Analysis: Europe — 16 October 2026
Chancellor Healey rejects capital-gains tax rise as IMF warns Britain to stay the course
UnHerd reports that UK Chancellor John Healey has rejected three tax-raising ideas in days: equalising capital gains tax with income tax, lowering a planned mansion-tax threshold from £2 million to £1.5 million, and extra business rates on large retail warehouses. A Treasury source called CGT equalisation “batshit crazy”. The refusals stand out because Prime Minister Andy Burnham won office promising to end “austerity, privatisation, and deregulation” and had argued that Britain undertaxes wealth.
Burnham appointed Healey after the Makerfield by-election. Labour is split between the Labour Growth Group, which wants more homes, cheaper energy and lower taxes on work, and the revived Tribune Group around First Secretary Louise Haigh, which wants wealth taxes and more state direction. The tax burden is already at a post-war high. The IMF’s October 2026 World Economic Outlook raised 2026 UK growth to 1.3% from 1.0% but cut 2027 to 1.2%, with inflation seen averaging 2.8% next year. Chief economist Silvana Tenreyro said the UK should “stay the course”. Bank of England governor Andrew Bailey warned that fiscal plans must keep gilt-market confidence or risk a repeat of the 2022 mini-Budget crisis. The IFS sees extra spending pressure of about £35 billion a year by 2030–31.
Sources: UnHerd.
France’s September CPI confirmed at 3.1% as lycée protests close hundreds of schools
InvestingLive reported on 15 October that France’s final September CPI was 3.1% year-on-year, against a 3.0% flash and 2.4% previously. Harmonised inflation was 3.4%. Core CPI rose to 1.5% from 1.1%, with services at 2.4% from 1.9%. Energy prices jumped 21.3% after 16.7% in August, tied to Middle East fallout. Headline inflation is still energy-led, but core and services are no longer inert, which complicates the ECB’s next move. Board member Alvaro Santos Pereira has said euro-area energy inflation is not spreading broadly, while flagging winter gas risk.
The print lands on a political crisis. UnHerd’s Yanis Varoufakis describes lycée protests that began in mid-September in Créteil, closed hundreds of schools, filled Place de la Bastille and spread to Belgium, Italy and Greece. Stated demands are teachers, overcrowding and crumbling buildings. He cites almost 7,000 arrests, 86% of them minors, and serious injuries from police munitions. France’s debt-to-GDP was 119% in the second quarter of 2026; Goldman Sachs has treated the French–German spread as a rate shock plus fiscal and election risk. Marine Le Pen leads polls six months before the presidential vote.
Sources: InvestingLive, UnHerd.