George Osborne calls for UK to rejoin EU customs union and boost trade

Ex-Tory chancellor says economy has ‘fallen off a cliff’ since Brexit but rejoining union could be ‘quite simple’

The former chancellor George Osborne said Britain’s economy had “fallen off a cliff” since Brexit and that rejoining the European Union’s customs union would be the fastest route to recovery.

Osborne, who was sacked as chancellor by Theresa May after being part of David Cameron’s cabinet at the time of the referendum, said it was important to rebuild links with the EU.

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UK chancellor urged to remove £100k childcare ‘cliff edge’ prompting parents to cut work hours

Critics say threshold pushes higher-paid staff to cut back on work and often mothers to stop working to avoid losing entitlement

John Healey has been urged to fix the £100,000 childcare “cliff edge”, that means some higher-paid employees cut back on work to avoid losing their entitlement.

Since the latest expansion of taxpayer-funded childcare in 2024, families with young children in which both parents earn less than £100,000 a year can be entitled to 30 hours a week of care - or none at all, if one of them cross that threshold.

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Majority of Tory and Reform voters do not back cuts to disability benefits, survey finds

Nearly half of respondents say spending on personal independence payments should be increased

There is little appetite for cuts to disability benefits even among Conservative and Reform voters, and proposals to reduce spending could prove politically risky, according to an authoritative national survey.

The British Social Attitudes (BSA) report found that while support for welfare spending as a whole had dipped sharply in recent years, just 7% of respondents backed cuts to disability benefits – and 49% said they should be increased.

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Camden Green councillor says he will fight Polanski to run in Starmer’s seat – UK politics live

Hamza Chowdhury says he will challenge party leader and has received nominations from other Green councillors

Healey says Andy Burnham set out in his statement to MPs last week what he thought had gone wrong

The fundamentals of our economy [were] hollowed out through a series of past policy decisions, political power was centralised, weakening the relationships between the people, the businesses and the institutions who can make things happen beyond Whitehall. The economic enablers were privatised and outsourced, leaving accountability to a thicket of arm’s length bodies and regulators, too often without the predictability or the pace that underpins a thriving market economy. And our country was deindustrialised as the cost to make anything, to build anything here soared, and our dependence on unreliable sources grew, including in areas critical to our national security and sovereignty.

Let me be clear, I recognise that the costs of business, its energy bills, regulation, burdens, planning constraints, labour costs, have grown since Covid and I want to draw the line.

And whether it is the cost of business or the cost of living, the only way we deal with these in the long term is growth.

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Burnham beware, the bond markets will demand proper answers in the budget | Nils Pratley

Fair to say the current sell-off is international, but the PM has said little yet to make investors rethink the UK’s status

It’s too soon to say the bond markets have turned on Andy Burnham. Tuesday’s spike in gilt yields, taking the UK’s 30-year borrowing costs to their highest level since 1998, was part of an international sell-off of government debt.

The main contributors are well known. The Iran war, by increasing the cost of energy, has overturned the comforting start-of-the-year thesis of falling global inflation and interest rates. A plunging Japanese yen has kicked away another assumed source of financial stability. The US treasury secretary, Scott Bessent, hasn’t calmed nerves with his solo, and so far futile, attempt to bring down US yields. Meanwhile, the early stage of the AI revolution is an exercise in issuing squillions of debt before long-term returns on capital can possibly be assessed meaningfully.

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UK long-term borrowing costs could halve chancellor’s budget headroom

Yield on 30-year gilts highest since 1998 as rout triggered by global factors underlines tricky backdrop John Healey faces

The chancellor’s headroom against Labour’s fiscal rules could be almost halved at his first budget if the current global bond sell-off persists into the autumn, economists say.

The UK’s long-term borrowing costs jumped to their highest level since early 1998 on Tuesday as investors dumped government bonds, betting on higher inflation.

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Andrew Griffith and Tom Tugendhat join Badenoch’s top team in Tory reshuffle

Conservative leader sacks shadow chancellor Mel Stride and shadow foreign secretary Priti Patel

Kemi Badenoch sacked her shadow chancellor, Mel Stride, and the shadow foreign secretary, Priti Patel, in a sweeping Conservative reshuffle on Monday, replacing Stride with Andrew Griffith, and Patel with Tom Tugendhat.

Stride, who had been shadow chancellor since Badenoch became leader, was widely seen among Tories as failing to make an impression at a time when Labour had been under pressure over the economy.

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UK reports unexpected deficit of £1.8bn as John Healey prepares for first budget

July data shows total public debt was £2.98tn, or 94% of GDP – up £96bn on a year earlier

The UK government ran a larger than expected £1.8bn deficit in July, underlining the challenges facing the chancellor, John Healey, as he draws up his first budget.

City economists had expected a shortfall of zero for July, a month when Treasury receipts tend to be swollen by self-assessment income tax payments.

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Can Andy Burnham rewire the ‘Treasury brain’ to boost growth?

PM wants to reduce department’s stranglehold on public purse and bring long-term thinking to economic policy

Andy Burnham is far from the first prime minister to dream of taming the power of the mighty Treasury.

Boris Johnson all but forced the resignation of Sajid Javid by handpicking his team; Margaret Thatcher favoured her economic adviser Alan Walters over Nigel Lawson, prompting the latter’s furious resignation; and Tony Blair and Gordon Brown’s power struggle was the stuff of Whitehall legend.

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Rising inflation underlines scale of Andy Burnham’s cost of living challenge

PM’s plan to shield households from more pressure risks being overwhelmed by wider price rises

July’s increase in inflation, to 2.9%, is likely to be the first of several, underlining the challenge facing Andy Burnham in shielding consumers from a fresh cost of living squeeze this autumn.

Rising energy bills, as an increase in Ofgem’s quarterly price cap came into force, were the main driver of the jump in inflation, from 2.6% in June. That was partly offset by cheaper fuel prices – the knock-on effect of hostilities easing in the Middle East, after Donald Trump hailed his “memorandum of understanding” with Iran in June.

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UK heatwaves may have cost economy £4.4bn in lost output so far this year, analysis finds

Verdant thinktank says cost could top £25bn a year by 2030 and calls for maximum temperature for working and urban redesign to cool down cities

Repeated debilitating heatwaves this summer are likely to have cost the UK economy more than £4bn in lost economic output by the end of July, new analysis shows.

Green thinktank Verdant had suggested June’s unseasonally hot weather had an economic cost of £2.36bn. Updating its assessment to include last month’s high temperatures, it finds a £4.4bn hit to output.

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Andy Burnham vows to ‘bring back hope’ as he unveils his cabinet

New prime minister says government must ‘do better’ to deliver change but promises prudent approach to economy

Andy Burnham has said his arrival in power will “bring back hope” to Britain as he launched his premiership with the surprise appointment of John Healey as chancellor and a promise to repair the damage caused to communities during the Thatcher era.

The new UK prime minister acknowledged people were “fed up” with politics as he addressed the country after taking over from Keir Starmer in Downing Street, saying the government needed to “do better” to deliver real change.

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Burnham’s vow to end Labour briefing wars will test his grip on the party

Tensions between his aims are already there, including disputes over key appointments such as chancellor

Andy Burnham’s vision for cleaning up Westminster politics is a utopian one: ending the dominance of the whipping system, Whitehall power hoarding and the “insidious briefing culture” of the bubble.

In his first speech on becoming Labour leader, he warned his party it “won’t beat Britain’s new right if we are consumed by infighting and pulling in different directions”.

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Restoring Britain’s health to 2014 levels could add 2% to GDP, thinktank says

Health Foundation paper argues health is an economic asset and improving it could generate £72bn for public finances

Restoring the deteriorating health of the UK’s population to the level of 2014 would boost GDP by 2% and generate a £72bn dividend for the public finances, research suggests.

A paper by the Health Foundation thinktank, published on Sunday, argues the nation’s health should be valued by policymakers as an economic asset.

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Treasury yet to do due diligence on finding extra money for UK’s Nato spend

How to hit the 3.5% of GDP defence spending promise would be a matter for ‘the next prime minister’, MPs told

The Treasury has as yet carried out no analysis of the trade-offs necessary for the UK to hit the 3.5% of GDP defence spending promise made to Nato, the department’s chief secretary has said.

Under robust questioning in a joint session of the Treasury and defence select committees on Wednesday, Lucy Rigby repeatedly said that how to fund additional defence spending would be a matter for “the next prime minister”.

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Lucy Powell agrees Ed Miliband would be ‘good’ as Andy Burnham’s chancellor

Labour deputy leader says she thinks energy secretary would suit Treasury but ‘tittle-tattle’ over posts ‘unedifying’

Ed Miliband would make a “good” chancellor to Andy Burnham, Labour’s deputy leader, Lucy Powell, has said, before the likely next prime minister’s first major speech on the economy since he returned to Westminster.

Powell, who served as Miliband’s chief of staff in opposition and is close to the former party leader, appeared to endorse him to run the Treasury – although some in Burnham’s camp acknowledge such a move could be politically risky.

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‘Act on the evidence outside the window’: Andy Burnham urged to stick to net zero targets if he becomes PM

Mayor of Manchester is coming under pressure from some to ditch net zero targets but this could be highly damaging on many levels

Britain’s net zero economy is booming. The sector is worth £100bn a year to the UK, has outpaced other sectors, and supports higher-paying jobs than the average.

For a union leader to suggest that the man who has overseen this impressive record – the energy secretary, Ed Milibandwould be a “noose around the neck” of job creation, as Unite’s Sharon Graham has done, might seem extraordinary.

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Reform UK plan to target EU nationals based in Britain ‘absolutely outrageous’

Exclusive: Rights group says Nigel Farage’s party is reneging on promises made during the Brexit referendum campaign

EU nationals based permanently in the UK have expressed alarm over a Reform UK plan to target their rights to accommodation and employment, saying the policy is a betrayal of promises made in the Brexit referendum 10 years ago.

Under updated migration policies, Nigel Farage’s party would evict all overseas nationals from social housing and make it notably more expensive for companies to employ them, with both policies also affecting EU nationals who have settled status.

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Darren Jones says bond markets should be ‘content’ with Burnham’s economic plans – UK politics live

Chief secretary to PM rules out leadership bid as he says he has received reassurances from Burnham

London, Oldham, Bradford and Keighley are to be the first towns and cities investigated by the grooming gangs inquiry, the Press Association reports. PA says:

The £65m probe is investigating how grooming gangs operated and how police, councils, health services, social care services and schools responded.

The announcement confirmed which areas will first face so-called local investigations – where serious failures have been identified in response to child sexual exploitation by grooming gangs.

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Burnham brings in top economists before possible leadership run

Labour mayor giving advisory roles to ex-Bank of England economist and others seen as attempt to reassure markets

Three economic heavyweights have been brought in to advise Andy Burnham as he attempts to reassure the markets before his possible return to parliament on Friday and challenge to Keir Starmer.

Burnham is understood to be getting advice from Andy Haldane, a former Bank of England chief economist, as well as Richard Hughes, a former chair of the Office for Budget Responsibility and Jim O’Neill, a crossbench peer and former Treasury minister who worked on George Osborne’s “Northern Powerhouse”.

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