FirstFT: Rachel Reeves’s plan to plug £22bn fiscal gap

Good morning. We begin as we speak with information about the UK chancellor’s plans to plug a £22bn gap within the UK’s public funds. Rachel Reeves yesterday set out a collection of “incredibly tough choices” as she paved the best way for Price range tax rises within the autumn.

Reeves introduced emergency financial savings, together with a £1.5bn reduce to winter gas funds for better-off pensioners, the axing of highway and hospital schemes and the dropping of plans to cap social care prices.

However she mentioned this may not be sufficient, confirming {that a} Price range on October 30 could be painful. A multiyear public spending evaluation would happen on the identical time, she added.

“There will be difficult decisions around spending, around welfare and around taxes,” Reeves mentioned, whereas insisting that “working people” could be spared will increase in revenue tax, worth added tax and nationwide insurance coverage.

Though Reeves blamed the Tories for the fiscal “mess”, her help for above-inflation public sector wage rises — together with a 22 per cent two-year pay provide to putting junior medical doctors in England — added gas to budgetary pressures.

Shadow chancellor Jeremy Hunt dismissed the declare as a “sham” designed to melt up the British public for tax rises within the autumn Price range. He mentioned Reeves had had entry to the books earlier than the election. Learn the total story.

For extra, join Inside Politics, Stephen Bush’s complete and witty information to UK politics and coverage.

Right here’s what else I’m holding tabs on as we speak:

• Financial knowledge: Germany studies preliminary July inflation knowledge, whereas the EU, France, Germany, Hungary and Mexico publish preliminary second-quarter GDP figures.

• EU-Vietnam: EU international affairs chief Josep Borrell meets Vietnamese officers in Hanoi to debate international affairs, safety and local weather coverage.

• Outcomes: Airbus, BP, Diageo, Foxtons, Glencore, L’Oréal, Microsoft and Nomura report.

5 extra prime tales

1. Unique: Hungary’s latest resolution to ease visa restrictions for Russian guests is an open door to spies and EU leaders ought to take pressing countermeasures, the bloc’s largest political get together has mentioned. In a letter seen by the Monetary Occasions, Manfred Weber, chair of the European Folks’s get together, mentioned the transfer raised “serious national security concerns”.

2. Donald Trump promised 1000’s of bitcoin followers on the weekend that he would make the US “the bitcoin superpower of the world” as he sought to deepen his ties to an trade fed up with its perceived persecution by the hands of the Biden administration. The feedback mark an about-turn for Trump who as soon as derided bitcoin as a “scam”.

• The Fed’s Trump dilemma: The US central financial institution is not going to need to look as whether it is prejudging insurance policies as inflationary throughout election season, writes Krishna Guha, a former member of the administration committee of the New York Fed.

For extra, join the US Election Countdown publication, the FT’s important information to the twists and turns of the 2024 presidential election.

3. Grant Thornton is main a cost by mid-sized US accounting corporations to rethink their world operations in ways in which might radically alter the trade beneath the dominant Huge 4. The corporations are racing to fulfill the wants of more and more multinational shoppers whereas in search of to make higher use of their world networks to unfold the price of expertise and employees.

4. A bunch of bondholders in Intrum, Europe’s largest debt collector, is making ready to attempt to block an important restructuring of its personal €5.4bn borrowings after going through the specter of a writedown on their holdings. The aggrieved bondholders mentioned the deal “did not respect temporal priority”. Daniel Thomas has extra.

5. Amazon’s Prime Video is undercutting rival Netflix on promoting pricing because it battles for entrepreneurs’ consideration in an more and more crowded area of ad-funded streaming companies. A number of executives at rival companies, in addition to promoting bosses, mentioned Amazon was pricing its spots extra cheaply than Netflix, though at a better charge than others comparable to Disney. Learn extra in regards to the more and more aggressive marketplace for streaming adverts.

The Huge Learn

The present US administration has depended closely on Mexican President Andrés Manuel López Obrador’s assist with stemming migration, a difficulty on which Republicans have continuously attacked Joe Biden. López Obrador has in flip maximised his leverage over the Democratic administration to push by leftwing nationalist reforms that opponents say have weakened democracy in Mexico. Will the tacit cut price survive after their respective phrases finish?

We’re additionally studying . . . 

• ‘Super shoes’: To grasp what makes sure sneakers so quick, the FT labored with specialists to dissect the expertise behind record-breaking footwear.

• AI battle traces: The worldwide chip warfare might flip right into a cloud warfare as governments see synthetic intelligence-capable knowledge centres as a strategic useful resource, writes financial historian Chris Miller.

• Paris Olympics: Star gymnast Simone Biles has billed her efficiency on the Video games as her “redemption tour” three years after her shock withdrawal from most of her occasions in Tokyo.

Chart of the day

With beginning charges falling, lecturers and charities within the UK are calling for a nationwide coverage for offering fertility remedy throughout the NHS. A rising variety of girls are in search of non-public IVF remedies in England, with solely 24 per cent of IVF cycles funded by the NHS in 2022, in contrast with 32 per cent in 2019, in keeping with an impartial regulator.

Take a break from the information

Considerations about not simply water and power consumption but in addition context have prompted a rethink of the swimming pool. The glinting azure rectangles of David Hockney are ceding to extra natural designs: plant-fringed edges, silvery decking and lake-green linings melting into their settings, creating the rewilded pool.

Further contributions from Benjamin Wilhelm and Jonathan Moules