EM CEEMEA CREDIT: NavoiYuran: Fitch upgrade comes as no surprise

Chancellor of the Exchequer Rachel Reeves delivering the Spending Review. On Defence spending: "...defence spending will now rise to 2.6% of GDP by April 2027…including the contribution of our intelligence agencies...With a £11bn increase in defence spending…and a £600m uplift for our security and intelligence agencies."

• On border control spending: "I can announce that funding of up to £280m more per year by the end of the spending review for our new Border Security Command."
• On asylum spending: "…we will be ending the costly use of hotels to house asylum seekers, in this Parliament. Funding that I have provided today…including from the Transformation Fund…[will save] the taxpayer £1bn per year."
• It remains to be seen whether the commitments on defence spending prove sufficient to avoid blowback from NATO and in particular, the US, which is demanding 5% of GDP being spent on defence or defence-related areas (albeit without a set target date).
• Politically, the commitments on border security and asylum are potentially notable. Immigration is, according to opinion polling, is the biggest single issue for voters and has been a key driver of support for right-wing Reform UK. Initial reports around Spending Review have seen Home Office (in control of border sec. and immigration) as facing a 'suboptimal' settlement. 

Chancellor of the Exchequer Rachel Reeves outlining the gov'ts Spending Review, outlining day-to-day spending for the next three years and capital/investment spending for the next four years. The split of the entire 'envelope' (new gov't spending) announced in the Autumn 2024 budget between various gov't departments will be announced. 

• Reeves: "My fiscal rules are non-negotiable…and they are the foundation of stability and of investment. My first rule is for stability: That day-to-day government spending should be paid for through tax receipts. [...] This first rule allows me… …as I set out in the Budget… …to allocate £190bn more to the day-to-day running of our public services over the course of the spending review… …compared to the previous government’s plans."
• Reeves: "My second fiscal rule enables me to invest in Britain’s economic renewal…while getting public debt on a downward path. This rule has allowed me to increase public investment by over £100bn in the Autumn…and a further £13bn in the Spring..."
• The chancellor uses the first part of her speech to lambast the main opposition centre-right Conservatives over the 2022 Truss/Kwarteng mini-budget. Notably, she also targets Reform UK, a party with five members of parliament, on its "GBP80B of unfunded commitments. Hightlights the major challenge the gov't perceives from the right-wing populist party (which currently holds a sizeable lead in national opinion polling). 

You are invited to listen to a Livestreamed MNI Connect Video Conference with Federal Reserve Bank of Atlanta Raphael Bostic.

Details below:

• Speaker: Raphael Bostic, Federal Reserve Bank of Atlanta President
• Topic of discussion: 'The US Economic Outlook'
• DATE: Mon, 30 Jun 2025
• TIME: 15:00 - 16:00 BST
• This event is on the record and will run as a Zoom Webinar

To register please go to: MNI Webcast Registration