Two-thirds of millionaires left Britain to avoid 50p tax rate

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In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.  

Read More at telegraph.co.uk . By Robert Winnett.

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Britain Shocked by Worsening Trade Deficit

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Britain’s trade with the rest of the world swung unexpectedly further into the red in March, according to the latest figures from the Office for National Statistics. In a shock to City economists who had expected the improvement seen in recent months to pick up speed, the deficit on goods instead lurched to £7.5bn, from £6.3bn in February.

Imports, despite the slowness of the recovery, were robust, up by 5.2 per cent in value terms; exports were anaemic – a mere 1 per cent up. In volume terms, imports were up 3.5 per cent and exports fell by 1.8 per cent.

Adding in the service sector, the overall trade deficit widened from £2.2bn to £3.7bn.

Surveys of business confidence in manufacturing suggest that export order books are filling up and should feed through to a better performance over the next year. The volume of semi-manufactured goods, to be finished in the UK, and raw materials imported in March also suggests a prospective improvement. The ONS also pointed to a hold-up in exports reaching the ports after January’s cold weather slowed production.

Read More: – By Sean O’Grady, The Independent

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U.K. Consumer Morale Plunges to Two Year Low

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Consumer morale suffered its biggest fall since July 2008 last month, wiping out all gains since the start of the year due to a sharp drop in optimism about the next six months, a survey showed on Thursday.

The Nationwide Building Society said its monthly consumer confidence index fell to 72 in March, the lowest since December, from a two-year high of 81 set in February.

Driving the fall in the main index was a record drop in the expectations component, which Nationwide blamed on uncertainty about the economic outlook due to the upcoming election.

Read More: – Reuters

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Weak Lending Threatens U.K. Recovery

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Bank lending to business and home buyers remains critically weak, according to the latest data from the Bank of England, endangering the revival in the housing market and the wider economic recovery.

Bank lending to “real economy” firms rose by just £100m in February – 0.3 per cent – and mortgage approvals fell back again.

The news comes as the revised figures for GDP growth in the fourth quarter of last year are due today. An upgrade from 0.3 per cent to 0.4 per cent is expected, but economists are more concerned about a setback in the early months of this year.

Some of the fallback in mortgages can be attributed to the depressing effects of the rush to borrow before the stamp duty holiday ended on 31 December, but analysts point out that the underlying trend remains feeble.

Read More: – By Sean O’Grady, the Independent

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Are the Brits headed for the PIGS sty?

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Is the United Kingdom in danger of being exiled to the island of misfit debtors?

For most of the past year, anxiety about overextended governments has focused on the southern European countries derisively known as the PIGS — for Portugal, Italy, Greece and Spain. But the PIGS may soon have company.

U.K. officials this week released a budget that was short on cost-cutting details. Silence on that unpopular subject was hardly surprising, given the U.K. economy’s slow recovery and the political jockeying ahead of a national election that is expected to take place in early May. The move wasn’t the biggest stunner in a week that saw a downgrade in Portugal, squabbles over a Greek bailout and a selloff in long-dated U.S. government bonds.

Even so, observers warn of a squandered opportunity to quell fears over the cost of financing a recovery in the hard-hit U.K. economy. Government spending is on track to account for more than half of U.K. gross domestic product in 2010, while government debt is heading toward 64% of GDP next year, up from 44% in fiscal 2009.

Read More: – By Colin Barr, senior writer, Fortune

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U.K. officials arrest 6 in insider trading probe

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Britain’s financial regulator says six people have been arrested in what it described as its largest insider trading investigation to date.

A statement from the Financial Services Authority on Tuesday said two of the six are senior professionals in London’s financial district and that another worked for a hedge fund. No charges have been laid.

Read More: – the Associated Press

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Greece Now, U.K. Next as Scots Ready for Pound Plunge

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While the eyes of the world focus on Greece’s debt crisis, investors in Edinburgh are busy preparing for the U.K. to be next.

Turcan Connell, which caters to rich families, expects the pound to lose between 20 percent and 30 percent against the dollar once investors turn their sights on Britain as the government sells a record amount of debt. Sterling slid to a 10- month low versus the U.S. currency today.

“Alarm bells were ringing in Greece for a long time and when it happened, it happened very quickly,” Haig Bathgate, head of strategy at Turcan Connell, said at the company’s offices in the Scottish capital. “The U.K. is in a similar predicament. It could be hit very hard.”

Read More: – By Rodney Jefferson, Bloomberg

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U.K. Races to Bottom of Economies for Investors in Global Poll

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Prime Minister Gordon Brown and the U.K. are leading a race they would rather not win: to the bottom.

Global investors are more pessimistic about the U.K. than any other major economy and Brown gets overwhelmingly negative reviews, according to a global quarterly poll of investors and analysts who are Bloomberg subscribers. It shows that 66 percent of respondents are pessimistic about the investment climate in the U.K., which tops the list.

This downbeat attitude extends to Brown, whose government has produced record budget deficits and imposed a 50 percent tax on bank bonuses. Among global respondents, 62 percent hold an unfavorable view of him. Those numbers are even worse when it comes to respondents in the U.K. alone: 86 percent of British residents said they hold an unfavorable view of their political leader. That includes 63 percent who are very unfavorable.

In a list of nine global political, economic and financial figures, only one person does worse than Brown: former U.S. Republican vice-presidential candidate Sarah Palin.

Read More: – By Mike Dorning, Bloomberg

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