Marketing Newscast

(Edited 16 April 2025)

Prime Minister Sir Keir Starmer is being accused of squandering Britain’s ‘Brexit bonus’ and putting a potential trade deal with the USA at risk, after a Bloomberg report claimed he is looking to align with EU rules on fresh food and veterinary products, so both countries can trade freely without border checks on such goods. Such a pact would solve the thorny problem of having to maintain customs checks between Britain and Northern Ireland but it would also see some UK food standards placed under the jurisdiction of the European Court of Justice and prevent the import of some American products. Clearly, the former is anathema to Brexiteers, and any attempt by the UK to align more closely with the EU would not go down well at The White House, which, under US President Trump, has made crystal clear its distain for the EU, which it claims has “raped and pillaged” the USA for decades. The issue is to be discussed at a UK-EU summit in London on 19^th May, as part of the Labour Government’s so-called ‘reset’ with the EU. Talks will also include a potential deal can on defence and security and wider collaboration between the nations on efforts to support Ukraine against Putin, the news agency said, as well as controversial discussions on fishing quotas. Areport in the Independent said plans for a so-called ‘youth opportunity’ scheme allowing young people freedom of movement between the UK and the EU is also on the table. Bloomberg quoted a UK government spokesperson as saying: “A closer, more cooperative relationship with the EU will improve the British people’s security, safety and prosperity. We will act in Britain’s national interest and we have been clear there will be no return to freedom of movement, the customs union or the single market. We will not provide a running commentary on talks.”

In response to the reports, David Frost, who led the Brexit negotiations under former Prime Minister Boris Johnson, warned Starmer could kill off hopes for a free trade deal with the US if he pushes ahead with this proposal, because the US would want access to the UK food market. He told The Telegraph: “We would be selling away our ability to set our rules for no real benefit and meanwhile making it more difficult to do FTAs [Free Trade Agreements] with the countries that we don’t have them with – notably America”. Reform UK leader Nigel Farage also told the newspaper: “If we are going to align with the European Union on food standards and veterinary standards, then we’re going to make life for America very difficult, maybe impossible. It is a very, very silly thing to do in a world that is fast changing. What I prioritise is keeping our hands free. Long term, financially, America is a much bigger goal.” Shadow foreign secretary Priti Patel said X: “Labour’s Brexit betrayal has begun. They spent every day in opposition blocking Brexit. Starmer and his government are sabotaging our Brexit freedoms and surrendering our sovereignty. They want to impose EU laws on us through the backdoor, make Britain a rule-taker and subject us to ECJ decisions” Shadow business and trade secretary Andrew Griffith said: “This is what was always hiding behind Labour’s Trojan Horse EU surrender Bill – a back door straight back into the EU. They tried 38 times to undo Brexit, and now they’re trying a 39th. It’s a blatant betrayal of British interests and freedom to make our own rules.”

Inflation fell to 2.6% in March, from 2.8% in February, according to this morning’s Office for National Statistics (ONS) data. The decrease was driven primarily by a drop in the price of motor fuels, but the cost of recreation and culture activities also fell, with toys, games, and hobbies falling especially sharply. "The only significant offset came from the price of clothes which rose strongly this month," said Grant Fitzner, chief economist at the ONS. Core inflation, which excludes energy, food, alcohol and tobacco came in at 3.4%, down from 3.5%. Chancellor Rachel Reeves said on X: “Inflation falling for two months in a row, wages growing faster than prices and positive growth figures are encouraging signs that our Plan for Change is working. But, I know many families are still struggling with the cost of living and this is an anxious time. That is why the Government has boosted pay for three million people by increasing the minimum wage, frozen fuel duty and begun rolling out free breakfast clubs in primary schools”. However, the dip is expected to be short-lived as this month brought with it a sharp increase in the costs of many goods and services as a consequence of annual price hikes at the beginning of the new tax year. That minimum wage increase, as well as the impact of the rise in employer national insurance, is also likely to fuel inflation because businesses have increased prices to cover their extra costs. Independent economist Julin Jessop said this morning: “Inflation is still set to rebound to at least 3% in April, led by energy and water bills and the pass through of higher labour costs. Nonetheless, the peak should now be comfortably below the 3.7% expected by the Bank of England and OBR (Office for Budget Responsibility). In the meantime, the latest jobs data confirms that the labour marketis cooling. Moreover, money and credit growth remain too weak for any pick up in headline inflation to be sustained. The main uncertainty now is the fallout from the global trade war on both demand and supply. The net effect on UK inflation could still go either way. But the immediate impact has been to depress global energy prices, which are now much lower than the Bank of England had assumed. The upshot is that the Bank now has the green light to cut interest rates again in May”. Separate data from the ONS suggests an average rise in wages of 5.9%. However, job vacancies have fallen to the lowest level in nearly four years, suggesting demand for workers is weakening as employment costs grow. The number of job vacancies fell to 781,000 in the first three months of the year, the ONS said. Payroll numbers also declined.

Small business owners are quitting Britain because of higher taxes, soaring costs and red tape, according to a survey of 200 owners commissioned by Handelsbanken Wealth & Asset Management. Nearly two in five owners of small and medium-sized firms (SMEs) have either left the UK or are considering an imminent departure, the survey found, saying better financial conditions in other countries appealed to them. Spain topped the list of firms’ most desirable destinations, followed by the United States and France. Dubai was also seen as a place owners wished to move to.

11m Brits will begin paying the basic rate of income tax by April 2028 as a consequence of Rachel Reeves’ freeze on income tax thresholds until then, official data suggests, with the majority of those affected being aged over 60. A 20% tax is levied on those with an income of between £12,571 and £50,270. The total tax burden is also projected to soar to a share of nearly 38% UK GDP, a post-war peak, with no signs of it coming down in the near term under the Labour Government. The data, obtained via a Freedom of Information request to HMRC by financial advisory firm Quilter, also showed some 1.4m more people will be paying the highest tax rate of 45% within the same time frame; this applies to people earning more than £125,140 a year. “The lengthy freeze is resulting in a significant tax rise by stealth,” said Quilter expert Rachael Griffin. “As the state pension rises while the personal allowance remains stagnant, many pensioners will soon find themselves having to pay back a proportion of their state pension.” Although Reeves has promised not to increase income tax, the band freeze has a similar effect by dragging people into either a higher band or into paying income tax.

And could your higher income mean you will be forced to pay more for your gas and electricity in future? Ofgem CEO Jonathan Brearley is mulling precisely that possibility, having floated the idea that middle-class families could face higher energy bills than poorer households to fund the transition to net zero. He told an industry event yesterday that the regulator would launch a review of bills this summer that would look at whether to “do something related to income”.

London-listed banknote printer De La Rue has agreed to be bought by US investment firm Atlas in a £263m deal. Under the terms of the acquisition, Atlas will pay 130p per share, which is a premium of approximately 19% to the closing share price on 11^th December 2024, the last day before the start of the offer period.

Trade wars latest: China has instructed its airlines to stop taking deliveries from Boeing; sources told Bloombergthat officials had also requested Chinese carriers halt purchases of any aircraft-related equipment and parts from US companies. The move will be a major setback for Boeing, which is believed to have around ten 737 Max aircraft scheduled to enter China’s aircraft fleet, and because China’s aviation market is projected to become the largest globally by 2043, surpassing North America and Europe to a value of around $61bn (£46.1bn), the news agency said. The move followed Beijing's announcement of new retaliatory trade tariffs; it has raised the total levy on US goods to 145%, in response to tariffs imposed by Washington. Meanwhile, Nvidia, the world’s most valuable semi-conductor chip maker, says it will take a $5.5bn (£4.1bn) hit because of the trade war between the USA and China. Nvidia said it had been informed on Monday that it would need a licence to export its high-powered H20 technology to China “for the indefinite future”.