Canada’s Mark Carney signals austerity measures as government shifts focus from Trump to economy

Prime minister cautions Canadians as Ottawa moves to curb spending to balance near-record military expenditures

Mark Carney has told Canadians to prepare for austerity measures and his finance minister warned of “tough choices” in the coming months, as the government attempts to balance near-record defence spending, cuts to government programs and a trade war with the United States.

Carney, the former central banker and economist turned politician, has been meeting senior ministers before the fall budget, and hinted cuts were coming to the federal bureaucracy.

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Scrap two-child benefit cap to help lift 4m people out of poverty, government urged

Exclusive: Cross-party Poverty Strategy Commission says abolishing limit would be part of its ‘once in a generation’ plan

A cross-party commission including former welfare ministers is urging the government to scrap the two-child benefit limit as part of an ambitious “once in a generation” plan to lift millions of people out of poverty.

The Poverty Strategy Commission said billions of pounds of investment – including a boost to the rate of universal credit – was needed to reverse record levels of poverty in the UK, and tackle longstanding failures over rising hardship and destitution.

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Farage a ‘Putin-loving, free speech impostor’ says Democrat before Reform head’s US speech – UK politics live

Jamie Raskin says Farage is ‘a Trump sycophant’ before UK politician addresses the House judiciary committee in Washington

Kemi Badenoch is probably hastily redrafting her PMQs script in the light of Angela Rayner’s statement about underpaying her stamp duty. She has got less than half an hour to craft the right questions. And she will probably want to ask about the economy, and hate speech laws, too.

Here is the list of MPs down to ask a question.

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Treasury targeting inheritance tax reforms to help plug UK deficit

Exclusive: Chancellor also looking at tweaks to capital gains tax to try to bridge £40bn-plus spending gap before budget

The Treasury is looking at ways to raise more money from inheritance tax amid growing pressure on the country’s finances ahead of the autumn budget, sources have told the Guardian.

Officials have been tasked with examining whether tightening rules on the gifting of money and assets could be one way of addressing a gap between revenue and spending that is estimated to reach more than £40bn.

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Conservatives not close to recognising ‘how badly placed they are’, says Gauke

Former minister says Tories are ignoring heartland voters and risk losing ground to Reform in next election

The Conservatives are “not close to recognising” how badly they are positioned for the next election, the former cabinet minister David Gauke has said.

Gauke, a former justice secretary who also worked in the Treasury under George Osborne, said many in the party were not willing to fully repudiate Liz Truss and Boris Johnson.

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Starmer declines to rule out election pledge-breaking tax rises in budget after claim Treasury must fill £40bn deficit – as it happened

Prime minister defends government’s handling of economy but will not give assurances over not raising income tax, employee NI or VAT

Ed Davey, the Liberal Democrat leader, has urged Keir Starmer to call Donald Trump to encourage him to use his influence to block Israel’s plans for a “full occupation” of Gaza.

In a statement, Davey said:

[Israeli PM Benjamin] Netanyahu’s latest proposals for the occupation of all of Gaza are utterly horrifying.

If realised, they will only wreak yet more destruction on Gazans - while gravely endangering the lives of the hostages still held in Hamas’ captivity.

I see NIESR is talking today about a £41.2bn hole in the UK public finances

Two things are newsworthy:

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Rachel Reeves needs to put up taxes to cover £40bn deficit, thinktank says

NIESR suggests a rise of 5p in the pound on basic and higher rate of income tax would fill the budget gap

Rachel Reeves will need to raise taxes to close a government spending gap that is on course to reach more than £40bn after a slowdown in economic growth and higher-than-expected inflation, according to a leading thinktank.

In a blow to Labour’s hopes of balancing the books without breaking manifesto commitments ruling out personal tax rises, the National Institute of Economic and Social Research (NIESR) said a number of factors would knock off course the chancellor’s plans to stay within Whitehall spending limits.

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Starmer and Reeves should consider wealth tax, says former shadow chancellor

Anneliese Dodds urges government not to duck ‘big decisions’ in autumn budget

The Treasury should consider a wealth tax to close the growing gap in the public finances, according to a Labour former shadow chancellor.

Anneliese Dodds, who held the role under Keir Starmer in opposition, said ministers must have a “full and frank discussion” with the public about the “really big decisions” they had to take at this autumn’s budget.

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Ofwat to be abolished in ‘reset’ of water industry regulation

Environment secretary backs plan to end sewage spills and financial mismanagement in England and Wales

A new water regulator will replace the powers of Ofwat, the Drinking Water Inspectorate and the Environment Agency to “reset” a sector tarnished by scandals over sewage spills and financial mismanagement, after a major review of the sector.

The government will adopt the recommendation for England and Wales made in the review it commissioned from Sir Jon Cunliffe, a former deputy governor of the Bank of England, which was released on Monday. In England, the powers of Natural England will also be subsumed.

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UK unemployment rises and wage growth slows as jobs market ‘weakens’

ONS data shows jobless rate climbing to highest rate since June 2021 with growth in average earnings slowing to 5%.

Unemployment climbed and wage growth slowed in the three months to May, according to official figures that will pressure the Bank of England to cut interest rates next month.

Data from the Office for National Statistics, released on Thursday, showed that Britain’s official unemployment rate rose to 4.7% in the three months to May, up 0.1% from April to reach the highest level since June 2021.

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Treasury minister says ‘headline’ rate of income tax won’t go up, in hint thresholds might be frozen in budget – UK politics live

Darren Jones also declines to rule out wealth tax when questioned about government plans

In an interview with the Times, Andrew Bailey, governor of the Bank of England, says firms are “adjusting employment and hours” in the light of last year’s rise in employer NICs. That sounds like a euphemism for cutting jobs. But he says, if the labour market slow down, the Bank may respond by cutting interest rates more aggressively.

Asked about this comment in an interview on the Today programme, Darren Jones, chief secretary to the Treasury, played down the impact of the budget. He said:

There’ve also been hundreds of thousands of new jobs created across the economy, and in the first quarter of the year [we had] the fastest growing economy in the G7, so we’re doing everything we can to create conditions for businesses to be profitable and to be able to grow.

Of course, we had that particular tax decision in the budget last year, because our commitment was to protect working people in their pay slips. And I recognise the independence of the bank governor.

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Government inheriting poor value assets due to bad handling of PFI contracts, watchdog says

Public accounts committee warns UK infrastructure risked becoming ‘stony ground’ for investors without major overhaul

Bad management of private finance contracts is leading to poor quality assets being handed back to the government, including schools and hospitals, according to parliament’s spending watchdog.

Its report into the use of private finance initiatives (PFI) for infrastructure comes at a time when the government has identified private investment in projects such as power plants and transport outside London as a key part of its growth agenda.

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Trump praises English of the leader of Liberia – where English is the official language

Trump inquired where Liberian president Joseph Boakai got his language skills during meeting with African leaders

Donald Trump was basking in the praise of a group of African leaders on Wednesday, when the Liberian president took the microphone.

“Liberia is a longtime friend of the United States and we believe in your policy of making America great again,” President Joseph Boakai said in English at a White House meeting before advocating for US investment in his country. “We just want to thank you so much for this opportunity.”

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UK borrowing rises to £17.7bn, adding to pressure on Rachel Reeves

May figure second highest for month on record amid fears chancellor is struggling to keep within spending rules

Higher tax receipts were unable to prevent a rise in public sector borrowing in May to £17.7bn, up from £17bn a year earlier and the second highest for the month on record.

A poll of City economists had forecast public sector net borrowing – the difference between public spending and income – would be £17.1bn.

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Sizewell C power station to be built as part of UK’s £14bn nuclear investment

Ed Miliband promises to ‘get Britain off the fossil fuel rollercoaster’ with new plant expected to create 10,000 jobs

The biggest nuclear programme in a generation will “get Britain off the fossil fuel rollercoaster”, the energy secretary, Ed Miliband, has said, announcing £14.2bn to build a new nuclear power station and a drive to build small modular reactors.

The multibillion-pound investment at Sizewell C on the Suffolk coast, which has been long expected, will create 10,000 jobs and power the equivalent of 6m homes.

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Rachel Reeves in standoff over policing and council budgets days before spending review

Chancellor still at negotiating table on Sunday as Home Office demands more cas

Rachel Reeves has been locked in a standoff over the policing and council budgets just days before this week’s spending review, which is set to give billions to the NHS, defence and technology.

Yvette Cooper’s Home Office and Angela Rayner’s housing and local government ministry were the two departments still at the negotiating table on Sunday fighting for more cash, after weeks of trying to reach a settlement.

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Government sells final shares in NatWest 17 years after £45bn bailout

Sale ends state ownership of the banking group, then known as Royal Bank of Scotland, after 2008 rescue

The UK has sold its final shares in NatWest Group, ending 17 years of state ownership since the £45bn taxpayer bailout that saved the bank from collapse at the height of the 2008 financial crisis.

The full privatisation of NatWest is a symbolic moment for the banking group – formerly known as Royal Bank of Scotland (RBS) – and draws a line under the most tumultuous chapter in its near 300-year history.

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No 10 delays child poverty strategy with tens of thousands more facing hardship

Exclusive: Flagship policy put back until at least autumn amid fears cost of removing two-child benefit cap will outweigh political benefit

Labour’s flagship child poverty strategy has been delayed until at least the autumn, the Guardian has learned, even though tens of thousands more children will fall into poverty as a result.

The decision to push back the strategy comes amid Treasury concerns about the cost implications of ending the two-child limit on universal credit and questions inside No 10 over the political benefits of scrapping it.

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UK asking other countries to host ‘return hubs’ for refused asylum seekers, Starmer confirms – UK politics live

PM on trip to announce increased cooperation against people smugglers alongside Albania’s prime minister, Edi Rama

All Commons Speakers, at least for the past 30 years, have complained about the government making major announcements to the media first, and not to parliament first. But rarely have any of them sounded quite as furious about this as Lindsay Hoyle, who this morning delivered an extended reprimand to the government about this at the start of an urgent question.

The UQ was about plans to limit the use of prison recall – something announced by the justice secretary, Shabana Mahmood, at a press conference yesterday, while the Commons was still sitting. After pointing this out, and reminding MPs that details of the immigration white paper were given to the media extensively, long before the ministerial statement about it was delivered in the Commons on Monday, Hoyle went on to imply that, as well as regularly breaking the ministerial code, ministers were also guilty of hypocrisy. He said:

I note that those who now occupy senior ministerial roles were not slow to complain when the previous government made major policy announcements outside this house.

I will continue to uphold and defend the rights of this house, the rights of backbenchers, to be here, and hear it first, the most important announcements of government policy, and the right of honourable members to question ministers on those announcements in person.

When Parliament is in session, the most important announcements of government policy should be made in the first instance in Parliament.

If the government is not going to take the ministerial code seriously, who will?

I’ve got to say, I don’t like this. I believe I am here to represent all backbenchers and backbenchers have the right to ask questions. I’m not interested in Sky News or the BBC or political programmes. I’m here to defend all of you. I will continue to defend. Please do not take MPs for granted. It is not acceptable.

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London dominates England’s social mobility league with top 20 places

Sutton Trust ‘opportunity index’ measured factors such as children on free school meals passing key GCSEs

The top 20 constituencies with the best social mobility in England are all in London, according to research from a leading education charity that underscores the stark regional divide in children’s life chances.

In a report published on Thursday, the Sutton Trust has put together an “opportunity index” by analysing six measures of mobility. These include the share of children on free school meals who achieve passes in GCSE maths and English; who complete a degree by age 22; and who make it into the top 20% of earners by age 28.

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