Kate Andrews

We won’t have to speculate about the details of the Labour’s first Budget much longer. But one tradition as old as time has been confirmed by the Treasury: the National Health Service is getting more cash. ‘Our NHS is the lifeblood of Britain,’ the Chancellor Rachel Reeves has said ahead of unveiling her full Budget tomorrow. ‘That’s why I am putting an end to the neglect and underinvestment it has seen for over a decade now.’ This is set to include £1.57 billion of capital spending to expand surgical hubs and provide more equipment. An additional £1.8 billion worth of funding will also be announced to help Labour make good on its promise to expand appointment access by 40,000 per week – and to get the 7.

Are the details of the alleged £22 billion fiscal black hole about to be revealed? In addition to providing assessments and forecasts for the UK economy alongside the Chancellor’s Budget on Wednesday, the Office for Budget Responsibility is also set to publish its ‘review’ into Rachel Reeves' claim that the Tories covered up a multi-billion pound black hole in the public finances – one that she was only able to unearth after she entered the Treasury. Since Reeves first made the accusation in July, there has been lots of speculation about how the figure was compiled – and exactly where the money went. The Treasury has not released a breakdown of the figure and has declined freedom of information requests to publish the details.

Does Labour regret its decision to redefine the meaning of a ‘working person’? The original understanding of the term seemed to be working just fine, until ministers decided to make it the metric for who would and would not be subject to tax rises. Now the party finds itself in the strangest of situations: having to talk down British entrepreneurs and employers, all for the sake of muddling through a painful Budget next week. It was just a few weeks ago that Labour was hosting its highly anticipated investment summit, trying to attract new business, and funding, to the UK.

When Rachel Reeves’s ambition was to find £22 billion, it was already clear that she would need to find more revenue than what was expected to come from the relatively small take hikes the party announced it would pull pre-election. When that number was upgraded to £40 billion, there was no denying that a big tax hike was coming, the kind that tends to come from the major revenue raisers: income tax, National Insurance, or VAT. Despite being a stealth tax, will it go unnoticed? Of course Labour ruled out hikes to these three taxes with its tax ‘triple lock’ in the election manifesto. So the party has had to get crafty.

Inflation slowed to 1.7 per cent in the twelve months to September, taking the inflation rate to its lowest levels since spring 2021. While markets and forecasters had expected the inflation rate to drop below the Bank of England’s 2 per cent target at some point this year (market consensus for September was 1.9 per cent), the bigger-than-expected fall has come as a surprise, as core inflation also slowed to 3.2 per cent in the 12 months to September – down from 3.6 per cent in August. The largest contributions to the slowdown came from falling transport costs, while overall services fell to 4.9 per cent on the year, down from 5.6 per cent in August.

Is Ozempic the miracle fix for Britain’s labour market woes? This morning Health Secretary Wes Streeting has announced a £280 million investment into the UK from US pharmaceutical giant Lilly, which will include the first ‘real-world trial’ to give weight-loss jabs to people out of work. The news coincides with the publication of the latest labour market overview by the Office for National Statistics, showing the number of people out of work due to long-term sickness is still at a near-record high: 2.75 million in the three months to August. As Streeting highlights in the Daily Telegraph today, obesity is creating both a strain on the health service and on the economy.

Despite getting off to a rocky start – including nearly losing £1 billion worth of investment – Labour’s much-anticipated Investment Summit seems to be delivering exactly what ministers had hoped for. The good news, including a combined investment of £6.3 billion from four US technology firms to expand data-centre infrastructure in Britain – is rolling in. The biggest question for plenty of businesses at today’s Summit will be about tax Business is struck, perhaps awestruck, by Labour’s commitment to slash red tape. During a panel event with the Prime Minister and ex-Google CEO Eric Schmidt, the tech guru expressed how ‘shocked’ he was to learn that Labour was now ‘strongly in favour of growth’.

Happy Friday: the economy is growing. After two consecutive months of no growth, GDP picked up in August, rising by 0.2 per cent. Production and construction output finally turned around, growing 0.5 per cent and 0.4 per cent respectively, after contracting in July by 0.7 per cent and 0.4 per cent. Services output grew by 0.1 per cent, with the biggest contributions in the three months to August coming from professional, scientific and technical activities and from information and communication sectors.  Despite growth forecasts being revised upwards throughout the year, the news today is welcome relief for those who started to fear that growth in the UK had flatlined. Still, markets are predicting a slower growth rate in the second half of 2024.

At Prime Minister’s Questions this afternoon, Rishi Sunak took a technical turn. Why is Rachel Reeves considering changing the fiscal rules, he asked the Prime Minister, when just last year she said doing so would be ‘tantamount to fiddling the figures.’ No clear answer followed.  The wisdom during the general election was that borrowing more money – to finance Labour or Tory spending promises – was simply not an option. No one dared to propose anything resembling Liz Truss’s mini-budget saga, which saw her attempt to borrow £100 billion to limit energy price rises for consumers.