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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

UK chancellor Rachel Reeves on Monday gave her clearest signal yet that business taxes will rise in this month’s Budget, even as the government urged the world’s financial elite to unleash a “shock and awe” wave of investment in Britain.

Reeves repeatedly refused to rule out an increase in employers’ national insurance contributions, a move that would hit the bottom line of companies but raise billions of pounds to help fill what she says is a £22bn hole in the public finances.

Speaking to journalists at an international investment summit in London, Reeves said business leaders understood that she had to take “difficult decisions” to balance the books to put the country on a stable footing and make the UK an attractive place to invest.

Earlier at the summit Prime Minister Sir Keir Starmer called on global investors to unleash the “shock and awe of investment” in Britain, vowing to “rip up” bureaucracy and urging regulators to speed up decisions and back growth.

Starmer said the UK was once again open for business after the political “circus” that followed Brexit and declared: “You have to grow your business, I have to grow my country.”

Reeves said a £60bn wave of private sector investment in projects across Britain had been announced to coincide with Monday’s summit, at London’s Guildhall.

But the summit has been partially overshadowed by the new government’s first Budget on October 30.

The chancellor added she was “determined to get the balance right in the Budget” and that stable public finances were a precondition of growth. Jonathan Reynolds, business secretary, claimed the subject of higher taxes had not been raised with him at the summit.

Labour’s manifesto ruled out higher taxes on working people, including income tax, value added tax and national insurance. Reeves confirmed on Monday that this pledge only applied to employee NI contributions, not those made by employers.

“Our manifesto was very clear — it says “working people”, she said. “There’s a £22bn black hole above anything we knew about before the election,” she said, warning that this fiscal deficit would recur every year and needed filling.

Reeves could rake in billions of pounds by making employer pension contributions subject to NI, depending upon the level at which the levy was set. The Resolution Foundation think-tank has suggested the tax change could raise up to £9bn a year.

“Unless you put Britain on a stable economic financial path, we’re not going to be able to get that investment in,” Reeves said. “That means there will be some difficult decisions, including on taxation. Businesses get that.” The chancellor is also eyeing an increase in capital gains tax.

However, Starmer told Bloomberg TV that speculation about an increase in the rate of capital gains tax to as high as 39 per cent — the highest rate is currently 28 per cent — was “getting to an area which is wide of the mark”.

The prime minister told the summit he would tell regulators the “key test of regulation is of course growth” and that ministers would back cutting-edge sectors through a new industrial strategy.

He depicted the summit as a key moment in reviving the country’s global standing. “We are determined to improve it and repair Britain’s brand as an open, outward looking, confident, trading nation,” he said.

Starmer said this had been called into question after the “circus” that followed the 2016 Brexit vote, saying that the previous Conservative government’s tone had suggested it was anti-business and hostile to the EU.

He warned that, without an improving economy, there would be no return to the “great moderation” that preceded the 2008 global financial crash. “It’s not just that stability leads to growth — it’s also that growth leads to stability,” he said.

A lack of stability would lead to the “misting up of the shop window” of Britain as an inward investment location, Starmer added.

Business leaders have expressed concern at Starmer’s early move to create a raft of new workers’ rights, but he insisted: “Workers with more security in work, higher wages, is a better growth model for this country.”

Mortgage Rates Predicted to Carry on Falling in 2025.

Mortgage rates are anticipated to continue their decline, with forecasts suggesting another base rate cut in November. Here’s our most recent outlook on mortgage and base rates.

UK mortgage rate forecast for November 2024

Mortgage rates are on a downward trend and experts suggest they could decrease even more. With another base rate cut anticipated in November and ongoing competition among lenders, some fixed-rate mortgages have reached their lowest levels in two years. What’s even more promising for borrowers is the growing belief that rates could keep falling for the remainder of the year. The Bank of England’s decision to lower the base rate in August was seen as a bold move, and it has already positively impacted mortgage rates, particularly for those lenders operating in the swap market. This market is crucial as it determines the costs for lenders offering fixed-rate mortgages. This competitive environment is likely to result in further rate cuts, especially in the five-year mortgage sector, where we are already noticing several rates below 4%.

Fixed-rate mortgages head down

Fixed mortgage rates experienced a decline throughout August, mirroring the trend observed in July and aligning with predictions made last month. According to Rightmove, the average five-year fixed mortgage rate was 4.74% as of August 28, a significant drop from the 5.02% it began the year with.

Similarly, two-year fixed-rate mortgages have also seen a decrease, with the average rate now at 5.10%, down from 5.43% at the start of 2024. At first glance, this seems like great news for anyone considering a fixed-rate mortgage. In fact, typical rates across all loan-to-value ratios have decreased over the past couple of months. However, a closer look at the data indicates that not all borrowers are benefiting equally from these recent reductions.

Those with larger deposits or more equity in their homes have emerged as the clear winners, while first-time buyers are often left at a disadvantage. For instance, if you have a 40% deposit or equity, allowing you to secure a 60% loan-to-value mortgage, the average rate on two-year fixed-rate mortgages has dropped from 4.82% at the beginning of 2024 to 4.38%, a reduction of 0.44 percentage points. In contrast, for those with a smaller 5% deposit needing a 95% LTV mortgage, the current average two-year fixed-rate stands at 5.83%, which is slightly higher than the 5.81% average recorded at the year’s start.

Tracker mortgage rates and SVRs to fall

Many individuals paying their lender’s standard variable rate (SVR) or those with a tracker mortgage can relate to the challenges faced by first-time buyers. However, on August 1, the long wait of over four years for a favourable shift in the base rate finally came to an end. Five members of the Bank of England’s policymaking committee voted to reduce the rate from 5.25% to 5.00%, outvoting the four who wanted to keep it the same.

This marked the first decrease in the base rate since March 2020, leading to a drop in many mortgage rates. According to the investment platform Hargreaves Lansdown, approximately half a million mortgage holders can now anticipate saving over £330 annually on their payments. For those with a tracker mortgage, which adjusts in accordance with the base rate, lower repayments are almost certainly on the horizon.

However, the situation is less clear for borrowers on an SVR, where lenders have more flexibility. Since the announcement of the base rate change, numerous lenders have indicated that their SVR will decrease. This includes institutions like Bank of Scotland, Barclays, Clydesdale Bank, Co-op Bank, Coventry Building Society, Halifax, Lloyds, Nationwide, Principality Building Society, Santander, Scottish Widows, TSB, Virgin Money, West Brom Building Society, Yorkshire Bank, and Yorkshire Building Society. However, not all lenders are reducing their SVR by the full 0.25 percentage point that corresponds with the base rate drop, and many have yet to announce their plans.

November  base rate cut

Attention has shifted to the potential for a decrease in the base rate. There are three upcoming announcements regarding the base rate before the year concludes: on September 19, November 7, and December 19. Currently, a change in September is not anticipated.

The prevailing thought is that the recent economic indicators do not yet support another reduction. Wage growth data has proven to be more resilient than expected, and shortly after, it was confirmed that inflation ticked up in July, moving from the 2% target to 2.2%. Importantly, this increase was anticipated, and the actual figure was lower than expected, as was the closely monitored services inflation.

The general agreement is that this will give the Bank of England confidence that inflation remains manageable. Consequently, it is believed that there may be room for one or possibly two more base rate cuts before the year ends, but not until November. Experts suggest that this scenario could allow mortgage rates to continue decreasing in the upcoming months. However, considering the recent rapid decline in rates, the pace of these reductions might begin to slow down.

Related: Mortgage Calculator

Israeli strikes have killed more than 150 medical and rescue workers in Lebanon and hit dozens of health facilities, a pattern one Lebanese minister alleged to be “systematic targeting” of healthcare.

Direct Israeli strikes, mainly over the past three weeks, have incinerated ambulances, destroyed civil defence centres and battered wings of hospitals as Israel’s military has intensified its campaign against Hizbollah.

The effect has been debilitating for the country’s medics. Several paramedics told the Financial Times that strikes hit just in front of their ambulances as they raced towards the scene of attacks, forcing them to turn back and abandon the wounded.

Others described direct strikes on their teams as they were resting in break rooms or had been dispatched to the scene of earlier attacks. Hospitals have also been forced to shut because of strikes. Of the five hospitals along the southern border, only one remains open.

Lebanon’s public health minister Firas Abiad alleged the strikes were “attacks on civilians”. “There’s no other explanation for what they are doing,” he told the FT. “These are war crimes.”

The minister said at least 150 medical personnel, mostly first responders, have been killed and 231 wounded, largely in the past three weeks. More than 135 vehicles have been destroyed by Israeli air strikes, while 13 hospitals and dozens more medical facilities have been bombed.

Many of those hit have been from the Islamic Health Committee, a major healthcare provider in Lebanon that is affiliated with the militant group Hizbollah. But workers and facilities from other organisations and government bodies have also been hit.

Israel accuses Iran-backed Hizbollah and its ally, the Amal movement, of using “civilian infrastructure” and emergency vehicles to transport “operatives and ammunition”, claims that both groups deny.

“Any vehicle shown to contain armed operatives with the intent to carry out terrorism, regardless of the type of vehicle, is a military target,” the Israel Defense Forces said on Saturday.

The attacks on health workers came as Israel pummelled Lebanon with thousands of air strikes in an escalating campaign against Hizbollah that has killed much of the militant group’s leadership since last month.

First responders and ambulances were, in many instances, prevented from reaching wounded survivors of Israeli air strikes, according to health workers, local officials, the IHC and Amal. Health minister Abiad said the strikes were “effectively denying life-saving care” to the injured.

Walid Hashash, director of the operations unit of Lebanon’s civil defence force, said: “Sometimes we’ll be driving in the ambulance and they strike in front of the ambulance, which we take to mean: ‘If you keep driving, you’ll die. Go back.’”

One attack hit a second wave of response vehicles attempting to retrieve the bodies of eight IHC rescue workers, who were killed on October 2 while attempting to reach the site of an air strike on the southern village of Taybeh.

When the Lebanese Red Cross, escorted by the Lebanese army, attempted to recover the dead the next day, Israel struck near their convoy, killing an army soldier and wounding four paramedics, according to the Lebanese Red Cross and Lebanese army. The bodies of the eight rescuers lay in the street for days, said Mahmoud Karaki, spokesperson for the IHC civil defence.

About half the workers and facilities hit this year were linked to the IHC, which operates separately from Hizbollah’s armed wing but co-ordinates with it closely for rescue operations. It serves Hizbollah’s base, providing healthcare to hundreds of thousands of people across the country.

The IHC said it had lost more than 80 rescue workers in the past year, with 70 in the past three weeks. Amal’s Al Risala Scout Association said it had lost 21. “Every morning, we wake up and ask who among us is still alive,” Karaki said.

Government hospitals and state rescue workers have also been struck, and they are affected by the attacks on the IHC, which is woven into Lebanon’s emergency response system.

“They’re targeting civil defence, the Lebanese Red Cross, the Lebanese paramedics’ association — any paramedic group that is moving on the ground has been targeted,” Abiad said. “Even if you want to accept their premise about the IHC, what is the explanation for targeting civil defence or the Lebanese Red Cross?”

Ramzi Kaiss, Lebanon researcher at Human Rights Watch, said: “Membership or mere affiliation with Hizbollah is not a sufficient basis for determining an individual to be a lawful military target. Medical personnel, including those assigned to Hizbollah-affiliated civil defence organisations, are protected under the laws of war. Intentionally directing an attack against medical units and ambulances would be a war crime.”

Mohammad Sleiman, director of the IHC Martyr Salah Ghandour hospital in southern Lebanon, said he was given four hours to clear out paramedics stationed in his hospital before it would be struck by Israel on October 4.

Sleiman raced to move the paramedics out of the building. But 90 minutes before the 10pm deadline, three Israeli shells landed on the hospital in quick succession, hitting the doctors’ break room, shattering laboratory equipment and injuring 10 staff, Sleiman and a local official told the FT.

“We would have expected them to strike around the hospital to get us to leave,” Sleiman said. “But to hit it directly? We did not imagine even they would go that far.”

The IDF said notices were sent to residents before the strike and significant figures in the village were warned that Israeli forces believed Hizbollah were utilising hospitals in defiance of the laws of armed conflict. The IDF only acknowledged striking a mosque adjacent to the hospital that they said was being used by Hizbollah fighters “as a command centre”.

Medical staff have not returned to Salah Ghandour hospital since the strikes.

On the same day in nearby Marjaayoun, a Christian-majority town on the border, an Israeli missile hit an ambulance parked in front of the government hospital, killing seven IHC paramedics and shutting down the hospital, according to two hospital officials, Abiad and Karaki. The IDF said it was unaware of this strike.

Chouchan Mazraani, the head of the hospital’s emergency department, was drinking coffee outside the emergency room when the ambulance was hit.

Mazraani began to run towards it and was so close she could hear the wounded men, who were old colleagues. But another doctor stopped her. “Come back, they’re going to strike again,” he shouted.

Mazraani froze. “I was standing in the middle of the road and I was powerless,” she said. “Imagine, someone is crying for you and you don’t dare to get closer because you don’t want to be struck.”

Israeli strikes have also hit state-run facilities directly. On October 9, five Lebanese state rescue workers were killed when Israel struck their base in the annexe of a church in the southern village of Dardghaya. The IDF said that it had targeted “several terrorists from the Amal terrorist organisation” in the village. Three men affiliated with the Shia organisation were killed nearby in the same attack.

Days before, the rescue workers, who were members of Amal’s political movement but worked for the state, had received a new ambulance, refurbished and paid for by grassroots donors.

In a separate incident a few days before, an Israeli strike hit a civil defence station in the southern village of Baraachit, killing 14 firefighters, the town’s mayor said. The building belonged to the union of municipalities for the region of Bint Jbeil. The IDF said the “precise, intelligence-based strike” targeted Hizbollah operatives, who were allegedly using the fire station as a “military post”.

As soon as the shells began landing on Salah Ghandour hospital, staff called the Lebanese army and Red Cross, asking them to help co-ordinate with the Israeli military through the UN and evacuate the injured staff.

But Israel’s military never responded to calls from Unifil, the UN peacekeeping force in Lebanon, according to three people familiar with the situation.

Fearing further Israeli strikes, the staff of Salah Ghandour instead evacuated their wounded colleagues themselves, closing the hospital and loading the patients into their own cars.

Additional reporting by James Shotter. Cartography by Hirofumi Yamamoto and Steven Bernard

Verso Group has completed an ambitious integration programme to unify its operations across advice and investment management.

This marks a significant milestone for the group, creating a scalable platform primed for future growth.

One of the project’s major achievements is the launch of a new, enhanced investment offering to provide Verso’s clients and advisers with a broader array of services designed to meet investment requirements and objectives.

This supports Verso’s goal of achieving £5bn in assets under management within the next two years.

Verso recently went through a period of intense M&A activity, during which it made seven acquisitions in two years to establish its presence in the UK.

The business then took the decision to pause further acquisitions and focus on an integration programme encompassing brand, operations, technology and its investment proposition.

The initiative spanned 10 months and brought together the group’s acquired firms under a single brand.

Verso now has an integration playbook, which it said will allow it to consolidate future acquisitions “seamlessly”.

Group chief executive, Alan Mathewson, said: “Our goal has always been to operate as a unified business across advice and investment management.

“As a consolidator of IFA firms, integration delivers major benefits to our business, for the Verso Group, our clients and colleagues alike. We are now perfectly positioned to accelerate our ambitious growth plans.”