Treasury seeks to keep water firm fines earmarked for sewage cleanups

Exclusive: Restoration fund in England could be ‘siphoned off’ to be used for general government spending, not repairing rivers

Rachel Reeves’s Treasury is looking to keep millions of pounds levied on polluting water companies in fines that were meant to be earmarked for sewage cleanup, the Guardian has learned.

The £11m water restoration fund was announced before the election last year, with projects bidding for the cash to improve waterways and repair damage done by sewage pollution in areas where fines have been imposed.

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Pound falls to 14-month low as bond sell-off piles pressure on Rachel Reeves

UK borrowing costs rise again, with analyst warning ‘things are also getting rather ugly’

The pound has fallen to a 14-month low against the US dollar as the sell-off in the bond market fuelled investors’ anxiety over UK assets and piled further pressure on the chancellor, Rachel Reeves.

As the bond sell-off gathered steam, sterling lost a cent against the US dollar, extending recent losses, falling to about $1.226.

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Rachel Reeves heads to China to build bridges, but a new golden era of relations is impossible

Seeking business partners post-Brexit is sound policy, but even in these darker geopolitical times the UK will ultimately side with the US

Rachel Reeves will fly with a delegation of City grandees to China this week as Labour seeks closer economic links with Beijing as part of its quest for growth.

With the outlook increasingly rocky at home after a run of soft economic data, the chancellor is sorely in need of a positive story to tell.

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Trump versus trade: the global economic outlook for 2025 in five charts

Unpredictable change will sweep through America, while old problems, from war to inflation, are likely to afflict other countries

The global economy is entering the new year with rising geopolitical tensions looming over its prospects, as the world’s leading central banks attempt to cut interest rates after the worst inflation shock in decades.

Donald Trump’s second term in the White House is expected to dominate the economic agenda. Global trade tensions are on the horizon as the president-elect threatens to impose sweeping tariffs on US imports.

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UK interest rates to fall more slowly than expected after budget, claims report

Government’s spending and borrowing plans mean rates will stay higher for longer, according to OECD

UK interest rates will fall by less than expected over the next two years after Rachel Reeves revealed significant spending and borrowing plans in the budget, according to an influential report.

In its annual economic survey, the Organisation for Economic Cooperation and Development (OECD) said UK inflation would also surpass previous forecasts next year, and upgraded growth projections for the economy, because of boost from October’s budget.

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Rachel Reeves appoints Covid corruption commissioner

Exclusive: Tom Hayhoe, ex-Tory cabinet adviser, will examine an estimated £7.6bn of Covid-related fraud

Rachel Reeves is to appoint a health service and regulatory veteran, Tom Hayhoe, a former Conservative cabinet adviser, as her Covid corruption commissioner with the remit of clawing back billions in fraudulent contracts.

The chancellor is understood to believe the Treasury can recoup £2.6bn from waste, fraud and flawed contracts signed during the pandemic.

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UK cabinet ministers barred from visiting Russia amid missile row

Moscow bans Labour figures including Angela Rayner, Yvette Cooper and Rachel Reeves under new sanctions

Russia has banned cabinet ministers including Angela Rayner, Yvette Cooper and Rachel Reeves from entering the country under new sanctions announced by Moscow’s foreign affairs ministry.

More than a dozen other senior Labour politicians are among the 30 British citizens on the Russian “stop list” after tensions between London and Moscow rose following Ukraine’s recent use of British missiles to strike deeper into Russia.

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UK politics live: safeguarding minister Jess Phillips urges people to intervene if women are being harassed in public

Phillips says people have to be mindful of their own safety but ‘you can definitely ask if someone is alright’

Q: Are you feeling the pressure? There is a petition signed by 2 million people calling for another election.

Starmer says he is not surprised that people who did not support Labour in the first place want the election to be re-run. But that is not how the system worked.

I’m not surprised, quite frankly, that as we’re doing the tough stuff, there are plenty of people who say, ‘Well, I’m impacted.’

I think anybody who’s turned around an organisation or a business will tell you, and they’re right, if you’re really going to turn something around, you have to do the hard yards upfront. Don’t look at a tough decision and then leave it for a year or two.

So we’re doing the tough stuff. But in the budget, which is probably the toughest, I’m really pleased that we were able to put so much money into the National Health Service … Anybody watching this who uses the NHS will know we absolutely had to make that a priority.

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Rachel Reeves standing firm against U-turn on inheritance tax for farmers

Chancellor understood to be determined to keep policy despite Treasury analysing ways to soften impact

Rachel Reeves is holding firm against a U-turn on inheritance tax for farmers, despite the Treasury analysing ways of softening the impact.

The chancellor is understood to be determined not to drop the policy even though some Labour MPs – and even ministers – are worrying about the political fallout that has led to farmers protesting in Westminster this week.

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Starmer says most farmers won’t be affected by inheritance tax change as Clarkson tells rally it’s a ‘hammer blow’ – UK politics live

Jeremy Clarkson tells Westminster protest that government should admit plans weren’t ‘thought out and are a mistake’

In an interview with the BBC, Steve Reed, the environment secretary, defended imposing inheritance tax on some farms when Labour said in opposition that it was not planning to do that. Asked why the government changed its mind, he replied:

After we won the election, we discovered that the Conservatives have left a £22bn black hole in the public finances. And if we want to fix our National Health Service, rebuild all schools, provide the affordable housing that rural communities and across the country rely on, then we’ve had to ask those with the broader shoulders to pay a little bit more.

I’m sure we all feel betrayed because of the state that the Conservatives left the economy in. A £22bn pound black hole isn’t a small problem. It’s massive, and fixing that is necessary if we want to stabilise the economy and rebuild our public services.

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Keir Starmer denies budget to blame for rise in mortgage rates

PM says budget stabilised the economy, while mortgage rates are ‘individual decisions for the banks’

Keir Starmer has conceded he was disappointed in the UK growth figures last week, but denied that his government’s budget was responsible for a recent rise in mortgage rates.

The prime minister told journalists travelling to the G20 summit in Rio: “What we have done with the budget is to stabilise the economy and that, in my view, was the essential first step.

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Keir Starmer says he wants ‘serious and pragmatic’ relationship with China – as it happened

Prime minister says he wants to ‘be clear about issues we do not agree on’ after meeting Chinese president Xi Jinping at G20

Keir Starmer has held his bilateral with Xi Jinping in Rio at the G20, offering to meet his counterpart, the Chinese premier Li Qiang, in Beijing or London at the earliest opportunity.

But the PM also raised human rights issues with Xi, including the sanctions on parliamentarians and the persecution of Hong Kong and British citizen Jimmy Lai.

A strong UK China relationship is important for both of our countries and for the broader international community.

The UK will be a predictable, consistent, sovereign actor committed to the rule of law.

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Reeves tells City regulator to encourage more risk-taking in financial sector

New remit given to FCA by chancellor raises fears of a weakening of rules meant to avert another financial crisis

The financial regulator has been ordered to encourage more risk-taking across the City, raising concerns that the Labour government is in danger of watering down rules meant to avoid another financial crisis.

In an official “remit” letter addressed to Financial Conduct Authority (FCA) boss, Nikhil Rathi, the chancellor, Rachel Reeves, said regulations meant to protect consumers should not stand in the way of “sensible risk-taking” by investors and the wider financial sector, which includes banks, asset managers and insurers.

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Shadow chancellor warns Reeves over EU ties after Bank chief says Brexit harming economy – as it happened

Mel Stride said there must be no suggestion of the UK going back into the EU single market or customs union

In news that will disappoint those of you who enjoy a Liberal Democrat stunt, PA has just reported that Ed Davey will not, as was planned, be taking a bus-driving lesson at a depot in Oxfordshire, due to logistical issues. Instead he will be visiting high-street businesses.

It is part of a campaign by the Liberal Democrats to get Labour to keep the bus fare price cap at £2 in England when it extends the scheme into next year.

The fare cap increase is like a bus tax for people across the country, impacting bus users and commuters already struggling to make ends meet. MPs must be given a say on this bus fare hike on behalf of their constituents.

Our communities have already paid too high a price for years of Conservative neglect and incompetence. This bus fare hike will hit cherished local businesses and high streets, many of which are already struggling.

Uncertainty around Labour’s first budget and high interest rates played their part, but [the GDP figures are] still a blow for Rachel Reeves, as [it] underlines difficulty of reaching her ambitious growth target.

Some in Labour want to recalibrate economic focus away from growth and towards cost of living ie “will people feel better off by time of next election?”

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UK disability charities say NICs rise will cause ‘life-changing’ cuts

Groups providing vital services say impact of tax and minimum wage rises will lead to cutbacks

Charities have warned of “life-changing consequences” for a million vulnerable children and adults as a result of cuts to state-funded disability services driven by tax changes and wage rises announced in the budget.

The Voluntary Organisations Disability Group (VODG), which represents 100 charities in England, said Rachel Reeves’s decision to raise employers’ national insurance contributions (NICs) had been “ill thought through” and would put many local charity services at risk.

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Boost UK defence spending to win Trump’s support, former navy chief urges Starmer

Lord West says Republican victory is chance to show Britain is willing to prioritise military by allocating 3% of GDP

Keir Starmer is being urged to consider an emergency cash injection into defence and to accelerate Britain’s planned review of its military capabilities before Donald Trump’s return to the White House.

Senior defence figures are now assessing how Trump’s victory will shape a strategic defence review (SDR) that was already under way in Whitehall, whose findings are due to be reported in the spring. The SDR comes alongside a crucial review of public spending.

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Tax unhealthy foods to tackle obesity, say campaigners

Health and children’s groups urge UK ministers to impose levies on products containing too much salt or sugar

Dozens of health and children’s groups have urged ministers to tackle obesity by imposing taxes on foods containing too much salt or sugar.

New levies based on the sugar tax on soft drinks would make it easier for consumers to eat more healthily by forcing food manufacturers to reformulate their products, they claim.

74% think food firms are not honest about the health impact of their products.

61% worry about the amount of sugar and saturated fat in what they eat.

Only 13% believe producers will make their food more nutritious without government intervention.

72% worry about high levels of processing used in food production.

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Starmer and Badenoch congratulate Trump on ‘historic election victory’ – UK politics live

Both PM and leader of the opposition offer congratulations with more full-throated support from Tory rightwingers such as Truss and Braverman

Another Labour politician who has criticised Donald Trump strongly in the past is Emily Thornberry, shadow foreign secretary when Jeremy Corbyn was Labour leader and now chair of the Commons foreign affairs committee. In an interview on the Today programme this morning she said Trump’s victory (or apparent victory – he still has not officially hit 270 electoral college votes) was “disappointing”, and that it made the world “unpredictable”.

When it was put to her that she described him as a “racist, sexual predator” when he visited the UK during his first term as president, she replied:

Well, he is. But he is the president of the United States, and we need to work with him.

I know that many Londoners will be anxious about the outcome of the US presidential election. Many will be fearful about what it will mean for democracy and for women’s rights, or how the result impacts the situation in the Middle East or the fate of Ukraine. Others will be worried about the future of NATO or tackling the climate crisis …

The lesson of today is that progress is not inevitable. But asserting our progressive values is more important than ever - re-committing to building a world where racism and hatred is rejected, the fundamental rights of women and girls are upheld, and where we continue to tackle the crisis of climate change head on.

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Trump tariffs would halve UK growth and push up prices, says thinktank

NIESR warns British economy would be one of the worst affected by protectionist policies

UK growth is likely to be halved by Donald Trump’s victory in the US presidential race if goes on to impose the swingeing new tariffs he has threatened, a leading thinktank has warned.

The National Institute of Economic and Social Research (NIESR) said the protectionist measures planned by the Republican challenger for the White House would result in weaker activity, rising inflation and higher interest rates from the Bank of England.

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Rachel Reeves ‘missed opportunity’ to raise £900m from online casinos

Labour’s links to gambling industry questioned again after decision not to raise tax rate for online gaming

Rachel Reeves has been criticised over a “missed opportunity” to raise £900m from online casinos in her first budget as chancellor, amid concerns about the Labour party’s ties to the £11bn-a-year gambling sector.

Both the Liberal Democrats and Derek Webb – one of Labour’s largest donors – questioned the chancellor’s rejection of proposals to double remote gaming duty (RGD), levied on online games of chance, from 21% to 42%.

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