Category Archives: Government borrowing

Labour condemns Reform’s plan for £100bn in cuts as ‘half-baked’ and ‘incredibly reckless’ – UK politics live

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Labour chair says uch cuts ‘could mean vital public services like hospitals, schools and law enforcement are put at risk’

The Electoral Commission has released political donation figures for the second quarter of 2026. They show that Reform UK continues to rake in far more than other parties. Nigel Farage’’s party had declared donations worth £5.3m. Labour got £3.6m, and the Conservatives £2.8m.

Most of Reform UK’s money came from Ben Delo, who gave £4m. As Rowena Mason reported earlier this year, Delo is a British billionaire convicted in the US for failing to implement adequate anti-money-laundering controls in his cryptocurrency business.

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

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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

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

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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?

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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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Healey urged to be bold on borrowing in first test of Burnham’s growth pledge

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Some want the chancellor to exploit newly flexible fiscal rules – others want a more creative approach, such as borrowing from markets

With just 12 weeks to go until his first budget, new chancellor John Healey is seeking ways to ramp up public investment, without busting the Treasury’s fiscal rules – and some economists are urging him to be bold.

As he settles into No 11 Downing Street, the former defence secretary’s most immediate challenges concern day-to-day government spending.

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Healey urged to be bold on borrowing in first test of Burnham’s growth pledge

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Some want the chancellor to exploit newly flexible fiscal rules – others want a more creative approach, such as borrowing from markets

With just 12 weeks to go until his first budget, new chancellor John Healey is seeking ways to ramp up public investment, without busting the Treasury’s fiscal rules – and some economists are urging him to be bold.

As he settles into No 11 Downing Street, the former defence secretary’s most immediate challenges concern day-to-day government spending.

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Starmer says he wants to ensure disruption during transition to Burnham government ‘absolutely minimised’ – UK politics live

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PM says: ‘I love this country, I want this country to thrive, and I shall do everything I can to make sure it’s a success and thrives’

In her Q&A this morning Rachel Reeves, the chancellor, confirmed that she wants the government to approve the licences for the Rosebank and Jackdaw oil and gas fields in the North Sea.

She said:

I’ve been very clear that I think that the North Sea is a crucial asset for the UK, and that oil and gas will be an important part of our energy mix for years to come. And I’m very keen to make sure that we use that resource, to ensure our energy security.

There are decisions to be made shortly on both Rosebank and Jackdaw. Those are quasi-judicial decisions. But in our manifesto two years ago, we committed to honour existing licences, and I hope that we do.

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

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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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Minister defends Mandelson file redactions and says documents to be released in June – UK politics live

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Darren Jones says release will be ‘one of the largest government publications ever laid in this house’

On Friday parliament’s intelligence and security committee issued a damning statement about the government’s response to the humble address requiring the release of documents relating to the appointment of Peter Mandelson as ambassador to the US. It said the government was not fully complying with what is in effect an instruction from the Commons. For good measure, the committee also accuses the government of not keeping proper record of its decisions and of doing far too much business by WhatsApp. Here is our story, by Henry Dyer and Paul Lewis.

At 12.30pm Jeremy Wright, deputy chair of the committee and a former Tory attorney general, will ask a Commons urgent question about this. He is asking Darren Jones, the chief secretary to the PM, to reply.

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Pound heads for worst week in 18 months as Burnham lines up Labour bid

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UK government borrowing costs jump amid political uncertainty and oil price rise that fuelled inflation worries

The pound was heading for its worst week in 18 months on Friday as City traders anticipated that the UK prime minister, Keir Starmer, could face a challenge from the Manchester mayor, Andy Burnham, later this year.

After days of uncertainty over Starmer’s future, sterling dropped by almost three cents, or 2%, during the week to $1.336 on Friday, a five-week low. That would be the largest weekly drop against the US dollar since Donald Trump’s election win in early November 2024.

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

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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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UK government borrows more than expected in setback before budget

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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

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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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France is in crisis but bond markets leave other governments at risk of meltdown too

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Investors rattled by resignation of French PM but country is not alone in trying to grapple with political maths

Sébastien Lecornu’s abrupt resignation as the French prime minister on Monday after less than a month in the role marked the latest clash between France’s stretched public finances and its polarised politics.

Lecornu was the latest prime minister to try and fail to cobble together a package of spending cuts and tax rises that would pass muster in a parliament without a clear majority, and contain mounting bond market pressures.

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

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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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UK borrowing rises to £10.7bn in setback for Rachel Reeves

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February figure comes in higher than forecasts less than a week before chancellor’s spring statement

UK government borrowing rose by more than expected in February to £10.7bn, underscoring the challenge for Rachel Reeves before next week’s spring statement.

Figures from the Office for National Statistics showed borrowing – the difference between total public sector spending and income – was little changed from the same month a year earlier. However, over the financial year to date borrowing was up nearly £15bn on the same period last year.

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Former Bank of England deputy warns Rachel Reeves against kneejerk cuts

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Charlie Bean says OBR forecasts are ‘flaky’ and cautions against trying to hit targets five years away

The former Bank of England deputy governor Charlie Bean has warned the chancellor against making kneejerk cuts in next week’s spring statement to try to hit fiscal targets that are five years away.

Rachel Reeves is preparing to slash spending, including on disability benefits, in response to weaker forecasts from the independent Office for Budget Responsibility (OBR) – prompting a backlash from within her own party.

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Unambiguously bleak Bank of England forecasts pave way for spending cuts

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Weak jobs market and above-target inflation will dent Reeves’s growth plans and may wipe out fiscal headroom

With the public finances tight and Rachel Reeves having pledged to balance the books, interest rate cuts are one of the few levers that could boost the UK’s economic growth in the short term, and the chancellor will be glad of the Bank of England’s quarter-point reduction on Thursday – and the clear signal that it is now in cutting mode.

Seven of the monetary policy committee’s (MPC) nine members backed the quarter-point drop, taking the Bank’s policy rate to 4.5%, while two wanted to be more “activist”, proposing a half-point cut. The Bank of England’s governor, Andrew Bailey, said the MPC would be “taking a gradual and careful approach to reducing rates further”.

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UK borrowing jumps unexpectedly, adding to pressure on Rachel Reeves

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Increase to £17.8bn is well above City forecasts and is highest December figure for four years

UK government borrowing jumped unexpectedly to £17.8bn last month, piling pressure on Rachel Reeves to plan budget cuts before a spending review in the summer.

The figure was about a quarter higher than the City had forecast and was up by £10.1bn more than in the same month a year earlier, making it the highest December borrowing for four years.

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