UK’s higher borrowing costs compared with major countries ‘may be coming to an end’

A recent survey by Ofcom revealed that UK residents are spending an average of four hours and 30 minutes online daily in 2025, which is half an hour longer than during the pandemic. This increase highlights a shift in digital consumption patterns as people continue to adapt to a more online-centric lifestyle.

UK gilt yields have seen a slight decrease compared to other major economies, indicating a potential shift in the bond markets as Chancellor Rachel Reeves navigates fiscal challenges. Despite this drop, the UK still faces a significant premium on borrowing costs, with 10-year government gilt yields rising compared to US Treasury bonds and eurozone counterparts since the last general election.

The Bank of England has projected that the recent budget proposed by Chancellor Rachel Reeves will reduce the UK's headline inflation rate by up to half a percentage point next year, with an expected decrease of 0.4 to 0.5 percentage points from mid-2026. This analysis was shared by Clare Lombardelli, a deputy governor at the Bank, following the chancellor's high-stakes tax and spending statement last month.

Ofgem has approved early investment in three major electricity 'superhighways' in the UK, aimed at alleviating grid bottlenecks that prevent efficient electricity distribution during high generation periods, particularly from wind farms. This initiative is expected to reduce costs for consumers by minimizing the need to turn off wind farms when demand is low.

Thirteen Labour MPs voted in favor of initiating discussions on the UK potentially rejoining the EU customs union, as part of a bill proposed by the Liberal Democrats. The vote resulted in a tie, with 100 MPs supporting and 100 opposing the measure, highlighting a divided stance on this issue within Parliament.

A report by Covid counter-fraud commissioner Tom Hayhoe revealed that fraud and errors related to government support schemes during the pandemic have cost UK taxpayers £10.9 billion, with most losses from bounceback loans, furlough pay, and the eat out to help out initiative remaining unrecovered.

UK grocery inflation has remained steady at 4.7%, according to Worldpanel, continuing to exert financial pressure on households. This stability follows a period of fluctuating food prices, which have recently seen increases despite a broader decline in general inflation rates.

UK consumer spending showed disappointing results in November, as surveys indicated a decline in consumer confidence and spending patterns. This downturn reflects ongoing economic challenges and uncertainty affecting various sectors within the UK market.