Chancellor Rachel Reeves has announced that the first Budget under the new Labour government will take place on 30^th October this year. In a statement to the House of Commons yesterday, Reeves also announced £5.5bn in cuts this year to address a £22bn overspend on the departmental spending laid out by former Chancellor Jeremy Hunt in his Spring Budget. The “inheritance from the previous government is unforgivable,” she claimed in her speech, adding: “They spent like there’s no tomorrow because they knew someone else would pick up the bill”.  “Some, including the Leader of the Opposition and Shadow Chancellor have claimed the books were open. How dare they. There are very clear instances of specific budgets that were overspent and unfunded promises that were made that the OBR was not aware of for their March forecast”. The £22bn figure includes a £6.4bn shortfall in funding for asylum seekers, £2.9bn in support for railways during the pandemic, and military support for Ukraine totalling £1.7bn, and the 5.5% pay rise Reeves wants to give to public sector workers, which will cost £9.4bn. The £5.5bn in savings this year - rising to £8.2bn next year – include means testing on winter fuel payments to save £1.4bn this year, that will see support stripped from 6.9m households. Additionally, Reeves is making cuts to departmental budgets of £3.1bn over the next two years, including a 2% cut to administration budgets and cuts to spending on consultants and communications. She is also scrapping the Rwanda deportation scheme and plans for a social care cap which would have seen no one in England having to send more than £86,000 on personal care over their lifetime. A planned two-mile tunnel for the A303 under Stonehenge and work on the A27, including a Chichester bypass, have also been scrapped, and old rail lines that were to have been reopened will now not be. She will also not carry over Rishi Sunak’s plan for the Advanced British Standard, a replacement for A-levels, or the freeports-focused Investment Opportunity Fund, making a saving of just over £200. “These are not the decisions I wanted to make. But they are the right decisions in difficult circumstances,” she told the House.

Jeremy Hunt has not taken kindly to claims he covered up the true state of the public finances when he was Chancellor. He has written to Cabinet Secretary Simon Case to complain about what he sees as conflicting claims made by officials about the "black hole" which risked "bringing the civil service into disrepute". Meanwhile, his spending forecasts are to be investigated by the Office for Budget Responsibility (OBR).  Richard Hughes, who heads up the spending watchdog, said in a letter to the House of Commons Treasury Select Committee that if correct, the black hole in public finances “would constitute one of the largest year-ahead overspends against Departmental Expenditure Limits (DEL) forecasts outside of the pandemic years”. “The review will assess the adequacy of the information and assurances provided to the OBR by the Treasury regarding departmental spending,” he explained. It is the first time the OBR has introduced such a review.

Junior doctors in England meanwhile, have been offered a 22% per cent pay rise over two years to end their long-running pay dispute with the Government. The British Medical Association’s (BMA) junior doctors committee has said it will put to its members the offer, which is understood to include a backdated pay rise of 4.05% for 2023/24, on top of an existing increase of between 8.8% and 10.3%. A further 6% for 2024/25 will be topped up with a consolidated £1,000 payment, which is equivalent to a rise of between 7-9%, bringing the total package to around 22%. Chancellor Rachel Reeves said industrial action in the NHS had cost taxpayers £1.7bn last year. "Today marks the start of a new relationship between the government and staff working in the NHS," she said. "The whole country will welcome that”.

Trade Secretary Jonathan Reynolds said yesterday that he wants to push ahead with fresh trade talks focusing on six Gulf states and India, as well Israel, South Korea, Switzerland and Turkey. His teams would be entering negotiating rooms “as soon as possible,” he said. There was no mention of the US in the list.

Jonathan Reynolds also said he has held “constructive” talks with Czech billionaire Daniel Kretinsky in relation to his proposed £3.6bn takeover of Royal Mail parent company International Distribution Services.  According to Sky News, Kretinsky has met with Reynolds since the General Election. The broadcaster quoted sources who labelled their meeting "cordial and constructive".

Scaling back HS2 cost the taxpayer more than £2bn, new documents have shown. The Telegraph reports that Rishi Sunak’s decision to cancel “phase two” of the project between Birmingham and Manchester included a £1.1bn write-down for work already carried out on the northern leg, as well as an additional £1bn in accountancy charges. A further £153m was also lost owing to design work for a 10-platform station at London Euston, as plans were downgraded to a 6-platform terminus. £95m of remediation work was also set aside for safeguarding building sites that are no longer required, taking the total forfeited to £2.17bn. At the time Sunak made the decision, the total costs associated with HS2 had reached more than £70bn. The Telegraph has also revealed that HS2 continued buying houses on the northern leg even after the project was axed.

Shop price inflation rose 0.2% in July, year-on-year, the British Retail Consortium said this morning. Food prices rose by 2.3%, the smallest increase since December 2021, while non-food prices dropped by 0.9%. Clothing and footwear prices fell for the seventh consecutive month in July as weak demand persisted due to poor weather, it is thought.

Bank of England data released yesterday showed the number of mortgage approvals remained pretty much unchanged last month at just under 60,000. Approvals for remortgaging in June dipped to 27,500 from 29,300 in May.

The Financial Conduct Authority (FCA) says it has extended a deadline for companies providing motor finance to respond to its current review into historical motor finance commission arrangements and sales, and that it is considering a compensation scheme for drivers who paid hefty commission payments to brokers. “It is too early to say if we will intervene in this way, but based on our work so far, it is more likely than when we started our review,” the FCA said.

Reckitt Benckiser’s share price has dropped to a 10-year low after a US court ruled that a baby milk formula produced by rival Abbott Laboratories had caused a baby girl to develop necrotising enterocolitis (NEC), a dangerous bowel condition. The FTSE 100 British consumer goods group is facing similar legal action over its Enfamil formula. Yesterday, Reckitt’s shares dropped 9% to roughly £40.75 each, although they have recovered some ground to £41.85 this morning. Abbott was ordered to pay $495m (£385m) in damages by a court in Missouri on Friday. Abbott intends to appeal the ruling, which is just the latest in a series against both Abbott and Reckitt over alleged health effects caused by their premature baby formulas. In March, Reckitt was ordered to pay $60m in damages to a mother who claimed that Enfamil, produced by Reckitt company Mead Johnson, had led to the death of her baby.

Tim Martin, the founder and chairman of JD Wetherspoon, sold just over 1.36m shares in the pub chain last week, it has emerged. The sale of the shares at just over 739p each will have meant a gross income for Martin of around £10m. The sale has diminished Martin's stake in the company to 24.58%.

Diageo has reported a 4.8% drop in full-year profit to $304m almost all of which was down to weaker performance in Latin America and the Caribbean, the FTSE 100-listed drinks giant said. Net sales declined 1.4% to $20.3bn, also owing to an unfavourable foreign exchange impact and inflation. Outside of Latin America and the Caribbean, sales rose overall 1.8% to $330m, driven by "resilient" growth in its Africa, Asia Pacific and Europe regions, which easily offset a 2.5% sales dip in North America following a “cautious consumer environment”.  

Air New Zealand has abandoned a 2030 goal to cut its carbon emissions, the first major carrier to do so, blaming difficulties securing more efficient planes and sustainable jet fuel. However, the BBC reports the airline is working on a new short-term target and that it remains committed to an industry-wide goal of achieving net zero emissions by 2050. "In recent months, and more so in the last few weeks, it has also become apparent that potential delays to our fleet renewal plan pose an additional risk to the target's achievability," Air New Zealand Chief Executive Officer, Greg Foran, said in a statement. "The price of [SAF] is more expensive than traditional fuels, and there is not enough capacity to produce that at scale," Ellis Taylor from aviation analytics firm Cirium told the broadcaster, adding that “delays in new aircraft deliveries are affecting airlines around the world, with both Boeing and Airbus under-delivering new jets over the last few years, largely due to snags in the wider supply chains of the manufacturers".

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