• Japan's growth forecast for the current fiscal year has been revised down to 0.7% due to delays in automobile exports recovery.
• In the UK, businesses are hit hard by a £40bn tax increase, raising concerns about growth and employment.
• UK's borrowing costs have spiked to their highest level in nearly a year due to plans to borrow more for infrastructure and housing investment.
• These global economic shifts, from Japan's lowered growth forecast to the UK's tax hikes, have significant implications for businesses and consumers.

The Japanese cabinet office recently announced a downward revision of its growth forecast for the current fiscal year. The new projection is an expansion of 0.7 per cent in inflation-adjusted real terms, a decrease from the previous projection of 0.9 per cent made in July. This revision is primarily due to delays in the recovery of automobile exports, which have been impacted by certification-related issues with certain manufacturers.

The new forecast, which was released at a meeting of the Council on Economic and Fiscal Policy, is slightly below last year's growth rate of 0.8 per cent. The cabinet also forecasted that consumer prices could remain high, with the consumer price index expected to increase 2.6 per cent this year, following a three per cent rise last year.

UK's Tax Increase and Borrowing Costs

In the United Kingdom, the budget has hit businesses hard as Rachel Reeves raises taxes by £40bn. The key tax rises include increases to capital gains tax and employers' national insurance contributions, and the inclusion of inherited pensions in inheritance tax. The budget is being described as "the latest blow for hospitality businesses" by the chief executive of UKHospitality, Kate Nicholls.

Nicholls expressed concerns about rising taxes, increasing costs, and fragile consumer confidence, which she believes could bring growth to a halt. She also warned that the tsunami of employment costs coming in April will ultimately do more to hamper growth than incentivise it. Increases to employer NICs and wages will make it harder for businesses to support employment and invest in their businesses.

Global Economic Changes and Challenges

In the United States, Britain's borrowing costs jumped to their highest level in nearly a year after Rachel Reeves' debt-fuelled spending spree spooked bond markets. The Chancellor sent jitters through financial markets after she unveiled plans to borrow nearly £20bn more than expected this financial year to fund investment in infrastructure and housing.

The yield on 10-year gilts - the return the government promises to pay buyers of its debt - spiked by nine basis points to 4.41pc in the wake of Ms Reeves's speech, an 11-month high. Inflation and mortgage rates are elevated by Chancellor's spending plans, says OBR. The Office for Budget Responsibility (OBR) said the sharp increase in spending will contribute to higher inflation in the short-term, although it will also help drive stronger economic growth.