Economics THE WorLD IN BrIEF December 2024 asos introduces return fees Trump's tariffs & the uK economy Nissan to lay off thousands & More. . . National Insurance Hike Implications
November 2024 Geoff riley Talk The uK Economy By Armaan The UK’s economic landscape is facing unique challenges and complex dynamics as outlined by economics expert Geoff Riley in a recent talk. Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools such as Eton. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas for Tutor 2u who have over 30 million users annually and 1.56 million subscribers on their YouTube account. Riley provided insights into the October 2024 budget, the UK’s position in a changing global economy, and potential future risks. Here’s a closer look at key points from his talk and their implications for the UK economy. The 2024 Budget and Taxation Shifts Rachel Reeves MP, the first female Chancellor of the Exchequer, has advocated for “modern supplyside economics” also known as “securonomics”, focusing on both government spending and tax adjustments. The 2024 budget commits an additional £70 billion on current and capital government spending before 2029, partially funded by over £40 billion in tax increases - the largest increase since 1998. The significant revenue sources include; Income Tax (£303 billion), VAT (£203 billion) and National Insurance Contributions (£168 billion). However, in its general election manifesto, Labour promised not to increase taxes on working people - explicitly ruling out a rise in VAT, National Insurance or income tax. These measures signal a substantial shift in fiscal policy, aimed at addressing various economic pressures, yet raising taxes could reduce economic growth and consumer spending. A Slow-Growth Economy: The UK’s Potential Growth Rate The UK’s economic growth potential remains low, with the Office for Budget Responsibility (OBR) estimating a 1.7% annual growth “speed limit.” The ongoing low-growth equilibrium suggests limited capacity to boost productivity. Simultaneously, the Bank of England has forecast a target inflation rate of 2% over the next five years. Furthermore, the Bank of England thinks that the Budget and a weakening of Sterling will add around 0.5% to inflation so they expect the path of interest rate reduction in 2025 to be moderate; however, the Bank of England cut interest rates by 0.25% to 4.75%. Moreover, real wages are struggling. Despite an 8% nominal pay rise (with minimumwage rising to £12.21), inflation has eroded real purchasing power, the inflation hurt outweighs the nominal wage gain, so there has been a real wage shock and regular (real) pay has decreased. People hate losses more than they like wins therefore, this has led to rising discontent among the workforce. Global Positioning and Emerging Economies Riley emphasised the shifting balance in the global economy. Emerging markets and developing economies nowmake up 58.82% of the world’s GDP in 2023 (adjusted for PPP), while advanced economies like the UK and the US lag behind. China leads with 18.73% of global GDP, followed by the United States at 15.56% and the UK at just 2.23%. This highlights the UK’s limited role in the global economy and suggests that growth opportunities lie in improving trade relations with the EU, the East such as China, South Korea and Vietnam as well as by joining a single market, especially given the volatility in established Western markets like the USA. Debt, Borrowing and Interest Rates The UK currently has a national debt exceeding 100% of its GDP, the UK tax burden climbs to a 77 year high because borrowing during the pandemic years (2020-2021) reached nearly £1 billion a day. Servicing this debt is costly, with debt interest alone costing the UK £2 billion per week, or about 2.47% of GDP. Rising interest rates worsen the debt burden; the current yield curve (interest rate on a bond) shows that a one-year government bond costs the government 4.5%. For the public, the average interest on overdrafts has soared to 35% compared to 7% on personal loans worth £25,000. Furthermore, there has been a mortgage shock because average UK mortgage interest rates have increased, in February 2024 there was £1.5 trillion of mortgage debt, 6% of GDP adding to financial strain on households. A decade of low interest rates is over, there was a big rise in response to cost of living to 5%. Now interest rates are just under 4.75% because the Bank of England is cautious about cutting interest rates and raising tax as it is not good for growth. Consumer and Business Confidence The cumulative effect of rising living costs, inflation and high-interest rates has left UK consumer confidence fragile as consumer confidence is starting to fall back again after the cost of living crisis. Riley noted that while the Sterling had strengthened against the Dollar over the last two years, it is starting to fall. With the cost of resources rising for businesses due to currency weakness and the rise in employers national insurance by 1.25%, business confidence has taken a hit, leading to concerns about future investments and growth. Effect of Donald Trump’s Victory on the UK economy Riley warned of the potential consequences if Donald Trump returns to the White House. A Trump 2.0 administration could impose a 60% tariff on Chinese goods, potentially triggering a renewed trade war that would further slow global growth. The National Institute warns that tariffs could more than halve the UK’s already low economic growth rate. This could lead to supply chain disruptions, increased costs for businesses and further challenges for the UK economy. Brexit’s Long-Term Impact and Riley’s Calls for Labour Policy Reassessment Brexit continues to cast a long shadow, the economic consequences of leaving the EU will take 30-40 years to mature and it has already shaved 0.5% of the UK’s growth. Riley argued that Labour’s 5 year plan to not join the EU’s single market is a poor decision, with profound consequences for growth and trade Riley believed it is “the biggest single economic act of self harm in the last 2,000 years”. Also, Riley believes Labour’s decision to not restore free movement for students is “the biggest shock since the Brexit referendum”. Post-Brexit, the UK’s export-toimport ratio has fallen by 8%, because trade barriers and costs diminish incentives to export. Businesses are also shifting operations to taxfriendly locations such as Ireland and Jersey, costing the UK an estimated £6-8 billion annually in lost revenue. Geoff Riley explained that he believes Rachel Reeves should’ve raised base interest rates by 1-2% and lifted frozen allowances to stabilise growth without increasing the tax burden on VAT, National Insurance or income tax which they promised not to increase in their manifesto. Furthermore, Riley stated “the UK economy is on an interconnect between chaos and chaos has just been elected”. In conclusion, the UK’s economic outlook remains turbulent, with structural issues due to recent labour fiscal policies, a challenging global environment and Brexit’s enduring impact. Geoff Riley’s analysis sheds light on the complexities faced by the UK, including the balancing act between promoting growth and managing rising debt, tax burdens and inflation. The 2024 Budget introduces substantial shifts in spending and taxation, yet concerns persist about its long-term effects on growth and consumer confidence. Furthermore, as emerging economies are playing an increasingly dominant role in global GDP the UK’s decision to distance itself from the EU’s single market risks limiting its economic opportunities, especially as Brexit’s economic consequences unfold over the coming decades. Riley underscores the importance of navigating these external and internal challenges through strategic policies that support sustainable growth, suggesting that Labour’s approach may need re-evaluation to better position the UK in an interconnected global economy.
In the 2024 budget, the Labour government decided to raise National Insurance contributions for employers, a move aimed at addressing the UK’s fiscal challenges. rachel reeves' National Insurance Hike: Implications for Businesses and Employment By Michael While it is expected to generate substantial revenue for public services, the policy has sparked concerns among small businesses and many industries struggling with rising costs. Critics fear the changes could lead to closures and job losses, potentially undermining the government’s broader economic goals. What is National Insurance? National Insurance (NI) in the UK is a system of contributions paid by both workers and employers to fund state benefits and services. These include healthcare (NHS), pensions, unemployment benefits, and other social welfare benefits. It is paid by employees, employers and the selfemployed across the UK. However, those over the state pension age do not pay it, even if they are employed. Currently, businesses pay a rate of 13.8% on employees’ earnings above a threshold of £9,100 a year. In the Budget, Chancellor Rachel Reeves said that this rate would increase to 15% in April 2025, and the threshold would be reduced to £5,000. The employment allowance, which allows companies to reduce their NI liability, will increase from £5,000 to £10,500. Reeves has said that the changes would raise £25bn a year by the end of the forecast period covered in the Budget. Impact on Small Businesses This hike affects businesses of all sizes, but it is particularly challenging for small and medium sized-enterprises (SMEs) that already operate with tight profit margins. SMEs are expected to face considerable challenges in absorbing these additional costs, which could result in business closures or downsizing. This is highly concerning for the UK economy, where 99.9% of UK private sector businesses are SMEs. SMEs are also responsible for 50% of GDP and 60% of employment in the UK private sector. Evidently, The Federation of Small Businesses (FSB) has warned that over 50,000 jobs could be at risk with this hike, with SMEs collectively shouldering an additional £5.7bn in costs. For example, a small business employing someone on the national living wage, will see their National Insurance contributions rise by around £241 a year for each member of staff. This rise may seem relatively inconsequential, but depending on the number and level of employees, the figure can become substantial for companies very quickly. With other financial pressures like increased labour costs and Brexitrelated supply chain disruptions, this increase could discourage hiring, lead to reduced hours, or force layoffs, potentially resulting in up to 350,000 jobs lost across the sector. Hospitality and Retail under Pressure In particular, the hike has sparked growing concerns across the hospitality and retail industries. Hospitality bosses have warned that the hike could force businesses to close or significantly scale back their operations. A survey from the British Hospitality Association suggests that one in five businesses in the sector may be forced to shut down due to the increased financial strain. This will likely result in widespread job losses, particularly in the restaurant, pub and hotel industries, where many low-wage workers are employed. In regions with high concentrations of hospitality businesses, the loss of jobs could damage consumer spending, further impacting small businesses and local services. As more workers face job insecurity or unemployment, there will be increased demand for social services, with the government potentially facing higher demand for welfare support, straining the already limited public finances. The Government’s Justification In deciding to implement the National Insurance hike, Chancellor Rachel Reeves stated that the primary aimwas to generate substantial revenue to fund public services and government policies. With the UK facing growing fiscal pressures - particularly due to demographic challenges increasing demands on healthcare, pensions and social welfare - the Labour government has new ways to balance the budget and ensure financial stability. From the expected £25 billion to be raised annually, a major portion will be directed towards the National Health Service, where Reeves committed to a £22.6bn increase in day-to-day health spending. This is part of a broader effort to tackle the long NHS waiting lists, which currently stand at over 6.7 million people, and to modernise NHS facilities, many of which are in dire need of repairs. Contradictions and Alternative Solutions. While this move reflects the Labour government’s need to address fiscal demands, it also appears in contrast to previous manifesto commitments, where the party pledged not to increase income tax, VAT, or National Insurance for individuals. This measure, some argue, could be seen as a necessary compromise given the financial pressure, however others have pointed to the different possible measures that could have been undertaken. The opposition party, the Conservatives, have largely advocated for cuts in public sector spending, opposing the implemented ‘inflationbusting pay rises’ for public sector workers, while some economists have recommended focusing on corporate tax reforms or reducing high-income tax reliefs, as alternatives to generate revenue without hurting businesses. The Future of Businesses and Workers Overall, while the revenue from the National Insurance hike may help address the UK’s immediate and future financial needs, it raises valid concerns regarding the economic strain on businesses, particularly those already struggling to recover from past economic disruptions. The impact of this policy will depend on whether the government can effectively manage its finances while also supporting businesses and workers in an increasingly challenging economic landscape.
Introduction The UK government has announced a new flat tax on vaping products, which is set to take effect in October 2026. The Labour government’s new policy, as part of the wider health initiatives, aims to reduce the number of non-smokers from picking up vaping. The new tax in place raises the cost of vape liquid by 220%, from £1 to £3.20. Is this enough to deter existing and potentially new vapours from this harmful behaviour. The Economics behind the decision The introduction of the vape tax is an example of using price as a deterrent. This is known as the “Pigouvian tax,” where the government raises the price of a good or service that has negative externalities—unwanted effects that are not included in the economic activity. By raising prices, policymakers hope to discourage consumption. The tax aligns with the basic vape Tax - Can higher prices deter young people from vaping? By oliver & Ben principle in economics of supply and demand. As the price of a product goes up, demand generally falls. Here, policymakers are counting on this demand-price relationship to push vaping out of the reach of young people who may find the increased cost unappealing. Benefits While the main aim of the new tax is to reduce consumption, there’s also an increase in revenue generation intended to support public services like the NHS. In this way, the tax serves a dual purpose. It discourages vaping while providing additional financial resources to offset healthcare costs associated with smoking-related illnesses,such as lung cancer. Reducing the want for vapes The previous Conservative government initially proposed a three-tiered tax structure, which applied higher rates of tax to liquids with greater nicotine content. This attempt was abandoned due to concerns over its complex nature and administrative challenges. While the flat rate simplifies administration and is easier to understand, it carries consequences for consumer choice. Heavy users, who may depend on higher nicotine concentrations to quit smoking, now face the same rate as those using lower concentrations. The UK Vaping Industry Association has highlighted that this could make vaping less appealing as a safer alternative for smokers looking to quit. Conclusion In conclusion, the UK government’s new flat tax on vaping products aims to reduce vaping consumption through economic suppression while generating revenue for public services. While the simplified tax structure offers efficiency, it raises concerns about its impact on heavy users who rely on vaping as a smoking device. Interest rates Fall to Lowest Since August 2023 By Sol & Krish The Bank of England (BoE) has dropped interest rates down to 4.75%, down from 5.00% signalling this will be the last cut before the new year. This new change in rates is a sign of confidence by the BoE that they are managing to stay on their current target, as most notably inflation fell to 1.7% - the first time it dropped below the bank’s 2% target since 2021. The BoE Governor, Andrew Bailey, stated that “We need to make sure inflation stays close to target, so we can’t cut interest rates too quickly or too much.” Adding that if the economy “evolves” as quickly as expected, that it’s likely that “interest rates will continue to fall gradually from here.” So what does this mean for your bank account? Well, higher interest rates make it more attractive for people to save money in their accounts, allowing them to accumulate higher amounts of interest, but this has a negative effect on mortgages. The higher the interest rates are the higher the banks set interest payments on mortgages - meaning you or your parents will pay more on your mortgage. With interest rates falling, it makes it easier for many to pay their mortgages, whilst making spending money more attractive to consumers and businesses alike. However, the Autumn Budget of 2024, widely criticised for going too far or not far enough, is predicted to increase inflationary pressures in the short term. Economists at the BoE are anticipating a slowdown in the decrease of interest rates as a result, with the CPI (Consumer Price Index) expected to rise 0.5%. Current forecasts are estimating CPI to rise to 2.2%, proving a headache for Rachel Reeves and the BoE. Previously, September inflation was calculated at 1.7% below the target, but as of October inflation has creeped up again to 2.2%. A likely factor behind this is the removal of the energy price cap on household bills by Ofgem - hiking the cap by 9.5%, falling in line with the inflation trends within the energy industry. Service industry inflation also seems to be stuck at 4.9%. This comes as the BoE and other economists are still waiting for the impact of Labour’s recent budget and what effects it will have on the economy. Despite this, UK GDP is still expected to rise by 0.75% within a year’s time - an increase upon previous estimates bringing growth within the margin of 1.2-1.5% next year, roughly in line with current government growth targets for GDP. In spite of this, the historic victory for Donald Trump in this year’s US Presidential Election, has added an element of uncertainty to global markets due to his tariff policy for all imports to the US - something that is predicted to ‘fracture’ the global economy and push up UK inflation, marking an uneasy fewmonths for the Labour government while they try to prove their pro-growth agenda is working.
The Prime Minister: Keir Starmer, appointed his cabinet shortly after his landslide victory in July. On 2 November 2025, Kemi Bedenoch was elected as the new head of the Conservative party, appointing her shadow cabinet shortly after. Here are the most significant positions in relation to the economy, and how the current cabinet compares to their Conservative shadow counterparts. Chancellor of the Exchequer Responsibilities: As the most important economic role in the country, it is the responsibility of the Chancellor of the Exchequer to grow the economy, raise revenue through taxation and borrowing and control public spending whilst taking responsibility for the Treasury. The Labour Cabinet vs Conservative Shadow Cabinet By Teddy & Lorcan Labour cabinet minister: Rachel Reeves, MP for Leeds West and Pudsey. The current Chancellor of the Exchequer shares similar goals to her predecessor, Jeremy Hunt, in reducing the debt-to-GDP ratio whilst maintaining key Labour policy and prioritising investment in public services as well as infrastructure to achieve growth and prosperity. She will not raise income tax but has recently introduced fiscal changes in her Autumn budget such as increasing employers’ NICs. Conservative shadowminister: Mel Stride, MP for Central Devon. The new shadow chancellor outlined his goals of tackling the cost of living, maintaining low inflation, reducing debt and lowering taxation (funded by public services such as welfare cuts) during his campaign to be party leader. Chief Secretary to the Treasury Responsibilities: The Chief Secretary to the Treasury is responsible for public expenditure. They focus on areas such as infrastructure spending and state pensions with the objective of maximising efficiency and value for money through strategic planning. Labour cabinet member: Darren Jones, MP for Bristol North West. The Chief Secretary to the Treasury places a strong personal focus on climate change (net zero), technology, defence, the labour market, tackling child poverty and the digital transformation of public services. Conservative shadowmember: Richard Fuller, MP for North Bedfordshire. The shadow Chief Secretary opposes renewable energy sources such as solar panels in farmland or the countryside which he claims to be “short-term solutions” whilst emphasising the importance of achieving net zero by other means and encouraging investment via tax and NIC cuts. Secretary of State for Business and Trade Responsibilities: The Secretary of State for Business and Trade has the overall responsibility of the Department for Business and Trade which is responsible for things such as FTA (Free Trade Agreement) negotiations, mandates and decisions. Labour cabinet minister: Jonathan Reynolds, MP for Stalybridge and Hyde. The current secretary places a focus on FTAs to qualify British exporters for no tariffs in countries such as Japan and Malaysia, negotiating the removal of border checks to ease trade with Europe and a clear strategy for UK industry to increase confidence and therefore fuel investment. Conservative shadowminister: Andrew Griffith, MP for Arundel and South Downs. Griffith shares Reynolds’ aims of encouraging investment but believes this should be done through stronger tax incentives as he claims that the Labour government “decided to burden businesses and treat them like cash cows”. His trade policy centres around reducing the regulatory burden on businesses to increase exports and ease of trade. Secretary of State for Work and Pensions Responsibilities: The Secretary of State for Work and Pensions has the overall responsibility of the Department for Work and Pensions which administers the State Pension and working age benefits system. Labour cabinet minister: Liz Kendall, MP for Leicester West. Kendall’s key policies include a strong urge for employment opportunities and improved quality of work to help kickstart economic growth. Areas such as the youth, disabled and ill will be aided by a new national jobs and career service or the Youth Guarantee under the Labour secretary. Conservative shadowminister: Helen Whately, MP for Faversham and Mid Kent. Whilst her Labour counterpart is an advocate for workers’ rights such as a ‘genuine living wage’ and banning exploitation such as zero-hour contracts, Whately has generally voted against laws promoting equality and human rights, instead arguing against Labour policy such as the winter fuel cuts and pushing for increased employment.
On Tuesday 5th November 2024 the tense political battle between Donald Trump and Kamala Harris came to an end in the US election. This battle ended with Trump being the victor leaving many people around the world overjoyed and many devastated. The election will result in many changes around the world as well as in the States itself. This article will cover specific changes Trump is implementing that will potentially affect the UK greatly, his tariffs. What are these tariffs? Trump#39;s tariffs are essentially an added cost on imported goods which come into the US from other countries. These tariffs are similar to ones imposed by Biden towards the end of his presidential campaign, namely on goods imported from China. Biden created a 100% tariff on cars and other machinery imported from China which means that every car imported from China costs double for people in the US. Trump#39;s tariffs work similarly but are much more widespread as he states that he will impose a 20% tariff on all goods coming into the US from other countries. This change hopes to increase the amount of jobs in the US by encouraging US citizens to buy domestic goods. This change would incentivise higher production within the US and could lead to higher productivity and economic growth. It is a common misconception that the tariffs add 20% onto what the consumer pays, however, this is Trump's tariffs and the uK economy By Corey & Euan untrue. The tariffs are imposed on the importers themselves but it will still affect consumers as importers will have to increase the price of the goods they sell to offset the tariffs, which may not always be 20%. Trump’s ultimate goal with these tariffs are to protect domestic industries in the US that are under threat due to cheap foreign competition. Howwill these tariffs affect the UK? Donald Trump’s 20% tariff on imported goods will affect the UK greatly as the tariff will increase the price of our exports to consumers in the US. This will result in our exports being less attractive to US citizens as they will be more expensive for themwhich will decrease the demand. Many economists have estimated that these tariffs will result in a £22bn hit on UK exports which may cause global exports from the UK falling by 2.6%. These tariffs will affect many industries in the UK, the most affected will likely be the fishing, petroleum and mining industries which are large industries that export to the US. Furthermore, the big hits to UK exports will undoubtedly cause inflation rates and interest rates to rise in the UK as we adjust to the hit to our economy. It is predicted by the National Institute of Economic and Social Research that if these tariffs are implemented it may cause the UK growth rate to decrease by 0.5-0.7 percentage points for 2 years. Moreover, many economists believe that if Trump’s plans do come to pass, then the UK may be forced to rejoin the European Economic Community - partially undoing what happened with Brexit in 2020. However, it may not be all bad for the UK as Trump will add a special tariff for China, being a 60% tariff on goods imported from China. As China is a large producer of electronics and machinery this large tariff may indirectly benefit the technology industry in the UK as the demand for goods from China will fall greatly in the US due to the large proportional increase in price. Despite this possibility, the UK may still be in deep water as we would then need to compete directly with the US due to the decreased demand for Chinese goods. How is the UK responding to Trump#39;s planned tariffs? UK ministers are quickly responding to Trump’s plans with Foreign Secretary David Lammy stating that “We will seek to ensure and to get across to the United States - and I believe that they would understand this - that hurting your allies cannot be in your medium or long-term interests, whatever the pursuit of public policy in relation to some of the problems posed by China”. Additionally, Chancellor Rachel Reeves and many in the cabinet have stated that they will continue to make the argument for free trade. Reeves has also stated that she is planning to propose an agreement with Trump in order to lessen or completely give the UK immunity to his tariffs. Instructions 1. Finely chop your red onion (use a mini chopper to save time) and cook in olive oil with a pinch of salt on a medium heat until soft. Add in balsamic vinegar and wait for the liquid to evaporate – then transfer to a bowl to cool down. Alternatively, cook the onions until soft, transfer to a bowl to cool and then add the balsamic vinegar. Leave the onions to the side whilst you get on with the rest of the recipe. 2. Fine chop your mushrooms. Save time and chop them in your blender. In a pan, melt butter, sauté the mushrooms, until the juices release. Add the garlic and the mixed herbs. 3. Once all the liquid has evaporated add the chopped spinach in the pan. Wait for it to wilt and all the water to dry out. There will be a lot of liquid, so you will need to be patient until there is not any liquid. If you are using the nuts, add them in now, chopped finely. 4. Let the mushroommixture to cool down. Then transfer it to a large bowl, mix with the onions, breadcrumbs, salt, pepper and nutmeg. 5. Pre heat your oven to 180 degrees 6. Roll out your pastry (buy it from the supermarket, where it comes pre-rolled). Tightly pack your mixture in the middle like a sausage. Add in the goat’s cheese, put it on the top of your mixture and on the sides of your mixture. Fold one side of the pastry over the mixture, brush milk/egg to seal then fold the other side of the pastry over – brush with milk/egg. Use a fork to press down the pastry so it is sealed tightly. Fold over the two longer ends and do the same thing. 7. Turn your pastry over. With a knife score a design. Brush milk/egg on top. 8. Put in the over for 30-45 minutes until golden and remember to over your wellington to ensure that the pastry is cooked at the bottom. Cook at around 180-190 degrees. Ingredients: 1 red onion Olive oil – 1/2 tbsp. Salt – to taste Pepper – to taste Balsamic vinegar – 1tbsp. Butter – 1 ½ tbsp. Chestnut mushrooms – 150g Button mushrooms – 150g Garlic – 5/6 cloves Dried mixed herbs – 1tbsp. Fresh spinach – 250g (optional) Roasted chestnuts – 75g (approx. 8) (optional) Walnuts – 20/25g Fine breadcrumbs – 2-3 tbsp Goat’s cheese – 50g – leave it out if you are going to make the wellington vegan or use a plant-based substitute Nutmeg – ½ tsp Puff pastry – one pack Egg/milk – for brushing the pastry Goat's Cheese & Mushroom Wellington An Alternative to a Sunday roast
UK tuition fees have increased from £9250 to £9535 per year which has raised concerns about how affordable this change is for students wanting to pursue higher education, especially those who come from low income households. Higher tuition fees add to the already big enough student debt with repayment periods lasting an astounding 40 years! For students from disadvantaged backgrounds, this debt can feel enormous resulting in them unwilling to attend university. Additionally, this impacts career choices as graduates with a lot of debt might prioritise finding higher paying jobs over lower paying resulting in socially valuable roles in the public sector being neglected resulting in a lack of diversity and leaving certain job sectors with fewer professionals. What has the government done to ease this transition? The government has increased maintenance loans however this has been criticised. The National Feeling the pressure: Tuition Fees Hike & The Future of Higher Education By Bilal & Hitarth Union of Students argues that these measures don’t solve issues like how universities are funded and this current systemwill still leave many students struggling with debt. For students currently in Sixth Form and below, what could this increase in tuition and maintenance loans lead to? What sort of impact will this have on the future of higher education? The last few times these fees had been adjusted was in 2012 from £3250 a year to £9000 a year and another subsequent increase to £9250 a year in 2017. For universities to even manage, they would need to increase tuition costs to up to £12500 a year and that has a substantial impact on howmany students would want to apply to University. With so many other options available such as degree apprenticeships or going to find work immediately after year 13, there is a large opportunity cost paying back a loan with such a burden. It’s argued that there is much more utility in going to University with 87% of graduates getting jobs compared to 68% for non-graduates in 2023. However, there are so many other opportunities like degree apprenticeships where you aren’t burdened with loans and individuals gain a degree and a paid job within the company. There is also the possibility of just going straight into work and building up your income. These are key opportunity costs when paying for university over trying these other opportunities. It is likely we will see a decrease in applications to Universities and see a rise in these other opportunities. There are already 40% of universities running in a deficit since 2023. Could we see this number increase in the future especially since tuition fees are now worth 30% less in real terms than in 2012? The rising tuition fees will lead to less international students with there being a drop of 16% in student visa applications from last year. There will be less diverse applicants as more will attend other universities across the world. Overall, we will in the future see a decrease in the demand for university entrance post-sixth form as a result of the initial fee increase for both tuition and maintenance. Would it even be worth it to attend university if not for the steep prices? The future of higher education seems less enticing to many as a result. According to a recent CMA (The Competition and Markets Authority’s) interim report ,Infant formula plays “a key role in the market, supporting important public health goals”, some aspects have had “unintended consequences, contributing to consumers paying higher prices”. The government watchdog (An individual or group that monitors the activities of another entity such as an individual, corporation, non-profit group, or governmental organisation on behalf of the public to ensure that entity does not behave illegally or unethically) has suggested that a ban on baby milk price promotions should be overturned to stop parents paying over the odds for it. “Companies are parents paying over the odds for baby formula By Matthew & Kieran exploiting new parents who rely on formula milk to feed their babies”, said Maxine Palmer from parenting charity NCT. As more and more parents are struggling to afford it, the government has started issuing NHSbranded baby milk and removing branding from baby milk in hospitals, to make it more affordable to parents. Danone, Nestle, and Kendamil control more than 90% of the UK market as they have a large market share so they can be classified as monopoly firms. Due to the low levels of competition they have the ability to exploit customers and charge them high prices for their goods and services. Prices for baby formula in the UK have fluctuated between 18% and 36%, depending on the brand, over the two years between December 2021 and December 2023, the report found. Parents could make a saving of up to £500 over a baby’s first year of life by switching to a lower priced brand. The current baby formula market is regulated so that promotions, such as loyalty points or discounts are banned in the same way they are for tobacco and lottery tickets. This was introduced to encourage breastfeeding within the UK population which the NHS says is healthier for children. Even though these regulations exist, Asda started allowing loyalty points to be used to buy baby milk from January. Iceland has also spoken out against the rule. The rules also require all brands of baby milk formula, including supermarket own brands, not to differ too much in terms of core ingredients. Parents say that they feel “punished” for not breastfeeding. Mumsnet, a parenting website, has said that the ban on promoting discounts on baby formula have raised prices rather than increasing breastfeeding rates. The increasing prices directly impact those who cannot breastfeed due to medical reasons which can result in parents having to pay £30 a week on milk for their child. Many argue that having price promotions for unhealthy adult foods is unfair whilst companies can’t make discounts on baby formula - a healthy substitute for breastmilk.
In this article, we will discuss the reasons for Nissan’s sales drop, the corporate actions taken and the potential impacts. The drop in sales is due to a number of reasons, including a lack of electric vehicles (EVs) in China, inflation in the US and lower demands. To tackle this, the large Japanese car manufacturer has decided to cut 9,000 jobs around the world, reducing global production by 20%. The impacts of this decision includes Nissan falling behind its many competitors, Economic hardships on employees and more. There are a range of factors for the corporation’s drop in sales. Firstly, according to Mark Rainford, a car industry analyst based in China, “Nissan, like many Japanese car makers, has been very slow to the electrified vehicle party and this is reflected in their results.” This oversight has been critical to Nissan’s drop in sales, as the company failed to capitalise on its early lead with the Leaf in 2010, neglected to design further EVs, and now faces the consequences of allowing competing car manufacturers to develop their own EVs. Nissan to lay off thousands of workers as sales drop By Nick & Hamid Secondly, in the US, the firm is struggling to sell new vehicles because of high inflation and interest rates. These economic factors have led to decreased consumer confidence and therefore demand for new vehicles, as potential buyers are either opting for cheaper alternatives or delaying purchases. Lastly, there are many competitors, including Toyota, Honda, Hyundai and Ford for consumers looking for a more cost-effective alternative, and Tesla for EV-focused manufacturers. As a consequence of these giant competing companies, all offering a wider range of hybrid and electric vehicles than Nissan, it is struggling to stay afloat in the global market. The impacts of these layoffs put Nissan in a vulnerable position, creating numerous challenges. One major issue is the economic strain of letting workers go. Affected employees now face the hardship of seeking new jobs while struggling to support their families. Regions with Nissan facilities will experience ripple effects, as fewer people with stable incomes contribute to the local economy. For example, it remains unclear how the layoffs will affect Tennessee, a critical location for Nissan operations. Another significant impact is the market share Nissan may lose. With reduced productivity, the company’s ability to produce and sell cars will decline. Competitors like Tesla and Toyota are likely to exploit this weakness, capturing market share that Nissan leaves behind. These aggressive moves by competitors could place Nissan in a precarious position, making recovery is difficult and potentially affects the company in the long term. Additionally, decreased production rates will lower supply, further weakening Nissan’s already modest demand. This downturn could worsen rapidly, allowing competitors like Tesla, particularly in the electric vehicle market, to dominate the demand Nissan cannot meet. If this continues, Nissan’s influence in key segments could be entirely overtaken by rivals. In October, the UN Food and Agriculture Organisation (FAO) reported that world food prices had reached their highest levels in 18 months. Higher prices for vegetable oils, wheat, cheese, sugar and more increased the FAO’s food price index (used to track the most globally traded food commodities) to 127.4 last month - 5.5% higher than October last year. Food prices have risen across all categories except meat; in particular, vegetable oil prices have increased by 7.3% and sugar prices have risen by 2.6% since September. Across the world, consumers are being impacted through higher shopping bills and the surge in food prices complicates efforts by central banks to manage inflation and support economic growth. Why are food prices climbing? Overall, there are a combination of environmental problems, supply chain disruptions and geopolitical issues contributing to the current rise in international food prices. In the Northern Hemisphere, major exporters such as the European Union and the Russian Federation have experienced poor weather conditions which have hindered winter crop sowing, resulting in global wheat prices increased for the second consecutive month. Extended dry weather in Brazil has reduced sugar cane yields, increasing sugar prices, while seasonal changes have lowered palm oil production, driving up vegetable oil prices. Not World food prices soar to highest levels in 18 months By rohan only have there been unfavourable weather conditions, but the ongoing war between Russia and Ukraine has decreased trade. Both countries have been contesting control of the Black Sea which has impaired Ukraine’s ability to export products such as grain as the nation often uses the sea’s waters for transporting goods. Furthermore, a new unofficial price floor for wheat exports in Russia has been introduced along with a rise in wheat export tax in order to control export volumes and help reduce inflation in the country. Russia is the world’s largest exporter of grain, so the decline in its wheat exports has significantly contributed to the large rise in wheat prices. The reasons for the increase in dairy prices such as cheese are less obvious but, global milk production has been slow which has limited supply while demand has remained high. As well as this, dairy products have seen consistent price increases due to higher production costs as a result of various factors such as rising feeding costs. Looking to the future Although the rise in food prices is concerning, predictions suggest that the growth will slow down, with the U.S. Department of Agriculture (USDA) forecasting that food prices will increase by about 2% in 2025 compared to the 8.3% increase so far this year. Many of the current issues surrounding global food prices are the result of unfavourable weather and climate conditions which will pass in the coming months, easing supply chain pressures. Therefore, while food prices will not fall drastically, the overall rate of inflation for food will lower, bringing some relief to consumers who have struggled with rising grocery costs. However, the prices will still remain relatively high and global warming will likely make crop growth is much more difficult in the future. As a result, it is essential that governments implement long term solutions such as investing in climate-resilient agriculture to maintain sufficient food supply and prevent further surges in food prices.
The Chancellor of the Exchequer, Rachel Reeves has recently implemented a budget aimed at addressing various challenges in the current UK government and increasing revenue generation. The £40 billion tax budget will be carried out at several different times, starting in January 2025 with the introduction of VAT on private school fees. However, reforms to inheritance tax, including pensions, start from April 2027. Rachel Reeves’ latest budget introduces drastic changes to taxation in the hopes of completing certain objectives the labour government had set prior to the election. Changes to agricultural relief are set to be executed in order to raise over £2 billion annually. Capital Gains Tax rates will increase significantly, particularly affecting carried interest, which reflect efforts to boost public finances. VAT is set to enact on Private school fees starting January 2025. In addition to this, the business rates on these Private schools will end. These measures aim to focus more funding on state schools. The non-domain tax regime is set to be abolished in 2025 rachel reeves November 2024 Budget By Miles & Jacob and replaced with a residence-based tax system on April 6th 2025. In other words, anyone residing in the UK for a specified time will pay UK taxes on their global income. Energy-related taxation includes a 38% levy on oil and gas company profits, extended until 2030, with the investment allowance removed. Air Passenger Duty will rise, particularly for private jets, reflecting a focus on equitable contributions and environmental responsibility. These measures aim to balance the budget while encouraging sustainable practices. • Business taxation includes a rise in employer National Insurance Contributions from 2026, tempered by a doubling of the Employment Allowance for smaller businesses. • This aims to support small enterprises while securing necessary revenue from larger corporations. • Collectively, these changes underscore a commitment to addressing inequality, funding essential services, and modernising the UK’s tax system, generating significant new revenue while mitigating impacts on lowerincome groups. Rachel Reeves’ budget introduces a significant change for buyers of highvalue properties and second homes. The stamp duty surcharge for secondhome purchases are set to increase by 2%, bringing the total to 5%. This move is designed to discourage speculative property investments, freeing up more housing for people looking to buy primary residences. It also aims to tackle the ongoing housing affordability crisis while generating extra revenue. By making this adjustment, the budget strives for a fairer property tax system that addresses the pressing challenges in the housing market. Healthcare and education One of the major changes to Rachel Reeves budget is healthcare and education. It has been announced that there will be a £22 billion increase in capital funding for health care and social care. This will be increased in a two-phased spending review. This year the budget on NHS will increase by 4.7% to £181.4 billion and then by a further 3.3% next year. This is aimed to help bring down the waiting lists which is expected to fall by 3.8% this year and then by a further 3% next year. There is also going to be an additional £1 billion for facility upgrades. The largest change to the education budget Is the new tax on private schools which has helped the core school The budget will be increased by £2.3 billion from next year. However this budget has failed to deliver much on education, other than an investment in 50 new special schools and creating 2000 additional places for SEND pupils. Housing The government has committed to increasing the supply of affordable homes by supporting local authorities and developers to deliver homes faster and there has an increase of 500 million to the affordable housing programme. The government has created incentives to first-time buyers by extending the help to buy scheme and increasing access to affordable housing schemes. There has also been an investment of £1 billion into build to rent schemes aiming to accelerate the development of high-quality, professionally managed homes. Taxation At the moment personal income tax will remain frozen and there won’t be a change to the thresholds for income tax bands although it has been announced that those in the highest threshold may have a slight increase in tax but will be tied to inflation. The annual exempt amount for capital gains tax is being reduced from a previous £12,300 to £6,000 and will further decrease to £3,000 in April 2025. There has also been a massive change to agricultural land inheritance tax there will only now be a 100% inertance tax relief to the first £1 million of combined agricultural and business property but above £1 million there is a new rate of 20% being taxed. The government said it would only affect the 500 wealthiest estates but Is predicted to effect over 70,000 causing outrage in the agricultural community leading to a protest in London throughout the past week.
At its core, Dubner and Levitt’s ‘Freakonomics’ is a profoundly thought-provoking book, with exercises throughout that help readers think like economists. Throughout the book, several aspects were focused upon. One of which I truly found interesting was the psychology used: how an individual’s behaviour due to incentives can shape society. By picking out widely common topics such as education, parenting and crime, the authors offer a new economic perspective of the world, challenging its readers to think differently. Initially, we are introduced to the assertion that “economics is, at root, the study of incentives: how people get what they want, or need, especially when other people want or need the same thing.” While this statement seems like an overly holistic and vague claim, it holds truth. For example, the question that arises at the beginning is “what do teachers and sumo wrestlers have in common?”. The short answer to this was that frankly, both will cheat. If there is a big enough incentive, that is. Teachers, mainly situated in America, are pressured with high stakes such as job security and funding when it comes to standardised test scores. This led to some teachers altering students’ answers in order to boost their class’ overall average score, prioritising false results and their feigned reputation over the students’ genuine learning. This concept can also be applied to sumo wrestlers through match-fixing. This is ultimately where sumo wrestlers who were on the verge of losing their rank, were helped by opponents usually for favours, money or anything that rewarded them equivalently. Ultimately, both scenarios show that, regardless of profession, incentives, if large enough, can drive people to reap rewards, even if doing so violates ethical norms. Freakonomics Book review By srigan Furthermore, in the example used above, not only was the psychology of human nature incorporated into economics and incentives, but statistical analysis was used as well. In the book, multiple algorithms were displayed as a way to catch dishonest teachers. We were provided with 2 sets of large strings of data, containing the supposedly students’ multiple-choice answers to their tests. However, only one set had genuine answers. You may well be asking; how do we determine which of the results are genuine? There were multiple ways: the most common of which was a series of repeating correct answers in a row for all or most students, especially in the harder questions. The government also had demographic information about each student and how they performed in previous years. If this data differed too greatly from the current year, it would be considered a suspicious case. Overall, this shows that the theory suggested prior holds truth, as it is backed not only by psychology but also statistical evidence, proving that in fact, when faced with daunting pressure from society, people will in fact cheat. Interestingly, we as readers were posed with the seemingly simple question: “what makes a good parent?”. Here, Dubner and Levitt link economics with parenting but also, what truly determines a child’s success. The general consensus is that the more knowledge a child directly consumes, whether this may be through reading piles of books or attending a high-end school, the more likely they are to succeed. However, the authors oppose this idea and argue that socioeconomic status and parental education have much greater value on a child’s likely success. Levitt and Dubner emphasise that children from higherincome families, even if not exposed to ideal home environments, tend to perform better academically simply because their parents have the resources and time to support their learning. What I found intriguing here was the fact that availability and help from parents is so often overlooked. Comparing this advantage to students’ whose parents simply do not have the time, this is definitely a significant factor in success. Ultimately, by addressing these misconceptions and forgotten factors, the authors force us readers to reconsider our assumptions on parenting, clearly displaying that what we seemingly believed to be vital to a child’s success is not as important as we may realise. To conclude, ‘Freakonomics’ is without a doubt a compelling read, linking psychological topics i.e. how we behave, with economics, backed up by statistical data. The authors thoroughly explore how human nature is so influenced by economic incentives, and that if there is a big enough reward, we may slightly bend our moral boundaries in our favour. Overall, this book is an ideal choice for those who are interested in how economics links with our everyday lives, professions and basic human nature and wants. ASOS, known as one of the major British online clothes retailers, recently made headlines for their controversial implementation of return fees, marking a significant change in their company policies. For over 20 years, ASOS has sold over 850 brands as well its own range of clothes, allowing for customers to return items free of charge. However this all changed on the 9th of September when ASOS retracted their famous selling point. Before, shoppers were allowed to purchase items with minimum risk, knowing that they could return their items free of charge if it was unsatisfactory. Now shoppers are forced to pay £3.95 if they are wishing to return items. Could this have a devastating effect on ASOS’s customer base? Although Asos claims that “nothing has changed”, many clothing analytics seem to agree that this sudden change has the potential to alienate customers, especially those who frequently return due to wrong sizing or bad product quality. Moreover this change can have a significant impact upon ASOS’s sales rates as many customers may ASoS Introduces return Fees: A Game-Changer for online Shopping? By oliver & Connor view other companies with free returns as more attractive to buy from, increasing the likelihood that customers may switch to other retailers with more customer-friendly return policies. Despite the fact that this proposal seems extremely negative, there are a few positive outcomes from this situation for ASOS and the shopping community. Firstly, the change in return fees promotes the purchase of ASOS premium as the retailer stated that customers signed up to Asos premiumwill get free returns if they keep a minimum of £15 of their order. Another beneficial impact is on the environment as fewer returns from customers contributes to a lower carbon footprint. This is due to the fact that the transportation and handling of returned goods are resource-intensive. Therefore the reduction in these returns limits the need for extra transport and aligns with the companies broader sustainability goal to improve Environmental, Social, and Governance (ESG) performance.
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