £4.5bn of five-year gilts at a yield of 5.036 per cent on Tuesday — the highest rate since the 2008 financial crisis — piling pressure on John Healey just hours before his maiden Budget. UK borrowing costs are now the highest in the G7, outstripping even France, with economists warning Healey risks a repeat of Liz Truss's market-spooking mini-Budget if spending plans alarm investors. The surge is driven partly by the global inflationary impact of the US-Iran war, which has pushed bond yields higher across developed economies.
UK gilt yields are the highest of any G7 economy despite an IMF-lauded deficit reduction plan.
The auction was 3.5 times oversubscribed, as investors chased high yields — but rising debt costs erode Healey's already tight fiscal headroom.
Senior nurses and police officers face being dragged into the £100,000 income tax trap, adding to fears that the Budget will squeeze working professionals.
