Economy
UK budget lifts tax on bank profits to extend energy support
The U.K. government will hike a surcharge on profits earned by banks operating in the country to help offset soaring energy bills, Treasury chief John Healey said Wednesday, while announcing the highly anticipated budget.
The additional corporate tax rate will double to 6% to finance a one-off subsidy to millions of households struggling with higher energy costs, Healey told parliament as he delivered an annual budget report.
He used his first budget statement to offer households and businesses support with their energy bills this winter in the face of what he termed “global economic storms.”
Healey, who was appointed chancellor of the exchequer in July when Andy Burnham became prime minister, said the Iran war was not something the British government wanted.
As a result, he said his “choice in the budget today is to give families and businesses some breathing space now,” as the consequences of the conflict in the Gulf played out.
“For families, that means higher prices at the pump, higher energy bills and higher mortgages,” he said in his statement, arguably the key set piece of the parliamentary calendar.
“For businesses, higher running costs and more expensive loans. And the impact is felt in the public finances too. Driven by the conflict in the Middle East, government borrowing costs across the G-7 are reaching highs not seen for decades.”
Among the support measures announced in the early stages of Healey’s speech was a 100-pound ($133) one-off payment this winter that will help 20 million lower- and middle-income households.
Other measures included the extension of a cut in the sales tax on electricity bills and the abolition of a charge paid on gas bills.
Energy bills are set to spike sharply in the coming months. The Iran war and the ensuing bottlenecks in the Strait of Hormuz have squeezed global oil and gas supplies, pushing prices higher.
With the public finances already stretched, Healey announced some tax rises to pay for the measures.
Bank tax on profits hiked to 6%
One source of revenue is to come from the banks, which have benefited from higher interest rates. Healey increased the surcharge on their profits from 3% to 6% but only for 15 months from January.
“Amid global economic storms, I am looking to our banks to help fund breathing space for British families,” he said.
Another revenue source will come from the gambling sector by increasing the machine games duty.
Healey said the British economy has been more resilient than anticipated this year and will grow by 1.2% in 2026, more than previously predicted.
However, he says inflation is higher than predicted earlier this year and likely to remain so for the coming year or two.
Inflation in the U.K. has risen to a near one-year high of 3.5% and is expected to rise further in the coming months. As a result, the Bank of England (BoE) is expected to raise interest rates soon, which will further raise the costs to the government of servicing its debt.
Low-key budget
Outside of the energy price support, Healey’s overall budget was low-key, especially at a time when bond markets are fretting over debt levels around the world. France has been in the spotlight recently following a wave of protests that have exposed the parlous state of its finances.
The main problem facing Healey is the same as that which confronted his predecessor Rachel Reeves, who was chancellor after Labour returned to power in a landslide election victory – the country’s debt mountain.
Even though the trajectory of the public finances was recently given a nod of approval from the International Monetary Fund (IMF), the U.K.’s debt has passed 3 trillion pounds for the first time ever, requiring 8% of government spending to service it.
Healey said that in forecasts provided by the independent Office for Budget Responsibility, the U.K. will spend 14 billion pounds more on debt interest this year.
“Those are the storms we face,” he said. “We can’t wish them away.”
Online marketplaces to collect tax from sellers
Healey also said on Wednesday he would make online marketplaces responsible for collecting value added tax (VAT) owed by retailers selling on their platforms.
“I will strengthen the requirements for online marketplaces so that sellers cannot avoid paying VAT when they sell online,” Healey said in his budget speech to parliament.
The change means that online marketplaces, such as Amazon, eBay, Temu, Shein and Alibaba, will become responsible for collecting the VAT which is charged on sales by sellers on their sites.
The finance ministry said the change, to be implemented from October 2027, is designed to tackle VAT evasion and support competition by helping ensure businesses that pay the tax they owe are not undercut by those that do not.
The rules will apply to U.K. businesses that are VAT registered or make sales of more than 90,000 pounds on an individual online marketplace.
German chemicals giant BASF lifted its 2026 profit outlook for the second time this year on Wednesday as it hiked prices to clients following the outbreak of the Iran war.
The maker of products ranging from automotive paints to sunscreen ingredients now expects a core profit of 7.4 billion to 7.8 billion euros ($8.2 to $8.7 billion) this year, up from a previous forecast of 6.9 billion to 7.7 billion euros.
BASF’s earnings have been boosted after it hiked prices for some goods in March by up to 30% in response to surging costs for energy and other raw materials because of the U.S.-Israeli war against Iran.
The company said Wednesday that its core profit in the third quarter rose 15% from the period last year to 1.6 billion euros.
Overall sales were up 14% over the period at 16.4 billion euros.
“The increase was mainly driven by considerably higher prices (plus 12%) and slightly higher volumes (plus 2%),” the company said in a statement.
The results come as the European chemicals industry is under major pressure from high energy prices and increasingly intense competition from Asian rivals.
BASF is undertaking a major restructuring, cutting thousands of jobs at its historic German headquarters in Ludwigshafen after opening earlier this year a major chemical complex in China to serve Asian markets.
The company is also exploring the multibillion-euro acquisition of its German rival Evonik, saying the combination could let it obtain feedstocks and precursor chemicals at lower cost.
“This is a serious attempt,” chief executive Markus Kamieth told a press conference about the proposed merger.
“We’re committed; this is certainly not something that is going to drag on for years,” he said.
Turkish authorities set Oct. 30 as the date to begin interim payments in the funds undergoing “extraordinary” liquidation as part of the ongoing process affecting dozens of funds following the launch of an investigation last month.
Vice President Cevdet Yılmaz said on Tuesday, while speaking in front of the parliamentary Plan and Budget Commission, that the payments would commence as of Friday following the national holiday on Thursday.
“As of Friday, I can say that the payments will begin. As part of the extraordinary liquidation, payments up to TL 1 million will begin as of Friday, through Işbank and Ziraat Bank,” he said.
Authorities announced a series of measures since the middle of September to shore up market stability after some investment funds defaulted on redemption requests, triggering a sharp sell-off in Türkiye’s benchmark stock index.
They announced the liquidation of 131 funds managed by seven companies. The liquidation process has been split into ordinary and extraordinary procedures.
The vice president said that the payouts in the ordinary process “have been largely completed.”
“Payments will be made starting from the lowest amount, moving to higher amounts. These payments will be covered from three sources: the remaining balances in the funds, voluntary returns, and resources that can be quickly converted into cash. We expect that the payments to be made with these sources will be completed within 1-2 weeks, by mid-November,” Yılmaz said.
“We are making every effort to ensure that the relevant institutions make the payments as quickly as possible. I can say that a significant amount will be paid on Friday,” he added.
The Capital Markets Board (SPK) said earlier this week that it has decided to temporarily suspend the capital markets activities of Tera Portföy and Pusula Portföy and appoint banks to carry out the liquidation of funds established by the companies.
These companies were among those at the center of the investigation that was launched after a sell-off in September.
On Wednesday, the eighth meeting of a special fund coordination board established following the market turmoil was also held under the chairmanship of Yılmaz, the Directorate of Communications said in a written statement.
The meeting was attended by representatives from the Justice Ministry, the Treasury and Finance Ministry, and the relevant institutions and organizations affiliated with these ministries, the directorate said.
It also said that since the beginning, “the number of funds in liquidation has decreased from 131 to 38, and a total of TL 68 billion in-kind and cash liquidation payments have been made to 71,899 accounts.”
The statement also confirmed that interim payments in the funds included in the extraordinary liquidation process are expected to begin on Friday, Oct. 30, 2026.
Close to half a million investors were impacted in the case.
Türkiye’s foreign trade deficit narrowed in September compared to the same month last year as exports grew much faster than imports, official data shared by the Turkish Statistical Institute (TurkStat) showed on Wednesday.
The trade deficit dropped to $5.16 billion in September from $6.96 billion a year ago, the data revealed.
This marked a 25.8% decrease compared with September 2025.
In September, exports jumped by 15.3% on an annual basis to nearly $26 billion, while imports rose only by 5.6% to $31.1 billion.
Excluding energy products and non-monetary gold, the foreign trade shortfall was $541 million, TurkStat said.
Türkiye’s main partner country for exports during September was Germany, followed by the U.S., the U.K., Iraq and Italy. The country imported more from China, followed by Germany, the U.S. and Italy.
In the January- September period this year, exports stood at nearly $211 billion, with a 5.2% increase, and imports were $281.9 billion, up 5.3% year-over-year, respectively.
Shares of billionaire Mukesh Ambani’s Reliance Jio Platforms climbed as much as 21% at the start of trading on the Mumbai stock exchange on Wednesday, making it India’s second-largest company by market capitalization, valued at about $131.5 billion.
The listing, the first for the Reliance conglomerate in two decades, furthers Ambani’s plan to turn Reliance from an oil-and-chemicals conglomerate into an “everything company” spanning consumer products and technology.
Jio, whose telecoms business serves more than 530 million customers, is backed by Meta Platforms and Alphabet’s Google. Its user numbers are second only to China Mobile on the basis of single-country subscribers.
The listing ceremony on Wednesday in Mumbai was attended by members of the Ambani family, including Mukesh’s eldest son, Akash, who is Jio’s managing director. Before walking to the stage to speak, he touched his parents’ feet, a traditional gesture of respect.
While all three children of the senior Ambani gave speeches, Mukesh sat in the audience, visibly emotional and in tears.
Mukesh Ambani, Asia’s richest person according to Forbes magazine, has spent years shaping a succession plan that was intended to avoid a repeat of the public feud with his younger brother, Anil, that followed their father Dhirubhai’s death in 2002 without a will.
To celebrate the listing, Reliance is hosting a celebration for employees at its large office near Mumbai, with jam sessions and other performances planned, an internal memo showed.
Jio’s stock opened at 1,358 rupees a share, compared with its 1,119-rupee offer price. Its market capitalization overtook those of telecom firm Bharti Airtel and HDFC Bank, making it the second-largest Indian firm by that metric.
“The IPO price offered a valuation entry point; the listing price reflects a much greater degree of optimism,” said Aishvarya Dadheech, founder of Fident Asset Management.
‘Thank you, India’
Several brokerages see a potential upside for the Jio stock, but they flagged competition, heavy capital spending and changes in India’s telecom rules, including those related to spectrum, licensing and fees.
“Jio has had a strong debut even despite geopolitical issues and turbulent market conditions … the revenues and earnings will lead the stock here onwards,” said Kranthi Bathini, equity strategist at WealthMills Securities.
The Ambani family rang the IPO bell on stage at the National Stock Exchange in Mumbai. Mukesh Ambani watched as Anant traced Reliance’s and Jio’s legacies and journey in a speech at the ceremony.
Major Indian newspapers on Wednesday carried front-page ads from Reliance Jio, saying, “Thank you, India.”
India has become the world’s busiest IPO market this year in terms of the number of deals, with 246 listings so far, though it ranked fourth by money raised at $13.5 billion, behind the US, mainland China and Hong Kong, LSEG data showed.
Including Jio Platforms’ record IPO would lift India above Hong Kong’s $15.4 billion, according to Reuters calculations.
Despite its size, Jio Platforms’ IPO was not a record payday for its bankers. Its 19 bankers will split about $20.7 million, or 0.65% of the offer, roughly half the 1.3% that sources said Hyundai Motor India paid to its bankers in 2024.
Wealth generator
The Jio listing is the Ambanis’ latest turn at the stock market. Dhirubhai Ambani, Mukesh’s father and Reliance’s founder, took the company public in 1977 with an offering aimed at small retail investors, which was widely credited with helping build India’s equity culture.
Jio comes from a stable that Indian investors have long backed: parent Reliance Industries has returned about 900% since 2006, ahead of the Nifty’s 685%, LSEG data shows, and is often seen as a buy-and-hold staple in retail portfolios.
After the ceremony, people waved flags bearing the Jio logo next to the National Stock Exchange’s bull statue, where the Ambani family posed for pictures.
Britain’s Chancellor of the Exchequer John Healey is set to announce a cautious budget plan on Wednesday as he tries to avoid piling more bond market pressure on the new government of Prime Minister Andy Burnham.
Banks, gambling firms and online marketplaces such as Amazon and Temu are expected to be hit with higher taxes. That would help to pay for support for poorer households facing high energy bills and to freeze fuel duty for drivers.
Healey – a former trade union official and a junior Treasury minister in the 1990s – says he wants to give Britain “a bit of breathing space” from the impact of the Iran war that is pushing up inflation.
“This budget is about getting through this difficult moment. But it’s also about putting Britain on a future path, a better future path,” he said in a statement.
Devolution, defense and debt
His first budget – due to be announced in parliament just after 12:30 p.m. (1230 GMT) – will detail how the government plans to give regional mayors more control over tax revenues, part of Burnham’s devolution push.
Separately, more than £20 billion in extra support will go to state finance institutions to spur investment in artificial intelligence, defense and green energy by the early 2030s.
On entering Downing Street in July, Burnham promised “the biggest changes in the last 40 years”, including a bigger role for the state in the economy.
But Healey’s options are limited by the surge in borrowing costs for governments around the world including Britain, where investors remember the 2022 “mini-budget” of former Prime Minister Liz Truss and the ensuing bond market meltdown triggered by its unfunded tax cuts.
On Tuesday, Britain paid the highest interest on a 5-year government bond since 2008.
After big tax and spending increases in the two budgets of the previous Finance Minister Rachel Reeves, Wednesday is being framed as a “steady as she goes” moment for Britain’s economy, which has so far withstood the Iran war energy price shock.
Bond dealers polled by Reuters expect less than £10 billion in extra debt issuance this financial year, compared with April’s forecasts, though they see financing needs for next year being revised up by more than £25 billion.
In an attempt to ease some of Reeves’ big tax hit on employers, Healey has said he would reduce paperwork for businesses to save them £800 million a year.
Bigger policy changes – including how to fix the inflation hit to public spending – are likely to have to wait for a 10-year plan that Burnham has said he will announce later this year and a broad spending review in 2027.
But Healey is under pressure to say now how he intends to pay more for defense – an issue that caused him to quit as defense minister in June in a move that hastened Keir Starmer’s resignation as prime minister.
Possible savings from reforms to Britain’s fast-growing welfare spending could offer a bit of latitude later this year.
But Healey’s biggest hope is for an end to the Iran war, which would lower the government’s bill for servicing £3 trillion of public debt. That was already on course to gobble up more than 10% of public spending before the war began.
He has said he would stick to the government’s fiscal targets, key for maintaining the confidence of the bond market.
Britain’s budget forecasters are expected to say on Wednesday that the margin for meeting the more challenging target has fallen to £15 billion, from £24 billion in March.
The Treasury has announced a string of low-cost policies to try to show it can still help voters, including tariff cuts on some imported goods including gherkins and marmalade.
On Wednesday morning the government said it would remove standing charges on gas bills, fixed daily fees that are applied to bills regardless of usage levels. Instead the cost will be linked to the price of gas consumed, meaning those who use the least will pay less.
Sarah Coles, head of personal finance at investment platform AJ Bell, said targeted tax changes could help carers and parents. “For others they will be a drop in the ocean. Hard-pressed households will be hoping for more support,” Coles said.
Canada and the United Arab Emirates signed a comprehensive trade agreement Tuesday aimed at reducing trade barriers and attracting investment, as Canadian Prime Minister Mark Carney seeks to diversify economic partnerships amid strained relations with the United States.
Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan presided over the signing of the Comprehensive Economic Partnership Agreement (CEPA), which aims to cut tariffs, reduce red tape and improve market access for businesses in both countries.
Carney has vowed to double Canada’s non-U.S. trade over the next decade as President Donald Trump’s tariffs have rippled through Canada’s economy. Subsequent attempts for a deal with Washington have broken down, and that has pushed Carney to aggressively pursue trade pacts with countries from the Asia Pacific to Europe and the Middle East.
“Once fully implemented, the CEPA will reduce or eliminate tariffs on over 99% of current Canadian exports to the UAE. That means new markets for Canadian farmers growing pulses and canola, for manufacturers of industrial machinery and power generation equipment, for our world-class aerospace sector, and other Canadian innovators,” The Prime Minister’s Office said in a statement.
“The agreement will also address non-tariff barriers, create a more predictable environment for trade and investment, and expand market access for Canadian goods and services, including in the industrial, agricultural, forest, fish and seafood, environmental, and engineering sectors,” it said, adding CEPA is expected to enter into force in 2027.
The two countries also signed preliminary agreements on energy, diplomatic and defence cooperation.
“We see considerable potential for our private sector, whether through improved market access for our exporters or access to investment opportunities in high-growth sectors such as logistics, communications, advanced technology and manufacturing – all of which will support our pursuit of a resilient, diversified and globally connected economy,” UAE’s Foreign Trade Minister Thani Al Zeyoudi said in a statement.
He signed the CEPA deal with his Canadian counterpart Maninder Sidhu.
UAE is the largest Middle Eastern market for Canadian exports and is a big buyer of Canadian motor vehicles and parts, and machinery. Two-way trade between the countries was worth C$3.5 billion ($2.48 billion) last year. It has been growing at 10% annually for the last few years, according to government data.
The UAE last year also committed up to $50 billion in investment in Canada.
The signing is the last step before Canada’s Parliament can ratify the agreement, a Canadian government source said.
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