UK directors dump shares as Reeves weighs capital gains tax rise

Today’s agenda: Tesla unveils “Cybercab”; Iran’s nuclear doctrine; Hurricane Milton rescue efforts; how Gaza truce talks failed; and the left loses ethnic minorities

Good morning. We turn to the UK, where executives have stepped up sales of their shares in listed companies ahead of the country’s Budget this month. Regulatory filings show directors of listed companies have sold shares at an average rate of £31mn a week since Britain’s July 4 election, more than double the £14mn pace of the previous six months.

Why is this happening? Rachel Reeves is considering an increase in capital gains tax in the Budget to plug a gap in the public finances, according to government insiders. CGT is charged when assets such as second homes and shares are sold at an increased value. Several executives are worried that the UK chancellor’s potential move could lead to further investor outflows and deter future investment.

Why it matters: The government says it needs to fill a £22bn “black hole” left by the previous Conservative administration, and is hamstrung by its pledges to not raise income tax, national insurance or value added tax on working people. Independent research suggests an overhaul of CGT could raise up to £14bn a year.

But reforming CGT is highly complex as it is levied at a range of rates across different asset classes. Raising the tax may not necessarily lead to more revenue, given the relatively small number of people who pay it — around 350,000, or just 0.65 per cent of the adult population. Wealthy individuals are also able to mitigate the impact, such as by moving abroad, which could have other negative effects on the UK economy at a time when the Labour government is trying to attract foreign investment.

We have more analysis on the autumn Budget here, and more on Labour below.

• Angela Rayner: In an op-ed for the Financial Times, the deputy prime minister argues that her party’s workers’ rights bill is good for business.

• New minister: Darktrace co-founder Poppy Gustafsson has been appointed as the UK’s investment minister ahead of the government’s international business summit on Monday.

And here’s what else I’m keeping tabs on today:

• Economic data: The UK releases its gross domestic product estimate for August, Germany publishes its final consumer inflation figures, and the US has its producer price index and a consumer sentiment survey from the University of Michigan.

• Greece: The government is due to present a revised national climate plan, with more ambitious renewable power targets and lower carbon emissions.

• Nobel Peace Prize: The UN agency for Palestinian refugees and the International Court of Justice are among the potential winners of the award to be announced in Norway.

• Results: BNY, BlackRock, JPMorgan Chase and Wells Fargo report.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Elon Musk has shown off Tesla’s “Cybercab” in an eagerly anticipated event for investors, but was vague on crucial details as he predicted that its self-driving taxi would be available for less than $30,000. The billionaire said production of the robotaxis was likely to start before 2027. Here are more details from the announcement.

• Stellantis: The European carmaker behind Peugeot, Fiat and Jeep has announced a radical global management shake-up as it seeks to address falling profits.

2. Ukraine has accused Russia of routing its missiles to fly over nuclear power plants “every day”, a military tactic that heightens the risk of atomic accidents. Kyiv’s energy minister told the FT that Russian attacks had forced one plant into shutdown on August 26 after a substation was hit. Ukraine’s three nuclear facilities generate almost 60 per cent of the country’s electricity.

3. Tehran could change its nuclear doctrine if Israel targets the Islamic republic’s atomic facilities, a senior adviser to Iran’s supreme leader has said. Some Israeli hawks have been pushing for the sites to be targeted as retaliation for Iran’s missile attack last week. Western officials have warned against the move, which the adviser said “would cross regional and global red lines”.

• Lebanon invasion: Israeli forces fired a tank shell at the UN peacekeepers’ headquarters in southern Lebanon yesterday, the world body said, injuring two international troops.

4. Rescue operations are under way in Florida as officials seek to assess the damage inflicted by Hurricane Milton as it crossed the state overnight, triggering widespread flooding and leaving millions without power. At least 10 people have been killed by the storm. Here’s more on what we know about the storm’s impact.

5. The Canada Pension Plan Investment Board has been criticised by a London judge after it sacked a “high earner” employee who put thousands of pounds in personal expenditure on a corporate credit card because his wallet was stolen. The UK-based CPPIB managing director has been awarded £25,000 in damages. Read the full story.

The Big Read

In the wake of Hamas’s October 7 attack last year and Israel’s subsequent offensive in Gaza, Abbas Kamel, the head of Egyptian intelligence, CIA director Bill Burns and Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani had relentlessly nudged, cajoled and pressured both parties to accept a hostage and ceasefire deal. Finally, late in July, the three secretive men charged with this near-impossible mission believed they were on the cusp of a breakthrough. They were mistaken. Here’s how the Gaza truce talks unravelled.

We’re also reading . . . 

• Gucci’s new CEO: Stefano Cantino, a former Louis Vuitton and Prada executive, must execute one of the biggest and most complex turnarounds in a sector hitting harder times.

• Kamala Harris: The vice-president remains an elusive figure to many even as she vies for the presidency. What can her formative years shaped by San Francisco’s brutal politics tell us?

• Pfizer vs Starboard: A seemingly misfired email has embroiled the drugmaker’s chief executive Albert Bourla in a high-stakes activist campaign.

Chart of the day

On both sides of the Atlantic, one of the oldest patterns in electoral demographics has started to break down, writes John Burn-Murdoch. More importantly, the shift highlights something that has always been true but often ignored: ethnic minority voters are not a homogenous bloc.

Take a break from the news

Can a cruise ship be sustainable? Meet the captain hoping to pioneer a more environmentally friendly way to see the polar regions — using rigid sails and solar power.

Additional contributions from Gordon Smith and Benjamin Wilhelm