Labour backbenchers have been cheering it as a win for the most vulnerable in society. In fact it was aimed at the bond marketsThe charge is a grave one: that Rachel Reeves has just lied to Britons, spooking them into paying billions in extra taxes that she can splash out on higher benefits. However hyperbolic, this isn't the usual Westminster sparring; this time, someone might get hurt. A week ago, critics of Reeves and Keir Starmer were, rightly, calling their budget chaotic". Today, it's denounced as lies, and Kemi Badenoch is demanding the chancellor quit.

Richard Hughes takes full responsibility' for watchdog error as Starmer attempts to secure chancellor's positionThe chair of the Office for Budget Responsibility has resigned after a damning internal inquiry into the leak that threw Rachel Reeves's budget into chaos described it as the worst failure" in the institution's history.The departure of Richard Hughes, who said he took full responsibility" for the watchdog's failure to handle sensitive information, dragged the rolling recriminations over the budget into a fifth day. Continue reading...

The government is trapped between Labour's instincts and bond traders' demands. Sensible fixes exist, but require imagination ministers have yet shownThe confected frenzy splashed across the morning front pages from the Telegraph to the Mail is remarkable mostly for its absurdity. An outrage machine has decided that a forecast of a few billion pounds in a model that makes projections about trillions of pounds of taxes and spending is the lie of the century. We can't predict the weather next year, but apparently the public finances in 2029 can be judged with pinpoint accuracy. That's why the headlines about holes" and sleaze probes" are a joke. It is theatre, but it is bad theatre.The Office for Budget Responsibility (OBR) possesses no great moral or predictive authority. Yet many of its accusers and defenders treat it as an allseeing oracle. In fact, the OBR, to its credit, admits that its medium-term projections are frequently wrong. It often wrongly estimates inflation and productivity, and has had its assumptions upended by unforeseen events. The OBR's 2019 five-year forecast undershot actual GDP growth by 200bn. Given this degree of error, treating a projected current budget balance of 20bn in 2029-30 as a hard fact is deeply unserious.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Treasury's independent economic forecaster says outlook for economy rosier than chancellor led everyone to believe

Richard Hughes says he is stepping down in order to restore confidence in organisationQ: Yesterday you said Rachel Reeves was lying. Today you are saying she gave out false information. Are you still accusing her of being a liar?Badenoch replies: Yes." Continue reading...

Keir Starmer has been pushed to defend his chancellor after she was accused of lying in the run-up to the autumn budget. Rachel Reeves is alleged to have misled the public by citing bleak economic forecasts from the Office for Budget Responsibility to justify tax rises, even though the figures were more positive than she suggested. Lucy Hough is joined by the head of national news, Archie Bland Continue reading...

Pippa and Kiran discuss the prime minister's speech on Monday and ask whether it will take attention away from allegations that the chancellor misled the public with her budget statements. Plus: chaos at Your Party's first conference Continue reading...

Rolling coverage of the latest economic and financial newsManufacturing activity across the eurozone has slipped back into contraction territory last month, as demand weakened and firms cut staff.The HCOB Eurozone Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, fell to 49.6 in November from 50.0 in October. That's a five-month low, and shows a small contraction. Continue reading...

Investigation finds organisation's leadership over many years was to blame for error, and similar breach happened earlier this year

Data comes as KPMG highlights soft consumer spending as one factor likely to hold back growth in 2026Shoppers held back from visiting high streets over Black Friday, data shows, amid fears weak consumer spending will put the brakes on economic growth in 2026.Visitors to all UK shopping destinations were down 2% on Friday and 7.2% compared with the equivalent days last year, according to the monitoring company MRI Software, with locations near central London offices among the few to experience a lift in visits. Continue reading...

Rising economic division is destabilising nations and eroding accountability. Joseph Stiglitz's G20 blueprint offers a way toward global economic renewalWhen Swiss tycoons handed Donald Trump a gold bar and a Rolex watch - gifts that were followed by a cut in US tariffs - it was no diplomatic nicety. It was a reminder of how concentrated wealth seems to buy access and bend policy. It may, alarmingly, become the norm if the global inequality emergency" continues. That's the message of the most recent work by the Nobel laureate Joseph Stiglitz. The economist sees the yawning gap between rich and poor as a human-made crisis which is destroying politics, society and the planet. He's not wrong.The problem is no longer confined to a few fragile states. It is a global harm, with 90% of the world's population living under the World Bank's definition of high income inequality". The US sits just below that threshold and is the most unequal country in the G7, followed by the UK. Prof Stiglitz's insight is that the current system's defenders can no longer explain its mounting anomalies. Hence he wants a new framework to replace it. His blueprint for change is contained within the G20's first-ever inequality report, endorsed by key European, African and middle-income nations.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

An honest debate is needed on this polarising topic as sectors such as social care struggle with recruitmentKeir Starmer's response to the 69% fall in net migration revealed in official figures last week was to remark: That's a step in the right direction."Describing a reduction of more than two-thirds of any indicator in a single year as a step" would be a creative use of statistics, putting it kindly. Continue reading...

The high-value council tax surcharge may only raise 400m but it's the best opportunity for a bigger, fairer tax on wealthRachel Reeves won little credit last week for lifting the lid on one of the most heated tax debates of the past three decades.Who in their right mind would consider engaging in the fight that would inevitably lead to some of the richest people in the land calling for your head? Continue reading...

Clarification creates prospect of two-tier system for retirees solely on new state pension and those on private schemesPeople who rely only on their state pension for their income will not have to pay tax on it, the chancellor, Rachel Reeves, has said, creating the prospect of a two-tier system for those in retirement.The new state pension is poised to rise to 241.30 a week next April, putting the annual income for someone receiving the standard payment at 12,547 - just below the personal tax allowance of 12,570 a year. Continue reading...

JP Morgan and Goldman Sachs to expand UK presence after sector was spared from higher taxes in budgetOver canapes of beef and stilton pie, bone marrow gravy and mushy peas, the financiers at JP Morgan's New York headquarters held their champagne flutes aloft for a toast: His majesty the king."Just days before Rachel Reeves's budget - amid the chancellor's efforts to soothe business fears and bond market jitters - Jamie Dimon, the Wall Street banking company's boss, was hosting a birthday celebration for King Charles at its new $3bn (2.3bn) Manhattan headquarters. Continue reading...

Let's set the record straight on the cause of our economic woes and inability to control immigration, writes Robert Gildea. Plus a letter from Rachel FoggittBetter late than never, Jonathan Freedland (Rachel Reeves is studiously ignoring the cause of Britain's woes: the Brexit-shaped hole in the roof, 21 November). Brexit was supposed to take back control" and sort out the immigration crisis. In both respects, it failed. Polish plumbers have been replaced by Afghans in asylum hotels, and the UK has forfeited the mechanism to return them to the EU. Meanwhile, with trade, investment and labour choked off, the economy grinds along at the bottom.The Labour government is petrified of reopening the debate for fear of losing votes to Reform UK, but responsibility for Brexit failures needs to be laid squarely at Nigel Farage's door. Through its 2024 pact on migration and asylum, the EU has a robust, collective way of dealing with migration; on our own, we are as likely to stop the boats as Canute was to turn back the waves. A recent poll showed that 57% of voters would return to the EU. Continue reading...

Downing Street brushes off claims that the chancellor misled voters about the state of the public finances ahead of the budgetThe Office for Budget Responsibility has said that Rachel Reeves, the chancellor, was not at risk of breaking her fiscal rules because of its productivity forecast downgrade.In a highly unusual move, Richard Hughes, chair of the OBR, has sent a letter to the Commons Treasury committee, giving details of the five assessments it sent to the Treasury ahead of the budget estimating whether or not the fiscal rules would be met.Before any policy measures, Rachel Reeves was forecast to be running a small current budget surplus in her key year of 2029-30 and therefore meeting her fiscal rules. No fiscal repair job needed. Even after accounting for the U-turns on winter fuel payments and disability benefits since the spring, she was running only a very small deficit. Continue reading...

Official forecaster's chair says chancellor knew about revised predictions well before her budget change of heart

In addition to rising prices and tariffs, readers cite growing unemployment as a reason not to exchange gifts this yearAmericans are feeling rattled about the state of the economy. Donald Trump has batted away question after question from reporters on concerns over higher prices, just a year after he won an election promising to bring down costs.While the White House has tried to reduce concern, floating tariff-funded $2,000 stimulus checks and removing import levies on certain agricultural imports, many consumers remain anxious. Continue reading...

Reuters news agency says it obtained document after visiting URL it predicted file would be uploaded to

Labour MPs welcome scrapping of two-child benefit cap but worry about hefty future tax increases on constituentsRachel Reeves has been warned that her plans for tax rises and spending restraint in the run-up to the next general election resemble a work of fiscal fiction", as MPs expressed concern about the impact of her budget on their constituents.A day after the chancellor's statement, the Institute for Fiscal Studies (IFS) said Reeves had chosen a high-risk strategy by backloading the squeeze to just before voters go to the polls in 2029. Continue reading...

Businesses grumble about lack of ambition and urgency as Rachel Reeves continues to shy away from meaningful tax reformWhere was the applause for the budget from the business world? Well, there was the banking sector, but it was reportedly under strong encouragement from the Treasury to engage in a round of corporate cheerleading after being spared higher levies. Nor should one get carried away by JP Morgan's coordinated announcement of a new 3bn office in Canary Wharf. Yes, the commitment shows some level of long-term confidence in the UK, but large international banks do not make property decisions on the basis of what they heard one afternoon.In the non-banking business world, the broad day-after reaction to the budget can be summarised as a resigned shrug coupled with amazement that the chancellor, Rachel Reeves, offered so few pro-growth measures even as the Office for Budget Responsibility set out two depressing forecasts. First, that the average growth rate for the economy from 2026 to 2029 will be only 1.5%, rather than the 1.8% expected in March. Second, real-terms annual growth in disposable incomes will be tiny. Continue reading...

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'

Cap on inheritance tax paid by their offshore trusts will only help those worth more than 83m, say expertsA tax break for rich former non-doms that slashes their potential inheritance tax bills was included in the small print of the budget.The benefit relates to how much tax this group faces having to pay on their global wealth held in trust. Continue reading...

Experts question whether back-loaded tax rises outlined in Wednesday's budget will really happen

Research group More in Common spoke to former blue wall' constituents unimpressed by chaotic' U-turnsIt's all sort of stacked against you ... The people that are working hard and earning a decent wage, trying to get childcare costs under control ... you sort of question why you're doing what you're doing," was how Hayley, an assistant headteacher in our focus group in Aldershot, described the economy, shortly after the budget was announced.Hayley's not alone: a record 57% of Britons now say they are unsure that the cost of living crisis will ever end. But what was so revealing about Wednesday's focus group was that they were all in what we would normally see as relatively high-paid jobs, they owned their own homes - not the type of voter you'd normally think of as struggling. As Martin, a product manager in the automotive industry, put it: On paper, we should be feeling really well off." Continue reading...

Move will have greater impact on living standards of taxpayers in bottom half of income scale, thinktanks say

As they struggle with the cost of living, people weigh up whether Rachel Reeves's measures will help them

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

Damaging events could knock finances off course, says Treasury's independent forecaster as it downgrades growth outlook

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

After a tumultuous run-up to a make-or-break moment for the government, has the chancellor struck the right balance? Continue reading...

Chancellor unveils action on energy bills, rail fares and two-child benefit cap as she reveals 26bn tax rises

Planning permission granted for Buckinghamshire project seen as test of Labour's drive for economic growth

OBR forecasts appear to show that chancellor has more than doubled her fiscal headroom to almost 22bn

Rachel Reeves is announcing her financial update - here are the main points, with political analysis

Chancellor to set out tax and spending plans shaped by weak productivity, high borrowing costs and cost of living crisis

Downing Street does not deny that justice secretary, David Lammy, is considering scrapping juries for most trialsJohn 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. Continue reading...

Chancellor says people must be properly rewarded for their hard work' with 16- to 21-year-olds also in line for raiseMillions of low-paid workers in the UK are to get a pay rise of 4.1% next year, as Rachel Reeves confirmed that minimum wage rates will go up as part of the government's ambition to improve living standards.The national living wage will rise from 12.21 to 12.71 an hour from April for over-21s, which the government said would increase the annual earnings of about 2.4 million workers by 900.A year in Westminster: John Crace, Marina Hyde and Pippa Crerar. On Tuesday 2 December, join Crace, Hyde and Crerar as they look back with special guests at another extraordinary year, live at the Barbican in London and livestreamed globally. Book tickets here Continue reading...

Kingfisher may be thriving, but its numbers mask a retail landscape that looks increasingly fragile as budget loomsJust what an embattled chancellor needs on the eve of a tax-raising budget: a leading retailer upping its profits forecast and singing about the joys of the UK economy.Unfortunately, only the first bit is true. Kingfisher, owner of B&Q and Screwfix (and similar businesses in France and Poland), raised its profit expectations for its current financial year from 480m-540m to 540m-570m. Continue reading...

Government sets out plans to lower the threshold within the Soft Drinks Industry Levy to 4.5g per 100ml, down from 5g

Here's what Rachel Reeves is tipped to announce after months of speculation

West Midlands police's assistant chief constable says threat of violence by Maccabi fans was more important considerationBadenoch says the government should be cutting regulation.And she claims she can do this because, when she was business secretary, she was able to cut regulation. As an example, she says she ruled about mandatory ethnicity pay reporting.Fewer and fewer people are working to support more and more people out of work and living on welfare. The rider is getting heavier than the horse. Continue reading...

Rolling coverage of the latest economic and financial news, as Novo Nordisk finds its semaglutide drug fails to help in Alzheimer's treatmentGerman business morale has unexpectedly fallen this month, as companies lose hope on a recovery of the German economy following two years of contraction.The Ifo institute has reported that its business climate index fell to 88.1 in November from 88.4 in October, weaker than expected. It's a blow to German chancellor Friedrich Merz's efforts to revive growth through a major spending package.Companies have little faith that a recovery is coming anytime soon."Like U2 sang almost 40 years ago: the German economy still hasn't found what it's looking for.The year 2025 has been another year of hope and disappointed optimism. A year which saw excitement and enthusiasm sparked by Germany's unprecedented fiscal policy U-turn and its decision to invest significantly in infrastructure and defence this spring. But also a year that brought a rude awakening and a cringing feeling as we watched the new government undermine the positive impact of fiscal stimulus with clumsy budgetary decisions, new political tensions, and a lack of structural reforms. Continue reading...

Budgets need to be reassuringly dull with no repeat of this year's long, drawn-out and chaotic buildupRachel Reeves should put us all out of our misery this Wednesday with a tax-and-spend statement bold enough to make future budgets boring again.Ask any economist or policy wonk and they'll tell you the buildup to this year's budget has been among the most drawn-out and chaotic they can remember. Continue reading...

Despite the US's economic success, income inequality remains breathtaking. But this is no glitch - it's the systemThe Chinese did rather well in the age of globalization. In 1990, 943 million people there lived on less than $3 a day measured in 2021 dollars - 83% of the population, according to the World Bank. By 2019, the number was brought down to zero. Unfortunately, the United States was not as successful. More than 4 million Americans - 1.25% of the population - must make ends meet with less than $3 a day, more than three times as many as 35 years ago.The data is not super consistent with the narrative of the US's inexorable success. Sure, American productivity has zoomed ahead of that of its European peers. Only a handful of countries manage to produce more stuff per hour of work. And artificial intelligence now promises to put the United States that much further ahead. Continue reading...

US officials to hold high-level talks in Brussels amid unhappiness in Washington at slow action on July dealThe EU and US are set to restart trade negotiations next week after a two-month pause to try to settle unresolved sticking points in their controversial tariff deal struck in July.The US commerce secretary, Howard Lutnick, and trade representative Jamieson Greer will hold high-level meetings in Brussels on Monday with ministers, EU commissioners and industry bosses. Continue reading...

From the outside, the run-up to Rachel Reeves's announcement has looked chaotic, and many see the future of the chancellor and PM in the balanceEvery budget could be described, to a greater or lesser extent, as a high-stakes moment. Things can easily go badly wrong, as Gordon Brown discovered when he abolished the 10p tax rate in 2007, or George Osborne when his 2012 omnishambles' budget fell apart over pasties, and especially Kwasi Kwarteng, whose disastrous mini-budget of 2022 sent the Conservatives spiralling towards electoral defeat.Rachel Reeves appears to have come perilously close to the turmoil of previous budgets, and that's before she has even delivered it. Continue reading...

Rolling coverage of the latest economic and financial newsShares are falling faster than wickets in Perth at the start of trading in London, as fears of an AI bubble rip through markets again.Following losses on Wall Street last night, the FTSE 100 share index has dropped by 104 points, or just over 1%, at the start of trading to 9423 points. That's a one-month low.it's been a truly remarkable 24 hours, with a sequence of moves that were almost impossible to predict....After the world's largest company reported spectacular results, the stock was up around +5% by 3pm London time. It closed down -3.15%. The broader market followed a similar pattern: the S&P 500 initially climbed +1.93%, only to fade and close down -1.56% as doubts about AI valuations crept back in. That marked the biggest intra-day swing for the S&P since the six days of extreme market turmoil that followed the Liberation Day tariffs in early April. Adding to the negative backdrop for crypto were lingering questions over the crypto market structure bill that's being worked on in Congress. Continue reading...

Bureau of Labor Statistics canceled release of October's consumer price index, citing the government shutdownThe US federal government will not publish official data on inflation for October, depriving policymakers at the Federal Reserve of key information as they consider whether to cut interest rates.The Bureau of Labor Statistics canceled the release of the closely watched consumer price index (CPI) for October, citing the government shutdown - the longest in history, before it ended earlier this month - and stating it could not retroactively collect" the data required for the report. Continue reading...