BELGIUM AUCTION PREVIEW: BELGIUM T-BILL AUCTION PREVIEW: On offer next week

In the Budget Chancellor of the Exchequer, Rachel Reeves outlines various tax hikes: 

• Reeves confirms renewal of Tobacco Duty escalator at RPI+2%, an increase of 10% on hand-rolled tobacco, a flat rate on vaping liquid from Oct 2025. and one off increase in tobacco duty.
• Increases the Soft Drinks Industry Levy ('sugar tax') to account for inflation since introduction in line with CPI for each year.
• On alcoholic duty the chancellor raises duty on non-draught products in line with RPI from Feb 2024, but cuts draught duty (affecting 2/3 of pub drinks) by 1.7%.
• On O&G sector: "Next, we committed to reform the Energy Profits Levy on oil and gas companies. I can confirm today that we will increase the rate of the levy to 38%, which will now expire in March 2030… … and we will remove the 29% investment allowance. To ensure the oil and gas industry can protect jobs and support our energy security… … we will maintain the 100% first year allowances and the decarbonisation allowance too.
• On second homes: "We are increasing the stamp-duty land tax surcharge for second-homes… …known as the “Higher Rate for Additional Dwellings”… … by 2 percentage points, to 5%, which will come into effect from tomorrow. "
• On fund management: "we will increase the Capital Gains Tax rates on carried interest to 32% from April 2025… … and – from April 2026 – we will deliver further reforms to ensure that the specific rules for carried interest are simpler, fairer and better targeted."
• VAT on private schools: "we will introduce VAT on private school fees from January 2025… … and we will shortly introduce legislation to remove their business rates relief from April 2025."
• On income tax and NIC thresholds: "there will be no extension of the freeze in income tax and National Insurance thresholds beyond the decisions of the previous government. From 2028-29, personal tax thresholds will be uprated in line with inflation once again. "

• MNI: GERMANY OCT CPI +2% Y/Y

The German national flash October HICP print came in above expectations at +2.4% Y/Y (vs 2.1% cons; 1.8% prior) and 0.4% M/M (vs 0.2% cons; -0.1% prior) - but inline with the MNI tracking estimates based off the regional releases.

• National flash CPI was 2.0% Y/Y (vs 1.8% cons; 2.0-2.1% MNI tracking est.; 1.6% prior) and 0.4% M/M (vs 0.2% cons; 0.4-0.5% MNI tracking est; 0.0% prior). Core CPI came in at 2.9% Y/Y (2.9% MNI tracking, 2.7% prior).
• Of the major sub-categories, services CPI is the most closely watched and it accelerated as we've expected after the state-level data this morning - the yearly rate came in at 4.0% Y/Y (3.8% prior), its highest since September 2023.
• Goods inflation also accelerated, to 0.4% Y/Y (-0.3% prior), with the increase broad-based: Food at 2.3% Y/Y (2.1% prior, no MNI tracking), energy -5.5% Y/Y (around -5.6% MNI tracking, -7.6% prior); there is no detailed data on core goods in the national flash release but the state-level data also suggested some uptick here.
• The conclusions from the state-level data remain unchanged: The print does not represent a major shift but services stickiness remains concerning - warranting caution in the context of the
  
  recent debate of a potentially accelerated ECB cutting cycle.