Starmer says budget did not break manifesto tax pledge – as it happened

PM says: ‘We kept to our manifesto in terms of what we’ve promised. But I accept the challenge that we’ve asked everybody to contribute’

The Conservative party is attacking the budget on the grounds that Rachel Reeves is putting up taxes supposedly to fund more spending on benefit claimants. Even though the rationale for this claim is questionable, the Tories were making it before the budget was announced, and Kemi Badenoch firmed it up last night, claiming it was a “Benefits Street budget”.

On LBC this morning, asked if the budget meant “alarm clock Britain paying for Benefits Street”, Reeves said she did not accept that. She said 60% of the families that would benefit from the removal of the two-child benefit cap (the most expensive welfare announcement in the budget) were in work.

I don’t think children should be punished by this pernicious policy any longer. And the cost to society of this is huge, the cost for councils of temporary accommodation, when people can no longer afford the rent, putting families in B&Bs, kids having to move to school all the time because parents have moved from B&B to another lot of temporary accommodation, and there’s costs for years to come, because all the evidence shows that kids that are growing up poor are less likely to get into work and more reliant on the welfare state in the future for them.

So this is a good investment in those kids, to give them the chances that I want for my kids, and everyone wants for their kids. It also saves money for taxpayers on that accommodation, on those additional health costs, and ensuring that those kids grow up to be productive adults.

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Rachel Reeves targets UK’s wealthiest in £26bn tax-raising budget

Chancellor axes two-child benefit cap and cuts energy bills paid for by mansion tax and freezing tax thresholds

Rachel Reeves targeted Britain’s wealthiest households with a £26bn tax-raising budget to fund scrapping the two-child benefit policy and cutting energy bills.

On a chaotic day that involved key details of her budget accidentally being released early by the Office for Budget Responsibility (OBR), the chancellor defended the measures, saying she was “asking everyone to make a contribution to repair the public finances”, but that she wanted the wealthiest to pay the most.

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How Rachel Reeves’s budget was leaked 40 minutes early

By the time the chancellor reached the dispatch box, the OBR had accidentally published its verdict in full online

Shortly before midday on Wednesday, a series of headlines about Rachel Reeves’s budget began appearing on the Reuters newswire, sending instant ripples though financial markets.

The details were jaw-dropping: they appeared to spell out the key policies of the chancellor’s budget more than 40 minutes before she was due to deliver them to a crowded Commons chamber.

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How Rachel Reeves’s budget was leaked 40 minutes early

By the time the chancellor reached the dispatch box, the OBR had accidentally published its verdict in full online

Shortly before midday on Wednesday, a series of headlines about Rachel Reeves’s budget began appearing on the Reuters newswire, sending instant ripples though financial markets.

The details were jaw-dropping: they appeared to spell out the key policies of the chancellor’s budget more than 40 minutes before she was due to deliver them to a crowded Commons chamber.

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Mayors in England to get power to impose tourism tax on overnight visitors at ‘modest’ rate – UK politics live

Government announces overnight levy ahead of tomorrow’s budget

John McFall is standing down early as Lord Speaker in the House of Lords so that he can care for his wife, Joan, who has was Parkinson’s. According to Sam Blewett and Bethany Dawson in their London Playbook briefing for Politico, the main candidates to replace him are Michael Forsyth, a rightwing Scottish secretary in the final two years of the John Major government, and Deborah Bull, a crossbencher and former Royal Opera House creative director. They reports:

Labour isn’t expected to put forward a candidate as McFall’s previous political affiliation means it’s seen as another party’s turn to rule the roost, Noah [Keate] writes in to say. Forsyth has garnered support from some Labour grandees who like his traditional approach and aversion to modernization while Bull has being promoted by some female peers keen for a woman to take charge. One Tory peer described Forsyth as a “political animal” who may struggle to encourage a consensus across the chamber. A list of candidates’ register of interests and election addresses (up to 300 words) will be emailed to all peers on Dec. 1. Watch your inboxes!

Transport secretary Heidi Alexander rejected a rival proposal from Arora Group, saying Heathrow’s own plans were “the most credible and deliverable option”.

The Heathrow proposals involve building a 3,500-metre runway and require a new M25 tunnel and bridges to be built 130 metres west of the existing motorway.

Following a comparative assessment of the remaining proposals for Heathrow expansion, the government’s view is that the Northwest runway scheme brought forward by Heathrow Airport Limited offers the most credible and deliverable option, principally due to the relative maturity of its proposal, the comparative level of confidence in the feasibility and resilience of its surface access plans, and the stronger comfort it provides in relation to the efficient, resilient and sustainable operations of the airport over the long-term.

The HAL scheme is considered comparatively more mature in its approach to road infrastructure. While the HAL scheme requires major works to the M25, assessment indicates that the HWL scheme would also have a considerable impact on the M25.

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Europe’s economy is geared towards a disappearing world, says ECB’s Lagarde

Central bank chief warns that the bloc’s dependence on third countries for trade and security has left it vulnerable

Europe’s economy is “geared towards a world that is gradually disappearing”, according to a warning from Christine Lagarde that the EU needs reforms to spur growth.

The president of the European Central Bank (ECB) said the EU’s dependence on international trade had left it vulnerable, as major partners had turned away from the trade that made the bloc’s exporters wealthy.

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UK government borrows more than expected in setback before budget

October figures represent final snapshot of public finances before Rachel Reeves’s tax and spending statement

Rachel Reeves was urged to use next week’s budget to create significantly more headroom against her fiscal rules, after official figures showed the UK government borrowed almost £10bn more than forecast in the year to October.

In the final snapshot of the public finances before the chancellor’s crunch budget, the Office for National Statistics (ONS) said borrowing – the difference between public spending and income – was £17.4bn last month.

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Treasury won’t cut threshold for higher rate income tax, say sources – UK politics live

Fallout continues over budget income tax U-turn, with Treasury saying expected fiscal gap has dropped to £20bn

This is from Helen Miller, director of the Institute for Fiscal Studies thinktank, on the market reaction to the chancellor’s reported budget U-turn.

Investors will have 2 broad concerns about news that Chancellor won’t increase income tax rates

1. Does it signal less willingness to do politically difficult things

Britain’s long-term borrowing costs were sent soaring as reports suggested the latest U-turn would leave Rachel Reeves scrambling to fill a gaping black hole in the nation’s finances just two weeks before the 26 November budget.

Yields on 30-year UK government bonds, also known as gilts, jumped as much as 14 basis points in early trading, and the yield on 10-year gilts also shot up 12 basis points – rising the most since July.

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UK retail sales growth slows as shoppers await Black Friday and budget

Industry body says shoppers are waiting for discount day, as Barclays reports falling consumer confidence

Retailers suffered the slowest sales growth since May last month as shoppers were cautious in the run-up to expected budget tax rises and held out for Black Friday discounts.

Sales rose 1.6% in October, a step down from 2.3% the month before, according to the latest figures from the British Retail Consortium (BRC) trade body and the advisory group KPMG.

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Fed cuts interest rates for second time this year amid economic uncertainty

Central bank sets rates at range between 3.75% and 4% amid turbulence from government shutdown and Trump’s tariffs

The US Federal Reserve cut interest rates on Wednesday, the second rate cut this year amid economic turbulence from the federal government shutdown and Donald Trump’s tariffs.

The decision to cut the Fed’s benchmark interest rate by a quarter point to a range of 3.75% to 4% comes at an extraordinary moment for the central bank. The Fed has been under immense pressure from Donald Trump to cut rates despite persistent inflation.

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Do populists always crash the economy?

Argentina is counting the cost of its turn to Javier Milei. Politicians from Donald Trump to Giorgia Meloni and Nigel Farage will be closely watching what happens next

Cambio, cambio.” Under the blazing sun, dozens of money changers are hawking US dollars along Florida Street, a bustling pedestrian strip in Buenos Aires. Known as arbolitos (“little trees”), they are thriving ahead of the 26 October midterm elections in a country long used to saving in the greenback.

“The best time to buy is now,” says one arbolito, declining to give her name. “[The dollar] went down a little but it is a fake-out – it’ll rise again.”

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US prices rose at a 3% annual rate in September, slightly beating forecasts

Increase was largely driven by a 4.1% increase in gasoline prices despite Trump’s campaign pledge to ‘end inflation’

Prices continued to rise in September, increasing at an annual rate of 3%, according to the latest government inflation report.

The September 2025 consumer price index (CPI) was published approximately two weeks later than usual due to the federal government shutdown, which halted all Bureau of Labor Statistics operations.

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Signs of peak inflation open door to earlier Bank of England interest rate cuts

Policymakers under pressure for rethink after price growth in UK remained at 3.8% in September

Has UK inflation peaked? The latest official figures showing price growth in the UK stayed at 3.8% in September seem to suggest so.

The statement cannot be made with absolute certainty yet but many economists reacted to the latest consumer prices index (CPI) data with a message that the only direction for inflation over the rest of the year was down.

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UK inflation unexpectedly remains at 3.8% for third month in a row

Annual September rate confounds forecasts of a rise, as pace of food price growth slows for first time since March

UK inflation was unchanged last month at 3.8%, confounding expectations of a rise, in welcome news for the chancellor, Rachel Reeves, as she plans for her crucial budget next month.

The Office for National Statistics (ONS) said that inflation measured on the consumer prices index remained at the same level in September as in August and July.

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Real living wage to rise by almost 7% in boost for low-paid UK workers

Hourly rate to increase in April by 95p to £14.80 in London and by 85p to £13.45 for the rest of the country

Almost half a million workers are to receive a pay boost after it was announced that the real living wage paid voluntarily by 16,000 UK companies will rise to £13.45 an hour in April.

Distinct from the national living wage, which is a statutory minimum, the real living wage is calculated each year based on the cost of essentials, and is paid by more than half of the companies in the FTSE 100.

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China’s economic growth slows amid Trump tariff war and property woes

GDP rises by 4.8% year on year between July and September, down from second-quarter growth rate of 5.2%

China’s economy grew at its slowest pace in a year in the latest quarter amid a trade war with the US and long-running woes in its property market.

Fragile domestic demand has left China’s economy heavily reliant on manufacturing and trade, at a time of mounting tensions with the Donald Trump administration.

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75% of Americans report soaring prices as Trump claims inflation ‘over’

Exclusive poll: Inflation remains a concern despite president’s pledge to reduce prices on ‘day one’

Nine months after Donald Trump took office, promising to reduce prices on “day one”, a clear majority of Americans say their monthly costs have risen by between $100 and $749, according to an exclusive new poll conducted for the Guardian.

The president has continued to insist that there is “virtually no inflation”. “Prices are ‘WAY DOWN’ in the USA,” Trump wrote on social media in late August.

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French Socialist party to fight for wealth tax as it seeks to capitalise on crisis

Party has promised to stand back as weakened prime minister prepares for crucial no-confidence vote

The French Socialist party says it will fight to introduce a flagship wealth tax to raise revenue by targeting France’s richest people, as the divided parliament prepares to begin debating next year’s budget.

Boris Vallaud, the head of the Socialist party grouping in parliament, said on Wednesday that taxing very high-wealth individuals in France was “one of our principal battles and we’re going to put all our energy into it”.

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Rachel Reeves says higher taxes on wealthy ‘part of the story’ for November budget

Exclusive: Chancellor hints at rises and calls out past ‘scaremongering’ over VAT on private schools and changes to non-doms

Rachel Reeves has said higher taxes on the UK’s wealthy will form part of next month’s budget, as she shrugged off the “scaremongering” and “bleating” of her critics, and stressed her determination to repair the public finances.

Speaking in Washington, where she is attending the annual meetings of the International Monetary Fund (IMF), the chancellor told the Guardian there “won’t be a return to austerity” and hinted at tax increases for the most well-off.

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China warns US of retaliation over Trump’s 100% tariffs threat

Beijing says it will act if US president doesn’t stand down, while investors brace for trade war turmoil

Beijing has told the US it will retaliate if Donald Trump fails to back down on his threat to impose 100% tariffs on Chinese imports as investors brace for another bout of trade war turmoil.

China’s commerce ministry blamed Washington for raising trade tensions between the two countries after Trump announced on Friday that he would impose the additional tariffs on China’s exports to the US, along with new controls on critical software, by 1 November.

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