Rachel Reeves to try to reassure City investors after unexpected UK GDP fall
Rachel Reeves will attempt to shrug off the UK’s anaemic economic performance at her Mansion House speech next week, after the latest official figures showed the economy unexpectedly shrank in May.The chancellor is expected to say the City is at the heart of her vision for sparking economic growth, as she battles to seize back the narrative after worse than expected GDP figures, and a bleak warning from the Office for Budget Responsibility (OBR) about the state of the public finances.The economy shrank by 0.1% in May, the Office for National Statistics said, fuelled by sharp declines in manufacturing and construction.It was the second month of contraction in a row after a 0.
3% drop in GDP in April, and amplified speculation that taxes would have to go up again in the autumn budget.But less than a fortnight after bond markets sold off government debt amid a flurry of speculation about her future, Reeves will claim Labour is creating an economy, “where people and businesses look to the future and talk about hope, about opportunity”.She will tell City investors at the historic Guildhall on Tuesday that workers and businesses can be “assured of their own capability, and of the ability of our country to boldly face the challenges that lie ahead.And certain of the prize if they succeed, of higher wages and higher living standards.”Business groups have blamed Reeves’s £25bn increase in employer national insurance contributions, which came into force in April, for weighing on growth, at the same time as Donald Trump’s trade war sapped confidence.
But she is expected to stress in the speech Labour’s determination to deliver security, pointing to the importance of the government’s plans for public investment, as well as recent trade deals with India and the US.The GDP figures showed that declines in construction, oil and gas extraction, car manufacturing and the production of pharmaceuticals outweighed a return to growth in Britain’s dominant service sector, amid a slump in activity after a strong first quarter.“These downbeat figures undoubtedly increase anxiety over the health of the UK economy, with tumbling construction and manufacturing activity causing a disheartening decline in overall output,” said Suren Thiru, the economics director at the Institute of Chartered Accountants in England and Wales.The data came as Labour’s growth plans are under the microscope amid mounting speculation over the need for large tax rises at the autumn budget after Keir Starmer’s high-stakes welfare U-turn this month.Ministers have warned of “financial consequences” after the government backtracked on changes to disability benefits that would have been worth more than £5bn in savings for the Treasury.
That adds to the £1.25bn the Treasury needs to find to cover May’s climbdown on winter fuel payments.Mel Stride, the shadow chancellor, said Labour’s U-turns had “created a ticking tax timebomb” for the economy.“Thanks to Labour’s reckless choices the economy actually shrank in May.This will pile even further pressure for tax rises in the autumn.
”Ben Jones, the lead economist at the Confederation of British Industry, said: “With growing fiscal challenges and the autumn budget on the horizon, the chancellor must provide clear reassurance – no new taxes on business and instead offer a commitment to work alongside firms to dismantle barriers to growth.”Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionHowever, economists said the slump in April and May did not paint an entirely accurate picture because it reflected businesses shifting activity around government tax changes and Trump’s tariff deadlines.Britain’s economy had grown rapidly in the first quarter of 2025, outstripping other countries in the G7 with an expansion of 0.7%.However, much of that was driven by exporters scrambling to beat the US president’s 2 April “liberation day” tariff announcement.
Manufacturing output had risen sharply in the first three months of the year amid an increase in exports,The property sector had also boomed before the expiry of a temporary cut in stamp duty in England and Northern Ireland, leading to a slump in activity in April and May,However, activity is expected to remain subdued over the rest of the year amid heightened uncertainty, elevated borrowing costs and fragile business and consumer confidence,The OBR has forecast GDP growth of 1% for 2025 as a whole but will revisit that projection in the run-up to the autumn budget,While the UK has struck a deal with the US to mitigate Trump’s steepest tariffs, alongside forging closer ties with the EU, the Bank of England governor, Andrew Bailey, has warned that trade policy uncertainty still clouds the outlook.
Economists widely expect the Bank’s monetary policy committee to cut interest rates from the current level of 4.25% at its next meeting in August, amid mounting concerns over the strength of the economy despite lingering inflationary pressures.Sanjay Raja, the chief UK economist at Deutsche Bank, said: “For now, weakness in GDP will cement some on the MPC’s fears that demand is loosening faster than expected.An August rate cut looks almost certain.And we expect more to come.
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Rachel Roddy’s recipe for roast summer vegetable, herb and pearl barley salad | A kitchen in Rome
It is the time of year when the fruit syrups get moved to a more accessible shelf at our local supermarket. They have a range of eight to 10 flavours, but the two that dominate are mint and orzata, luminous green and cloudy white syrups respectively, that need diluting with fizzy water and maybe topping up with ice. I have mentioned orzata here before, how popular it is in Italy and how the name means a drink made from orzo (barley), and also how at some point the barley was replaced by almonds; then, at another point, the almonds were replaced by deacidified benzoin, which is a balsamic resin obtained from trees of the genus Styrax from south-east Asia. Deacidified benzoin is actually delicious and I become dependent on orzata at this time of year, and the sound of the ice clanking against the side of the glass as I walk my cold, cloudy drink back to my hot desk is the sound of summer.However, I have always wondered what orzata made with orzo is like
Australian supermarket chicken nuggets taste test: from ‘mushy’ to ‘super good’
Sarah Ayoub wrangles 10 kids under 10, plus older siblings and their parents, to find chicken nuggets with the best crispiness, even texture and taste of real chickenGet our weekend culture and lifestyle emailIf you value our independent journalism, we hope you’ll consider supporting us todayWhat makes a good chicken nugget? Ahead of this taste test, I put a call-out on Instagram asking this question. Dozens of messages essentially said the same thing: real chicken flavour, evenly textured meat and a crisp exterior.Though a handful suggested I make my own, most understood the assignment: the appeal of a chicken nugget lies not in Nara Smith-ing it but in its convenience, especially during school holiday chaos. To that end, on the first day of winter break, I rounded up good friends, compliant siblings (including a 34-year-old nugget connoisseur-sister who still orders kids’ meals) and their respective children to rate frozen supermarket offerings for their overall appeal, texture and flavour.Nuggets were cooked in an oven according to their packet instructions, but the consensus was that almost all the nuggets needed longer cook times
How to turn broad bean pods into a refreshing summer soup – recipe | Waste not
Broad bean pods are one of the most under-appreciated edible scraps, and I can’t believe I haven’t written about them here since way back in 2018, when I deep-fried them in spices. They’re wonderfully fragrant, and yield the essence of the broad bean’s familiar flavour without having to use the bean itself.This vibrant green soup is a quick, thrifty and deeply nourishing way to use an otherwise unwanted and unused ingredient. The pods offer a surprising depth of flavour, meaning you can reserve the beans themselves for another meal. You can also use finely minced broad bean pods in stews, risottos and sauces, both for a hidden boost of fibre and for that beloved and familiar green flavour
Yasmin Khan’s recipes for aubergine kuku and fruit and nut granola bars
I am obsessed with these sweet treats: soft, sticky, packed with dried fruit, nuts and seeds, and sweetened with banana and honey, these irresistible granola bars are perfect for when you’re craving something sweet but still want something relatively healthy; they also work well as a light breakfast with a mug of hot tea or coffee. Kuku, meanwhile, is one of the bedrocks of Iranian cuisine, and is the Persian word for these dense, filled frittatas that are often served as a sandwich filling with sliced tomato and crunchy, salty pickles.These keep in an airtight container for about three days, and tend to go softer and chewier after 24 hours, so they are great for making ahead. I use a 16cm-square baking tin.Prep 5 min Cook 45 min Makes 6-8 bars175g jumbo rolled oats 125g dried apricots, roughly chopped50g pistachios1 tbsp pumpkin seeds 1 tbsp sunflower seeds 1 tbsp sesame seeds 1 tbsp milled flax seeds 1 tsp ground cinnamon Salt 75g coconut oil, or butter65g soft dark brown sugar60g tahini3 tbsp honey, or maple syrup 1 ripe banana, peeled and mashed1 tsp vanilla extractHeat the oven to 180C (160C fan)/350F/gas 4, and line a small baking tin with greaseproof paper
RecipeTin Eats cook upset her beef wellington recipe ‘entangled’ in Erin Patterson murder case
Nagi Maehashi, the cook behind RecipeTin Eats, says it is “upsetting” to have become “entangled in a tragic situation” after Erin Patterson told her triple murder trial she used the beef wellington recipe for the fateful lunch.In a post to Instagram on Tuesday, Maehashi requested that journalists of Australia “please stop calling and emailing and texting and DM’ing me about the Erin Patterson case”.“It is of course upsetting to learn that one of my recipes – possibly the one I’ve spent more hours perfecting than any other – something I created to bring joy and happiness, is entangled in a tragic situation,” she wrote on Instagram yesterday.“Other than that, I have nothing to say and I won’t be talking to anyone.“Thank you for respecting my privacy
How to make the best veggie burgers | Kitchen aide
My veggie burgers are so often underwhelming, or they simply fall apart. Where am I going wrong?Beth, Newark“Veggie burgers are often lacking in everything that’s good about food,” says Melissa Hemsley, author of Real Healthy, and for her, that means texture, flavour and satisfaction. “They also tend not to have those key flavour highs – the fat, the salt – that you’re after from a homemade version.”For Lukas Volger, author of Veggie Burgers Every Which Way, texture is by far the complaint he hears most often: “The patty is too moist, and glops out of the other side of the bun when you bite into it.” Veggie burgers often behave like this, Volger says, because vegetables contain water, so you’ll either need to cook the veg in advance or add something to the mix to soak it up, whether that’s breadcrumbs or grains
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