Reeves has mountain to climb in budget after borrowing rise
Rachel Reeves has already seen the most significant numbers setting the backdrop for next month’s budget – the Office for Budget Responsibility’s (OBR) forecasts for five years’ time, when her fiscal rules are judged.But September’s public finances data, published on Tuesday, will hardly have lightened the mood in No 11 as she draws up plans for tax rises and spending cuts.Even before the impact of the U-turns on winter fuel payments and disability benefits hits, the Office for National Statistics (ONS) found that the deficit in the first six months of the fiscal year was £7.2bn higher than the OBR predicted at its last forecast in March, at £99.8bn.
The size of the overshoot does seem to be narrowing, however, with September’s deficit only £100m adrift of the OBR’s expectations.Higher than expected inflation and wage growth should be helping to increase income tax receipts, as more workers are dragged into higher tax bands – though the flipside is higher than expected payments on inflation-linked government bonds.There was some moderately helpful news in the detail of the data, too.The ONS had already pointed out that an error in VAT estimates had put its estimates for the deficit off course by £2bn for the year so far.Because of this and a higher estimate for other tax receipts – only partly offset by higher than expected spending – it now believes public sector net borrowing was £4.
2bn lower than previously thought.Tthis first year of Labour’s own spending plans, set out at the chancellor’s first budget, was always meant to be a generous one – she promised a significant uplift in spending on crumbling public services.However, while there were no shocks in this latest snapshot, it does show the mountain Reeves has to climb, to meet her first fiscal rule of balancing day-to-day spending with tax receipts at the end of the forecast period.The ONS said that the current budget deficit – the key measure for this rule – was running at £71.8bn for the year so far – £10.
6bn, or 17,2% more than in the equivalent six-month period last year,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 promotionPublic sector net borrowing, excluding public sector banks, was £20,2bn in September alone – £1,6bn more than the same month in 2024, and the highest September borrowing since the pandemic.
The consolidation in the public finances was always meant to come later in the parliament, according to Reeves’s plans set out at last year’s budget,The Treasury was keen to point out the International Monetary Fund’s verdict that the UK is planning the largest primary deficit reduction in either the G7 or the G20 over the next five years,But that leaves all the hard work yet to come, and the politics of either hefty tax increases, or reining in the growth rate of spending in cash-starved Whitehall departments, will be hard to make stick, for an already unpopular government,
I can’t stop watching videos of people discovering Beds Are Burning by Midnight Oil. Send help
Oh the pleasant pain of waiting impatiently for someone to understand the point! Oh the power of dramatic irony; the smug joy of knowing something they don’t.Oh how I wallowed in these feelings and more, when YouTube sucked me into a genre I had previously known nothing about: First Time Hearing videos, where people film themselves watching the music video of a song they’ve never heard before and grace viewers with their impromptu reactions, thoughts and facial expressions.Even before noticing the six-figures-plus viewing counts and the apparently endless number of people vying to deliver more, I instantly clocked all the trappings of the very best attention economy traps. You know: the immediate, certain knowledge that – despite your best intentions, growing hunger, thirst and backpain; despite the increasingly urgent pleas of your neglected children – you’re just going to slump there swiping your finger for hours until your higher brain finally kicks in.The first one my algorithm mugged me with was from US rapper Black Pegasus, who told us he was listening for the first time to Tim Minchin’s song Prejudice
‘London could 100% compete with Cannes’: Aids charity UK gala debut honours Tracey Emin
It’s recognised for its pomp, the celebrity supporters and the fabulously glamorous locations, but for the man behind the amfAR gala, an A-list charity roadshow that rolled into London for the first time this weekend, the event is deeply personal.AmfAR – the American Foundation for Aids Research – is a nonprofit group that emerged in the 1980s to support research into HIV and Aids.“I’m an HIV-positive man. I’m lucky to be alive because of organisations like amfAR,” the foundation’s incoming CEO, Kyle Clifford, said.“I had an Aids diagnosis, and nobody in my life knew that until recently, including my family
Champagne, celebs and artefacts: British Museum hosts first lavish ‘pink ball’ fundraiser
There will be champagne, of course, and dancing, fine Indian food served alongside the Parthenon marbles and cocktails mixed in front of the Renaissance treasures of the Waddesdon bequest. And everywhere – from the lights illuminating the Greek revival architecture, to the carpet on which guests arrive, to the glamorous outfits they are requested to wear – a very particular shade of pink.When the British Museum throws open its doors on Saturday evening for its first “pink ball”, it will not only be hosting an enormous and lavish party, but also inaugurating what its director, Nicholas Cullinan, has called a “flagship national event” that he hopes will become as important to his institution’s finances as it will to the London elite’s social calendar.Eight hundred invited guests have each paid £2,000 to party alongside some of the world’s most sensational artefacts and a roll call of bigwigs from the worlds of fashion, art and culture: Naomi Campbell and Alexa Chung, Miuccia Prada and Manolo Blahnik, Sir Steve McQueen and Sir Grayson Perry and Dame Kristin Scott Thomas.As well as glitz, however, there will be brass
My cultural awakening: ‘The Specials helped me to stop fixating on death’
My anxious disposition means I think about death a lot. But a cluster of people I loved dying in 2023, and most of them unexpectedly and within a few months of each other, was enough to shake my nervous system up pretty significantly. Five funerals is too many. The first was my nan: she was the family matriarch. The oldest person in the family, so there was a level of acceptance among the sadness
From After the Hunt to the Last Dinner Party: your complete entertainment guide to the week ahead
After the HuntOut nowJulia Roberts stars in the latest from Challengers director Luca Guadagnino: a cancel-culture thriller set in the aftermath of an accusation of sexual assault on a college campus. She plays a philosophy professor at Yale, whose colleague Hank (Andrew Garfield) claims he is innocent of the charges against him.FrankensteinOut nowYears in the making, decades in the dreaming, Guillermo del Toro’s splendidly visceral take on one of literature’s true greats, starring Oscar Isaac as the eponymous scientist and an unrecognisable Jacob Elordi, asthe Creature, is long and messy and brilliant. It deserves to be seen on the big screen (though a Netflix release is following hot on the heels of this cinema release if you do miss it).SunlightOut nowComedian Nina Conti makes her directing debut with a deliciously dark road trip comedy that isn’t for the faint of heart
The Guide #213: Should we mourn the demise of TV channels?
For seasoned tea-leaf readers of the future of TV in the UK, two stories will have stood out this week, swirling around at the bottom of their cups. There was the news that MTV is shutting down its music channels – sad for those of us who misspent their youth watching them, though hardly surprising either, given MTV’s decades-long shift away from music and towards rolling repeats of Teen Mom and shows about tattooists. And there was a media piece in the Guardian about the demise of British TV’s once-gold plated 9pm slot, which for the first time last month failed to achieve a rating of 1m or more among any of the major broadcasters.That second story was a little surprising. Overnight viewing figures are in constant decline in the streaming age, but even by those standards, not one solitary rating over 1m is eye-catching
Water firms in England could face harsher sewage fines under new Environment Agency powers
Gold on track for biggest one-day fall since 2020; BoE governor warns over private credit risks - as it happened
ChatGPT Atlas: OpenAI launches web browser centered around its chatbot
‘Significant exposure’: Amazon Web Services outage exposed UK state’s £1.7bn reliance on tech giant
Jets owner outlines hopes for team: ‘If we can complete a pass, it would look good’
Amy Jones and England cannot avoid Ashes’ shadow over Australia rematch