The key takeaways from Wednesday’s Budget

📍Top line: Chancellor Rachel Reeves has announced Labour's first budget since their return to power, presenting £40 billion in tax hikes to boost funding for healthcare, education, and public services.

Key Budget Highlights:

Personal Taxes

• Income tax and NI rates remain unchanged, but tax bands will adjust with inflation post-2028.

• Capital gains tax increases from 10% to 18% (basic) and from 20% to 24% (higher) on share sales.

• Inheritance tax thresholds frozen until 2030, with stricter exemptions on farmland from 2026.

Business taxes

• NI for companies rises to 15% on salaries above £5,000.

• Employment allowance for smaller companies to increase to £10,500.

• Private equity tax on profit shares up to 32%.

Wages, Benefits, and Pensions

• Minimum wage for over-21s rises to £12.21 per hour.

• State pensions increase by 4.1%, maintaining the triple lock policy.

• Higher earnings threshold for carer’s allowance, increasing to £195 weekly.

Transport

• Continued fuel duty cut; single bus fares outside major cities rise from £2 to £3.

• Commitment to extend HS2 to Euston; £500 million for pothole repairs.

• Vehicle Excise Duty to double on less efficient petrol vehicles to promote EV adoption.

Drinking and Smoking

• New vaping liquid tax of £2.20 per 10ml from 2026.

• Tobacco tax increase of 2% above inflation; hand-rolling tobacco rises by 10%.

• Higher inflation-linked tax on non-draught alcohol; 1.7% cut on draught drinks tax.

Government Spending & Public Services

• NHS and education spending increases by 4.7%; defense budget grows by £2.9 billion.

• Home Office budget cuts by 3.1% this year and 3.3% next year.

• Additional £1.3 billion funding for local councils; all Right to Buy proceeds to stay with councils.

Starbucks’ fight back plan revealed

📍Top line: In his first call with Wall Street analysts since joining Starbucks last month, CEO Brian Niccol unveiled a series of measures aimed at revitalising the company’s image and improving customer experience.

Key Points:

• New Leadership Vision: CEO Brian Niccol, former Chipotle CEO, aims to bring Starbucks “back to its roots” as a welcoming coffee house.

• Menu Adjustments: Simplifying a “too complex” menu to streamline service and reduce barista stress; removal of olive oil-infused coffees.

• Pricing Strategy: No menu price hikes at company-owned stores this fiscal year; elimination of non-dairy milk surcharges.

• Ceramic Mugs & Sharpie-Labeled Cups: To create a more personal, inviting atmosphere, Starbucks will prioritise serving in ceramic mugs for in-café customers and reintroduce Sharpie-labeled cups, giving baristas a way to add a personal touch to each order.

• Operational Changes: Prioritising timely service with a goal to deliver drinks within four minutes and adding dedicated mobile order pick-up areas.

• Shareholder Response: Starbucks shares have risen 25% since Niccol’s appointment in August, with marginal after-hours gains following Wednesday’s announcements.

Elsewhere in business:

🛍️ The European Union is gearing up to investigate Temu, a Chinese e-commerce platform, over alleged failures to prevent the sale of illegal products on its site. This probe, which may launch in the coming days under the Digital Services Act, could lead to fines as high as 6% of Temu's annual global revenue.

🍺 Ryan Reynolds and Rob McElhenney have expanded their North Wales investments by becoming co-owners of Wrexham Lager Beer Company Ltd, partnering with the Roberts family, who have managed the brewery since 2011. Founded in 1882, Wrexham Lager is the oldest operational lager brewery in Britain and was famously the only lager served on the Titanic’s fateful voyage, as noted on the brewery’s website.

Rail fares and railcard prices to increase

📍 Top line: The government has announced a 4.6% rise in regulated train fares in England starting in March 2025, alongside a £5 increase for most railcards. The increase was detailed in the Treasury's budget documents rather than in Chancellor Rachel Reeves's speech to the House of Commons, where she focused on new tax measures and funding pledges for education and health.

Key Points:

• Fare Increase: Regulated train fares in England to increase by 4.6%, effective March 2, 2025.

• Railcards: Most railcards, which offer travel discounts, will see a £5 price increase, but this will not apply to Disabled Persons Railcards.

• Regulated Fares: Cover 45% of fares, including season tickets for commuters and off-peak returns, while other fares are set by operators and typically rise similarly.

• Inflation Context: The increase is one percentage point above July’s Retail Prices Index (RPI) inflation measure.

• Government Justification: The Treasury calls it the "lowest absolute increase in three years," with railcard users reportedly saving an average of up to £158 annually.

Elsewhere in the economy:

💳 Sweden and Norway are reconsidering their moves toward cashless societies due to concerns that fully digital payment systems could leave them exposed to security threats linked to Russia. The rapid increase in hybrid warfare and cyber-attacks has raised alarm in both countries, which had been on track to go nearly cashless given high digital literacy rates, advanced internet infrastructure, and popular mobile payment systems.

🇬🇧 The abolition of the UK’s non-dom tax regime, announced by the chancellor, is likely to lead to a greater exodus of wealthy residents than initially expected, according to the Office for Budget Responsibility (OBR). Starting next April, tens of thousands of British residents who claim non-domicile status will be required to pay tax on their global income and capital gains.

Meta has opened applications for its 2025 Product Design Internship in London. Successful applicants will work within Meta’s product and infrastructure teams to make sure products and services are both reliable and scalable. The scheme is open to undergraduate students currently studying a computer science or related degree. Apply now here.

Reddit reports first profits in history

📍Top line: For the first time in its 20-year history, Reddit has turned a quarterly profit, announcing $29.9 million in net income, which sent its shares soaring by over 35% on Wednesday. The platform also reported 100 million monthly users, marking a 47% increase from the previous year.

Key drivers of this milestone include:

• User Growth via AI Translation Features: CEO Steve Huffman attributed part of the surge in users to a new AI feature that translates English posts into French, Spanish, Portuguese, Italian, and German. Plans are underway to expand this feature into additional languages, according to Huffman’s statement.

• AI Content Licensing: Reddit’s revenue benefitted from content licensing partnerships with tech giants Alphabet’s Google and Microsoft-backed OpenAI, which use Reddit’s content to train their AI models.

• Increased Ad Spend and Sports Partnerships: Advertising demand remains robust, boosted by Reddit’s partnerships with sports organisations like the NBA, which has drawn in sports fans and advertisers alike.

Elsewhere in tech:

🎮 Call of Duty: Black Ops 6 set new records upon its release last Friday, marking the biggest debut yet for the long-running game series. The latest installment not only achieved unprecedented day-one player numbers but also drove a surge in Xbox Game Pass subscriptions. The game’s popularity extended across platforms, with unit sales on rival PlayStation and Steam increasing by 60% compared to the previous year.

🚗 BYD, China’s largest electric vehicle maker, has surpassed Tesla in quarterly revenue for the first time, reporting third-quarter earnings of Rmb201bn ($28.2 billion) compared to Tesla's $25.2 billion. This revenue boost was driven by a record 1.1 million cars sold and supported by new government subsidies.

✈️ Two American passengers were removed from a Heathrow flight on Monday following a brawl reportedly sparked by a Trump "Make America Great Again" hat, causing a two-hour delay. The incident began when one woman allegedly demanded that the other take off the red cap, escalating to punches when the request was ignored.

🇪🇸 At least 95 people have lost their lives in Spain as flash floods ravaged eastern regions, leaving widespread destruction. Intense rainfall flooded roads, derailed a train, and damaged numerous homes. Authorities are urging residents in heavily impacted areas, such as Valencia, to remain indoors.

🇬🇧 A case of mpox, previously known as monkeypox, linked to the Clade 1b outbreak in Africa, has been identified in the UK. The infected individual recently returned from a holiday in one of the affected regions and began experiencing flu-like symptoms a day after their return, with a rash appearing on October 24.