Closing post
Time to wrap up, with a quick recap….
Oil has hit a two-week high today, after the United States vowed to keep attacking Yemen’s Houthis until the Iran-aligned group ends its assaults on shipping.
The crude price was also lifted by. China’s ambitious plans to “vigorously boost consumption” by putting up pay and reducing financial burdens, in its latest attempt to increase consumer confidence and lift its struggling economy.
The hedge fund manager Crispin Odey will be banned from the City and hit with a £1.8m fine by the UK’s financial watchdog for deliberately attempting to “frustrate” a disciplinary process into sexual harassment allegations.
Donald Trump’s trade wars continue to ripple though the global economy, with the president insisting that reciprical and sectoral tariffs will be imposed on 2 April, as he has previously indicated.
The flurry of tariffs since Trump returned to the White House has also hit confidence among US builders, who face higher costs.
The OECD has cut its growth forecast, with Mexico and Canada suffering sharp downgrades due to the threat of tariffs on their exports to the US.
Rachel Reeves has told UK regulators that “too much bureaucracy” is making it “too slow to get things done” across the UK, in a clampdown on red tape.
The former Bank of England deputy governor Charlie Bean has warned the chancellor against making kneejerk cuts in next week’s spring statement to try to hit fiscal targets that are five years away.
More than £3.5bn has been wiped off the value of Tesco, Sainsbury’s and Marks & Spencer’s stock since Friday amid fears that rival Asda will step up the grocery price war.
The court of appeal has upheld Thames Water’s £3bn emergency bailout loan.
Updated
The former Bank of England deputy governor Charlie Bean has warned the chancellor against making kneejerk cuts in next week’s spring statement to try to hit fiscal targets that are five years away.
Rachel Reeves is preparing to slash spending, including on disability benefits, in response to weaker forecasts from the independent Office for Budget Responsibility (OBR) – prompting a backlash from within her own party.
But Bean – who is also a former member of the OBR’s budget responsibility committee, which agrees the forecasts – warned the chancellor against “fine-tuning”.
“We’ve got ourselves into a frankly pretty ridiculous position where we’re doing fiscal fine-tuning to control the OBR forecast five years ahead,” Bean told an event hosted by the Resolution Foundation thinktank on Monday.
The dollar is weakening today, down 0.25% against a basket of currencies.
This has pushed sterling up to $1.2980, near to the four-month high touched last week.
The euro has hit its highest level in nearly a week, up 0.36% at $1.0918.
US housebuilder confidence hit by tariff fears
Business confidence among US building companies has dropped this month, due to the triple threat of economic uncertainty, tariffs and elevated construction costs.
The latest healthcheck of the sector from the National Association of Home Builders shows that builder sentiment fell in March.
Builder confidence in the market for newly built single-family homes was 39 in March, down three points from February and the lowest level in seven months, according to the NAHB/Wells Fargo Housing Market Index.
Let's change tariff policies daily and scare all the workers out of the country!!! NAHB Chairman Buddy Hughes said: “Builders continue to face elevated building material costs that are exacerbated by tariff issues, as well as other supply-side challenges that include labor and… pic.twitter.com/Zm7A4jir4o
— Richard Farr (@farrmacro) March 17, 2025
NAHB chairman Buddy Hughes says:
Builders continue to face elevated building material costs that are exacerbated by tariff issues, as well as other supply-side challenges that include labor and lot shortages.
The Trump administration has claimed that tariffs are paid by foreign countries when they sell goods into the US, and are a tax cut for Americans.
But NAHB chief economist Robert Dietz also warns that construction firms are facing “added cost pressures from tariffs”, explaining:
“Data from the HMI March survey reveals that builders estimate a typical cost effect from recent tariff actions at $9,200 per home. Uncertainty on policy is also having a negative impact on home buyers and development decisions.”
NAHB 39 (est 42, last 42)
— Mario Cavaggioni (@CavaggioniMario) March 17, 2025
Existing Home Sales m/m -9.8% (est -, last -3.3%)
Housing market struggles to recover, NAHB pointing to contraction in gross private domestic investment in Q2... pic.twitter.com/xaddyWpQQb
Financial markets in Europe and the US are starting the new week on the front foot.
On Wall Street, the S&P 500 index is up 12 points, or 0.23%, at 5,651 points. That’ll be a welcome sight for New York traders, who have seen the S&P 500 fall almost 8% in the last month.
In London, the FTSE 100 share index has gained 0.5%, or 42 points, to 8674 points, a one-week high.
Oil lifted by US-Houthi attacks and China economic hopes
The oil price has jumped by 1% today after the US launched airstrikes against Yemen’s Iran-backed Houthis over the weekend, and pledged to continue them indefinitely.
Brent crude, the international benchmark, is up 70 cents per barrel to $71.23/barrel, having hit a two-week high early this morning.
US crude is up 63 cents per barrel at $67.80/barrel.
The US attacks have raised concerns that tensions in the region could escalate, with the Houthis reporting they had launched a retaliatory attack on the US aircraft carrier USS Harry S. Truman.
The US says it will continus its attacks until the Houtis cease attacks on shipping in the Red Sea area. Pete Hegseth, the US defence secretary, told Fox News:
“The minute the Houthis say ‘we’ll stop shooting at your ships, we’ll stop shooting at your drones’, this campaign will end, but until then it will be unrelenting.”
🛢️ Oil SURGES 1%+ with Brent hitting $71/barrel and WTI at $67.94! Military operations against Yemen's Houthis intensifying supply disruption fears. #OilPrices #GeopoliticalRisks #EnergyMarkets
— IGInternational (@IGInternational) March 17, 2025
Milad Azar, market analyst at XTB MENA, explains:
Crude oil futures rebounded amid rising tensions in the Middle East. US operations against Yemen’s Houthis could leave traders on edge. The geopolitical risks could support oil prices in the short term, but the market could remain cautious in the face of the uncertainty regarding the long-term impact.
Oil could also be benefitting from encouraging economic data from China overnight, which showed retail sales rose to 4.0% year-on-year in January and February, beating market expectations.
Consumption could also be lifted by a new “special action plan” unveiled by Beijing policymakers last weeked, as part of a drive to support the economy in the face of Donald Trump’s trade war.
Updated
Here’s a breakdown of February’s US retail sales report, from EY’s chief economist, Greg Daco:
🇺🇸 Soft rebound in Feb following January plunge
— Gregory Daco (@GregDaco) March 17, 2025
✅#Retail sales +0.2%
🟠Adj for inflation 0%
✅Core +1%
✅Adj for infl 0.9%
💻Online 2.4%
⚕️Health 1.7%
🛒Groc 0.4%
🏠Build mat 0.2%
🛋️Furn 0%
🎮Elec -0.3%
⚽️Sport -0.4%
🚗Auto -0.4%
👗Cloth -0.6%
⛽️Gas -1%
👩🍳Rest/bar -1.5% pic.twitter.com/N6bwrIYtwj
US retail sales miss forecasts:: What the experts say
Stephen Brown, deputy chief North America economist at Capital Economics, has found some upsides in today’s US retail sales data:
The 0.2% m/m rise in retail sales was not as strong as the 0.6% rebound eyed by the consensus estimate, but the 0.3% gain in core sales (i.e. excluding autos) was at least a lot better than the 0.8% plunge indicated by the timelier Chicago Fed CARTS data.
The bright spots were sales at nonstore retailers and health & personal care stores, which rose by 2.4% and 1.7%, respectively. At the other end of the spectrum, food services & drinking place sales slumped by 1.5%, gasoline store sales by 1.0% and motor vehicle & parts sales by 0.4%. None of those are included in the control group sales estimate that feeds into real consumption, however, which meant that control group sales did far better than expected with a 1.0% m/m jump – all but reversing the same sized decline in January.
But… Jonathan Moyes, head of investment research at Wealth Club, fears the American consumer does not look well:
“US trade policy has dominated the news and had an unsettling effect on global financial markets. With sentiment so poor, investors will have been hoping the mighty US consumer provides reassurance that all is well on Main Street. They didn’t find it, with retail sales coming in lower than expected the US consumer is starting to look a little peaky.
This puts the Federal Reserve in a tough spot. The hard data looks weak, and forward-looking data, like consumer and business confidence surveys, show conditions are deteriorating. In the short term, trade tariffs will surely stoke inflation. The key question is whether the recent data is weak enough to warrant additional interest rate cuts from the Federal Reserve. The bond market reaction today suggests it is not.”
US Retail Sales come in well below expectations.
— Lobo Tiggre (@duediligenceguy) March 17, 2025
This is the last "big" US economic data point before the Fed's policy decision this Wednesday... pic.twitter.com/zwAsqG3EoW
US retail sales growth misses forecasts
Over in America, retail sales grew rather less than expected last month – perhaps a sign that the US economy is slowing.
US retail and food services sales for February 2025 rose by 0.2% month-on-month in February, according to an advance estimate just released, weaker than the 0.6% growth expected.
Spending at motor vehicle & parts dealers fell by 0.4% in the month, while spending on gasoline was down 1%, probably due to a dip in gas prices.
Spending at food services & drinking places fell by 1.5% in February compared with January (but were 1.5% higher than a year ago), which could be an indication of consumers cutting back.
US FEB. RETAIL SALES RISE 0.2% M/M; EST. +0.6%
— LWS Financial Research (@lwsresearch) March 17, 2025
*US FEB. RETAIL SALES EX-AUTO RISE 0.3% M/M; EST. +0.4%
*US FEB. RETAIL SALES EX AUTOS, GAS RISE 0.5% M/M; PREV. -0.5%
*US FEB. RETAIL 'CONTROL GROUP' SALES RISE 1% M/M; PREV. -0.8 pic.twitter.com/cwaPInjYeR
Updated
Struggling UK utility Thames Water has won a court battle over the restructuring plan that will give it more liquidity to keep operating.
Appealas against Thames’s £3bn debt lifeline had been rejected by the Court of Appeal, allowing the company to avoid a state rescue.
Appeal court judges dismissed an appeal from environmental campaigners and a small group of Thames creditors after a three-day hearing last week.
Both groups argued that the “eye-watering” costs of the £3bn emergency loan, at interest rates of 9.75%, were not in the public interest. They said putting the ailing water company, which has debts of £19bn, into temporary nationalisation under a special administration regime would be more cost effective.
In a statement, Thames Water said its focus was now on getting onto a more stable financial footing.
Thames Water chief executive Chris Weston said in a statement:
“We continue to work closely with our creditors, enabling us to access liquidity to continue to implement our turnaround plan so we can deliver better results for our customers and the environment.”
More here:
Rewilding red tape to be torn up
Red tape will be removed for conservationists who want to rewild their land under a shake up of the environmental regulators, my colleague Helena Horton reports.
Rachel Reeves and environment secretary Steve Reed will remove the need for trusted partners - conservationists who have been working on nature schemes for some time - to apply to Natural England or the Environment Agency for permission to restore nature, as part of today’s push to cut red tape.
At the moment, if conservationists want to restore rivers or dig wetland areas, for example, they have to apply to multiple regulators for approval, in what can be a time-consuming and costly process.
Defra said the new plan will allow trusted nature conservation and environmental partners “to move fast on restoring nature without applying to multiple regulators for permissions.”
Jake Fiennes, director of conservation at the Holkham Estate in North Norfolk said the current system makes it far too difficult to restore the rare chalk stream running through the national nature reserve, or to dig wetland areas for the many endangered wading birds which call the estate their home.
He said:
“The Flood Risk Activity Permits are currently a disaster. Those of us helping deliver the government’s environmental targets are regulated to death while those committing freshwater ecocide do so with near impunity.
It’s an opt-in policing system that penalises compliance and desperately needs reform. Permissions and consents can be very onerous, costly, and take a long time to come through.”
A Natural England source agreed that the system needed reform. They said:
“The present regulations slow down good things as well as potentially harmful things. The fact is that our regulatory frameworks were designed to stop bad stuff happening (very important), but now we need approaches that are more about encouraging good things.”
Updated
Reeves tells regulators 'too much bureaucracy' is hurting economy
Back at Downing Street, Rachel Reeves has told regulators that red tape is holding back the UK economy.
Having summoned representatives from the UK’s watchdogs (see opening post), the chancellor told them there is “too much bureaucracy” which is making it “too slow to get things done” across the UK.
Speaking as the meeting began, Reeves said:
“You know that the number one mission of this Government is to grow the economy. There are a number of things over the last decade or so that have held back growth, and one of them - if we are honest and you know better than anyone - is the regulatory landscape.
“Too much overlapping regulation, too much bureaucracy, too slow to get things done. It is something that myself and other ministers hear all the time.”
Reeves also told the regulators that their discussion will be focused on cutting duplication and bureaucracy.
She said:
“What I want to use today’s discussion is not to have an update on every regulator, because I have seen the letters and know about the discussions that have been happening.
“But some of the cross-cutting work that we could be doing across Government to reduce some of the duplication, reduce some of the bureaucracy, meet that ambitious target that the Prime Minister set last week around the administrative burden and cutting that by 25%.”
She listed useful ideas suggested by regulators, including measures on contactless payments, the “speeding up the licensing of new drugs”, and drone deliveries.
Here’s our news story on Crispin Odey facing a City ban and a £1.8m fine for deliberately attempting to “frustrate” a disciplinary process into sexual harassment allegations.
The FCA also accuses Crispin Odey of showing “a repeated disregard for standards and requirements that he was expected to meet”.
That included “deliberately frustrating” the disciplinary process conducted by his hedge fund, OAM, into his conduct, it says.
The regulator’s Decision Notice says:
Mr Odey’s behaviour towards both OAM and the Authority lacked candour. He used improper means to protect his own interests and achieve his objectives; the reasons he gave for his dismissal of ExCo, and his conduct in his dealings with the Authority also support the finding that he lacks integrity.
Mr Odey’s conduct exposed investors to the risk of harm and risked undermining the integrity of the UK financial system.
The FCA adds that it does not believe the risks Mr Odey poses have been remediated, saying:
When asked at interview by the Authority whether on reflection he would act differently, Mr Odey did not identify any different actions he would have taken, and instead sought to justify his actions.
Key event
The FCA also explain how they decided to fine Crispin Odey £1.8m.
Under its rules, the size of the penalty is determined by its severity – the most serious offence, a “level 5”, would incur a fine worth 40% of an individual’s relevant income.
Odey’s action has been classed as a “level 4” breach, which would incur a 30% penalty.
The FCA concluded that Odey’s relevant income for this period was £2,548,957 – meaning a fine of £764,687.
However, the regulator has applied a 20% increase due to. aggravating factors – namely, that Odey proceeded with the second removal of members from OAM’s executive committee, despite the regulator expressing concerns after a first group of members were removed.
That takes the fine up £917,624.
The regulator has then doubled it, “for the purposes of credible deterrence”, having concluded that a fine of £917,624 was “too small in relation to the breach” to act as a deterrent.
You can read the Decision Notice for Robin Crispin William Odey online, here.
Reminder, the findings are provisional, as Odey has referred the Decision Notice to the Upper Tribunal.
Explaining the decision to ban Odey from the City, the Notice states:
During the relevant period, Mr Odey demonstrated a repeated disregard for standards and requirements that he was expected to meet, including by deliberately frustrating a disciplinary process designed to scrutinise his conduct and uphold OAM’s internal policies and procedures relevant to the performance of regulated activities.
Mr Odey’s behaviour towards both OAM and the Authority lacked candour. He used improper means to protect his own interests and achieve his objectives; the reasons he gave for his dismissal of ExCo, and his conduct in his dealings with the Authority also support the finding that he lacks integrity.
Mr Odey’s conduct exposed investors to the risk of harm and risked undermining the integrity of the UK financial system.
FCA decides to ban Crispin Odey and fine him £1.8m
Newsflash: Britain’s City watchdog has decided to fine financier Crispin Odey £1.8m and ban him from the UK financial services industry “for a lack of integrity”.
The Financial Conduct Authority says that it believes Odey “deliberately sought to frustrate” the disciplinary processes of his hedge fund, Odey Asset Management LLP (OAM) “to protect his own interests”, following allegations of sexual harassment.
The FCA says:
Mr Odey showed reckless disregard for OAM’s governance, causing OAM to breach certain regulatory requirements. In addition, the FCA considers that Mr Odey’s behaviour towards both OAM and the FCA lacked candour.
The FCA considers Mr Odey’s conduct demonstrated that he is not a fit and proper person to perform any function related to regulated activities.
Odey has referred his Decision Notice to the Upper Tribunal where he and the FCA will present their cases, meaning the FCA’s findings are provisional.
The regulator explains that Odey used his majority shareholding in OAM to remove the existing members of its executive committee, just weeks before he was due to appear for a disciplinary hearing in January 2022. Having appointed himself ExCo’s sole member, Odey decided the disciplinary hearing into his conduct would be indefinitely postponed since he said he was unable to conduct it with impartiality, the FCA explains.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA said:
“A culture of silence in which allegations of misconduct are not dealt with effectively can put consumers and markets at risk. Mr Odey repeatedly sought to evade and obstruct efforts to hold him to account. His lack of integrity means he deserves to be banned from the industry.”
The FCA’s ruling follows allegations published last year by the Financial Times, with Tortoise Media, which reported claims of sexual assault and harassment against Odey from 20 women. The allegations led to him being removed from his hedge fund business, and in October 2023 OAM announced it was closing.
Odey has previously denied the allegations against him, and is suing the FT for libel, seeking at least £79m in damages.
Despite the Trump trade wars, the OECD has slightly revised up its forecast for China’s growth this year.
China is now forecast to grow by 4.8% this year, up from 4.7% previously.
But, it adds:
Growth in China is projected to slow from 4.8% this year to 4.4% in 2026.
The OECD says:
These projections are based on an assumption that bilateral tariffs between Canada and the United States and between Mexico and the United States are raised by an additional 25 percentage points on almost all merchandise imports from April.
Chancellor of the Exchequer Rachel Reeves has broken off from her battle against growth-hampering regulation to respond to the OECD’s new forecasts.
She says:
“This report shows the world is changing, and increased global headwinds such as trade uncertainty are being felt across the board.
“A changing world means Britain must change too, and we are delivering a new era of stability, security and renewal, to protect working people and keep our country safe.
“This means we can better respond to global uncertainty, with the UK forecast to be Europe’s fastest growing G7 economy over the coming years – second only to the US.”
OECD cuts growth forecasts, blames trade war
Newsflash: The OECD has slashed its forecast for growth among advanced economies this year, as Donald Trump’s trade war bites.
In its latest economic outlook, the OECD has lowered its forecast for growth among G20 countries this year to 3.1%, down from 3.3% expected in December.
Canada’s growth forecast this year has been more than halved, from 2% to 0.7%.
Mexico’s economy is now forecast to contract this year, by 1.3%, down from a previous forecst of 1.2% growth.
Overall the 2025 global growth forecast has been cut to 3.1% from 3.3% in 2025.
The OECD has also trimmed its forecast for UK growth in 2025, from 1.7% to 1.4%. That would make the UK the second-fastest growing G7 country this year, after the US (+2.2%), with Germany, France, Italy and Japan’s growth forecasts also lowered.
In the report, the OECD warns that “significant changes have occurred in trade policies” that would hit global growth and raise inflation. It cites the 25% levy on Mexico and Canada. saying:
These projections are based on an assumption that bilateral tariffs between Canada and the United States and between Mexico and the United States are raised by an additional 25 percentage points on almost all merchandise imports from April.
The Paris-based think tank adds:
Global GDP growth is projected to moderate from 3.2% in 2024, to 3.1% in 2025 and 3.0% in 2026, with higher trade barriers in several G20 economies and increased geopolitical and policy uncertainty weighing on investment and household spending.
Recent activity indicators have begun to point to a softening of global growth prospects. Business and consumer sentiment have weakened in some countries, and indicators of economic policy uncertainty have risen markedly around the world.
Updated
Photos: Reeves meets the regulators this morning
UK defence company Qinetiq hit by “geopolitical uncertainty”
These should be boom times for defence companies, as European countries pledge a massive spending increase to protect the region.
But UK defence company Qinetiq has surprised the City with a profits warning this morning, knocking its shares down by a fifth.
Qinetiq told shareholders this morning that it has continued to experience “tough near-term trading conditions”, which have hurt its work in our UK Intelligence and US Sectors.
As well as delayed contracts, Qinetiq has also suffered from “geopolitical uncertainty”.
Qinetiq now expects organic revenue growth of 2% this financial year, down from the “high single digit organic revenue growth” it was predicting back in January.
It is taking a goodwill impairment charge of £140m, as well as a non-cash charge of up to £40m due to US operations, “predominantly in our legacy US operations”.
Qinetiq are the top faller on the FTSE 250 share index, down 21%. Other UK defence companies are in the red too, with BAE Systems down 0.5%, and Babcock down 0.3%.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, says:
There have been high hopes that the pledge from European nations to swell military budgets amid heightened geopolitical tensions would translate into a flurry of new contracts.
But as alliances shape shift, the uncertainty has been more of a curse than a blessing. Qinetiq has been best with contract delays, not just for its US arm, but also its UK intelligence business. It’s undergoing a re-evaluation and restructuring of its US business to help revive growth.
Lay-offs at the US defense department may exacerbate its current problems, given that its short-term contracts in the US which appear to have already been hit hard. It seems spending decisions are being delayed amid the uncertainty.
Updated
The Government wants to make sure that there is “less duplication in the system” when it comes to regulation, a Treasury minister has said.
Emma Reynolds, the economic secretary to the Treasury, told BBC Breakfast:
“We want to ensure that there is less duplication in the system.
“That means that we shouldn’t have the layering upon layering of regulation, but it’s also the case that some regulators are being folded into other regulators.
Because companies that want to set up and grow are facing sometimes two sets of very similar rules or very similar processes to gain authorisation, and we don’t think that that is a good use of resources, for one, but also it’s slowing down growth, and it’s slowing down the initiative and entrepreneurship of British business.”
Updated
Reeves expected to restrict UK competition watchdog’s merger investigations
Rachel Reeves is expected to defang Britain’s competition regulator, restricting its powers to investigate mergers.
According to the Financial Times, the chancellor will say she plans to update the two main tests that determine whether the Competition and Markets Authority should probe a merger.
They say:
One test, known as “share of supply”, allows the CMA to investigate deals that would result in a company controlling 25 per cent of the supply of goods and services in a market.
The second “material influence” test can give the antitrust regulator power over purchases of certain interests in a business, such as significant shareholdings, even if they fall short of total control. Officials said Reeves wanted to “tighten” and “limit” the circumstances in which deals come under CMA scrutiny.
Tightening and limiting the circumstances in which deals come under CMA scrutiny could help companies pull of mergers.
Ministers have already shaken up the CMA by installing the former boss of Amazon UK, Doug Gurr, as interim chair, replacing Marcus Bokkerink, who agreed to stand down.
Last month, the CMA’s chief executive, Sarah Cardell, argued that the regulator’s new growth focus did not clash with its core mandate to support competitin.
Cardell told the Guardian:
“I don’t see there being a fundamental tension between the two and we haven’t got a growth duty that’s coming in over and above. Our statutory functions are to promote competition and protect consumers. Those fundamentals haven’t changed.
“It’s about making sure that the way in which we discharge those statutory duties is done in a way that helps to contribute to driving growth, building that business investor confidence.
“We are looking for more pace, for more predictability, proportionality, and making sure our processes work.”
Trump: Both reciprocal and sectoral tariffs coming on 2 April
Hopes that US president Donald Trump might sway away from deepening his global trade war next month have taken a knock overnight.
Trump has insisted that reciprocal and sectoral tariffs will be imposed on US trading partners on 2 April, and also insisted that he has no intention of creating exemptions on steel and aluminum tariffs.
Speaking to reporters on Air Force One, Trump was asked if he would be imposing sectoral and reciprocal tariffs on 2 April, as has been previously suggested.
He replied “In certain cases, both,” adding:
“They charge us, and we charge them. Then, in addition to that, on autos, on steel, on aluminum, we’re going to have some additional.”
Reciprocal tariffs are taxes on imports to the US which are set at a similar rate to taxes other countries put on goods they import from the US, while sectoral tariffs would target a particular type of products – such as automobiles, steel, aluminum, microprocessors, and pharmaceuticals.
The comments are a sign that Trump is determined to press ahead with a more aggressive trade regime, despite having upset US allies – and spooked the financial markets – by announcing and imposing tariffs since returning to power.
Trump insists, though, that slapping tariffs on imports to the US makes sense:
“April 2 is a liberating day for our country.
We’re getting back some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing.”
Updated
Starmer: I’ll cut regulation and unleash animal spirits
Sir Keir Starmer is promising to “bring back the animal spirits of the private sector” by cutting the burden of regulation.
Writing in City AM this morning, Starmer says “it is an outrage” that the government does not know how much it costs business to comply with regulations.
He is promising to lead the first government to baseline these costs, and cut them by 25% by the end of this parliament.
In a notably pro-business column, the PM says the government must “unleash the power of the private sector” if it is to deliver economic growth.
That, he says, means:
Entrepreneurs who work day and night to build a business from scratch. Family companies that have passed know-how across the generations. Iconic British companies employing thousands of people across all sectors. Investors who provide the capital and expertise that fuels growth and innovation.
Starmer adds that the government is “kicking off a short, sharp process” to identify regulators that can be cut or merged, as part of his drive to cut ‘quangos’, concluding:
Reshaping our state, our regulatory system, our economy, is not the work of weeks and months. It will take years of discipline, focus and a willingness to make tough choices.
But my government is taking on that challenge to bring back the animal spirits of the private sector, and to make Britain the best place in the world to start and build a business.
IoD welcomes 'rebalancing' of regulation
The Institute of Directors has welcomed the government’s plan to shake-up regulation, calling it “a welcome shift to a more growth friendly approach”.
Dr. Roger Barker, director of policy at the Institute of Directors, says:
“Compliance with burdensome regulation is frequently cited by IoD members as one of the top factors having a negative effect on their businesses. Although well-designed and proportionate regulation has a valuable role to play in a modern economy, the current UK framework does not sufficiently prioritise growth and innovation. It is hence appropriate for the government to rebalance its approach with a pro-business orientation at its core.
“In our Spending Review submission in February, the IoD called on the government to reinstate a Business Impact Target for new regulation over the life of the Parliament. We are therefore delighted that the government has listened to this recommendation and is now committed to reducing the administrative costs of regulation on business by 25% through this Plan. Meaningful progress against this target will be crucial for supporting businesses and growing the economy.
“In addition to the measures announced today, we would also like to see the government apply more rigorous and timely impact assessment procedures when considering new regulation. Non-regulatory solutions should always be considered, and the business case for new regulation should be subject to proper independent scrutiny by the Regulatory Policy Committee. There should also be a commitment to reviewing the ongoing effectiveness of existing regulation at regular intervals.”
Rachel Reeves is expected to use today’s meeting to unveil 60 measures that regulators have agreed to undertake to boost economic growth.
The BBC had a handy list of what’s expected:
Fast-tracking new medicines through a pilot to provide parallel authorisations from healthcare regulators
Reviewing the £100 cap on individual contactless payments
Simplifying mortgage lending rules to make it easier to re-mortgage with a new lender and reduce mortgage terms
Setting up a ‘concierge service’ to help international financial services firms navigate regulations
Civil Aviation Authority permitting at least two more large drone-flying trials for deliveries in the coming months - which the government said has already cut travel times for blood samples between hospitals from 30 minutes down to two minutes
Introduction: Reeves to meet regulators in drive to cut red tape
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The UK government has the regulators in its sights as it tries to squeeze more growth out of the economy.
Chancellor Rachel Reeves is to meet with representatives from financial, environmental and health regulators today, in a push to cut bureaucracy and lower the cost of regulation for business.
She’s expected to unveil an “action plan” to cut red tape by reducing the number of bodies which oversee sectors of the economy that are crucial to boosting growth.
Speaking ahead of the meeting, the chancellor says:
“Today we are taking further action to free businesses from the shackles of regulation.
“By cutting red tape and creating a more effective system, we will boost investment, create jobs and put more money into working people’s pockets.”
The meeting will be attended by the Financial Conduct Authority, Prudential Regulation Authority, the Environment Agency, Natural England, the medicines regulator and the Information Commissioners’ Office.
Between them, these regulators look to protect consumers, businesses, patients and the environment – but ministers seem determined to prevent them clogging up the economy.
The government’s message, as it surveys an economy that shrank slightly in January, is that “regulators must work for the people...not get in the way of progress”.
On the environmental side, the government hopes to stop infrastructure projects being delayed by protection demands – an issue highlighted recently by the £100m bat shelter built for the HS2 trainline.
The Treasury also plan to slim down the legal duties of regulators, such as those in financial services, energy watchdog Ofgem and water regulator Ofwat, “so that they do not waste time satisfying redundant duties”.
One body, The Payment Systems Regulator, has already felt Reeves’ axe – its abolition was announced last week.
Rain Newton-Smith, chief executive of the Confederation of British Industry, said the UK’s “Gordian knot of regulations” hindered investment with compliance costs that were too high “leaving us trailing the international competition”.
She said:
“Today’s announcement signals a shift towards a more proportionate, outcomes-based approach that should deliver more sustainable growth and investment.”
The agenda
9am GMT: Italian inflation report for February
10am GMT: OECD interim economic outlook
12.30pm GMT: US retail sales report for February
2pm GMT: US NAHB housing market index
