Core Insights - The UK Office for Budget Responsibility (OBR) projects a budget surplus of £21.7 billion for the fiscal year 2029-2030, an increase from the previous forecast of £9.9 billion in March [1] - The proposed tax policy changes are expected to generate an additional £26.1 billion in tax revenue by the fiscal year 2029-2030 [1] - The medium-term productivity growth forecast has been revised down from 1.3% to 1.0% [1] Economic Projections - GDP growth rate for 2025 is projected at 1.5%, an increase from the earlier estimate of 1.0% made in March [1] - There remains significant uncertainty regarding the future direction of US and global trade policies, with many trading partners facing the threat of tariff increases [1] Fiscal Strategy - Approximately three-quarters of the planned reduction in borrowing over the next five years will be achieved through tax increases [1] - The UK government aims to achieve a balanced current budget by the fiscal year 2029-2030 [1]

Group 1 - UK retail sales in August grew by 0.5%, exceeding analyst expectations of 0.4%, indicating resilience in consumer spending despite government tax increases [1] - Strong sales in clothing and baked goods offset declines in computer and telecommunications equipment sales, suggesting a mixed performance across sectors [1] - The Labour government's £26 billion (approximately $35 billion) tax increase and higher minimum wage standards raised market concerns, but strong retail sales provide some relief to the Chancellor [1] Group 2 - Consumer spending accounts for about 60% of total expenditure, making it crucial for the Labour government to avoid a cautious consumer sentiment [1] - The UK government is focused on revitalizing economic growth to prevent significant tax increases in the upcoming budget [1] - The Consumer Price Index (CPI) in August rose by 3.8% year-on-year, consistent with previous months and aligning with predictions from the Bank of England and private sector economists [1] Group 3 - The Bank of England is maintaining interest rates at 4% amid concerns over rising inflation, with a cautious outlook on future rate cuts [1] - Inflation is expected to reach 4% this month, with particular concern over spiraling food prices due to their importance to consumers [2]

Core Viewpoint - The South Korean stock market experienced its largest decline since early April, primarily due to a government proposal to increase taxes on corporations and stock investors, which is expected to lead to significant selling pressure in the market [1] Group 1: Tax Proposal Impact - The South Korean government proposed to lower the capital gains tax threshold for stockholders from 5 billion KRW to 1 billion KRW, which is anticipated to increase the number of taxable investors significantly [1] - The stock transaction tax is set to rise from 0.15% to 0.2%, further impacting investor sentiment [1] - The highest corporate tax rate will increase from 24% to 25%, reversing the previous government's tax reduction policies, with all corporate tax brackets seeing a 1 percentage point increase [1] Group 2: Market Reaction - The benchmark stock index in South Korea fell by over 3%, with SK Hynix and Hanwha Aerospace experiencing the largest declines [1] - Timefolio indicated that the reduction in the capital gains tax threshold could lead to a substantial increase in the number of taxable investors, potentially triggering a sell-off in the stock market [1]

Core Points - President Trump is proposing to increase tax rates for wealthy Americans earning over $2.5 million annually, or couples earning $5 million, to a new rate of 39.6% [1] - This proposal aims to offset other tax cuts in his economic plan and would revert the highest tax rate to levels prior to Trump's 2017 tax cuts [1] - The current highest personal tax rate stands at 37% [1] - Trump communicated this request during a phone call with House Speaker Johnson and reiterated his desire to eliminate the carried interest tax break enjoyed by hedge fund and private equity managers [1]