In another setback for Rachel Reeves, UK Government borrowing soared above forecasts last month as public sector spending rose, putting pressure ahead of the spring statement next week.
The Office for National Statistics (ONS) said public sector net borrowing was £10.7 billion in February.
This was £100 million more than the same month last year and the fourth-highest February on record.
The UK’s official economic growth forecast for the year is also reportedly set to halve in a blow for a Labour government that has pledged to prioritise growth.
The expected growth rate for the 2025 financial year, from April to March 2026, will be downgraded by the Office for Budget Responsibility (OBR) next week, The Telegraph reported, reducing from 2 per cent to around 1 per cent.
In her spring statement next week, Rachel Reeves is expected to try blaming the drop on worsening global economics amid Donald Trump’s tariffs.
The chancellor is also set to announce the biggest cuts since the George Osborne era on Wednesday, forcing Labour to reject claims the government is returning to a policy of austerity, days after the party slashed the welfare bill by around £5 billion.
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Key Points
- Fresh blow for Reeves as UK's official economic growth forecast 'set to be halved'
- Labour denies returning to era of austerity
- Bank of England holds interest rates amid concerns over inflation and Trump tariffs
- Bank of England governor says UK is facing 'a lot of economic uncertainty'
- Badenoch offers pessimistic vision for upcoming local elections
- Rachel Reeves 'to announce biggest spending cuts since austerity' in spring statement
'Another major blow' to Reeves as borrowing figures increase
08:56
,
Holly Evans
The latest borrowing figures are “yet another major blow to the Chancellor’s faltering plan for growth”, the Liberal Democrats said.
Lib Dem Treasury spokeswoman Daisy Cooper said: “Today’s concerning figures are yet another major blow to the Chancellor’s faltering plan for growth and show her approach is simply not working.
“The Chancellor has failed to turn the page of the years of Conservative economic vandalism. Instead, Reeves’s jobs tax will hammer small businesses, painting herself into a corner on her own fiscal rules.
“The only way to rebuild our public services is through meaningful growth, but unless the Chancellor sees sense and scraps her jobs tax at the spring statement hardworking families and small businesses will continue to pay the price.”
UK Government borrowing overshoots forecasts ahead of spring statement
08:38
,
Holly Evans
UK Government borrowing soared above forecasts last month as public sector spending rose, putting pressure on Chancellor Rachel Reeves ahead of her spring statement.
The Office for National Statistics (ONS) said public sector net borrowing was £10.7 billion in February.
This was £100 million more than the same month last year and the fourth-highest February on record.
It was also £4.2 billion more than had been forecast by the Government’s official forecaster, the Office for Budget Responsibility (OBR), and more than some economists had been expecting.
The borrowing figure refers to the difference between what the Government spends on the public sector and what it receives in income from tax and other receipts.
Overall central government spending totalled £93 billion in February, £3.8 billion more than the same month last year, when the Conservative government was in power.
What Labour’s crackdown on government credit cards reveals about its approach to public spending
07:00
,
Holly Evans
The dour Scotsman holding the title of chancellor of the Duchy of Lancaster and Cabinet Office minister, Pat McFadden, doesn’t seem much of a space cowboy but he has in common with Elon Musk an apparent zeal to eliminate waste.
Being more sensible and considerably less excitable than his (rough) US counterpart, McFadden has not yet egregiously breached the British constitution but he has summarily abolished almost all of the civil service “credit cards”, a distinctly Doge-like action. It’s more than just a symbolic move…
What’s the problem?
Read the full analysis here:
Labour’s welfare ‘reforms’ are nothing of the sort – and they don’t go anywhere near far enough
06:01
,
Holly Evans
When I resigned from David Cameron’s government as the secretary of state for work and pensions in 2016, welfare stood at £61.6bn. By the end of this parliament, it is projected to be £108.7bn. Sickness benefit alone, which was £19bn back then, is set to rise to £32bn.
So it is with disability benefit, which is set to rise from £11bn to some £31bn. To govern is to choose. Against the backdrop of an increasingly unsafe world, the need to invest significantly more in defence, and a flatlining economy, further reform of welfare is a necessity.
The pandemic response has hit the welfare budget hard. The rise in sickness benefit claims poses a challenge to the government, particularly because some 60 per cent of claims since Covid are from mental health issues. The majority of these are for depression and anxiety.
The health department has declared that the best treatment for depression and anxiety is going back to work. That is why, as sickness benefit moves into universal credit, the possibility of large-scale reform opens up for the government.
Read the full article here:
What the latest interest rates mean for your mortgage, savings and bills
04:01
,
Holly Evans
The Bank of England (BoE) have today announced a hold on the Bank Rate - what we might simply call the interest rate - at 4.5 per cent, keeping it the lowest it has been in the UK since mid-June 2023.
Around that time, with inflation rising fast and the BoE seeking to stem it, the base rate jumped from 3.5 per cent at the start of February to 5.25 per cent by August - causing a sharp increase in mortgage repayments, a battle for savers among banks and plenty of other side effects.
With both inflation and interest rates (generally, slowly and not always constantly) on the way back down, February saw the first decrease the BoE (or their Monetary Policy Committee, technically) have applied since November last year, amid an eventual government aim to stem inflation at two per cent.
Read the full article here:
Brexit created ‘mind blowing’ 2bn extra pieces of paperwork - enough to wrap around world 15 times
03:00
,
Holly Evans
Brexit has created a “mind blowing” nearly two billion extra pieces of paperwork for businesses - enough to wrap around the world 15 times.
If they were all laid end to end they would also reach to the moon and half way back again, an analysis of research by the Chartered Institute of Export & International Trade by the Liberal Democrats found.
Lib Dem trade spokesperson Clive Jones said it showed the scale of red tape plaguing British businesses since the UK’s withdrawal from Europe.
Read the full article here:
Half of Reform UK voters don’t believe in the Covid vaccine, poll shows
02:01
,
Holly Evans
Half of Reform UK voters have little or no confidence in Covid-19 vaccines, compared with the general public who overwhelmingly trust the jabs, a YouGov poll has found.
Those who back Nigel Farage’s party have a “distinct” attitude towards the vaccines, with 50 per cent saying they do not trust them.
That compares to 71 per cent of the public who said they trust the Covid jab a great deal or a fair amount, and just 24 per cent of voters who said they do not trust it much or at all. Reform voters are also significantly more likely to not have been vaccinated against Covid during the pandemic, the poll found.
Read the full article here:
Tories facing ‘extremely difficult’ local elections, Badenoch warns
01:00
,
Holly Evans
The Conservatives are facing an “extremely difficult” challenge in May’s local elections, Kemi Badenoch warned as she launched the party’s campaign to win town halls.
The Tory leader was also defiant about the threat her party faces from Nigel Farage’s Reform UK, urging voters to remember politics is not “showbusiness” and that “you will have to live with what you vote for”.
Voters across a number of county councils and unitary authorities in England will go to the polls on May 1, the first major electoral test since last July’s election.
Read the full analysis here:
Starmer backs calls for Netflix’s Adolescence to be shown in schools
00:00
,
Holly Evans
Fresh blow for Reeves as UK's official economic growth forecast 'set to be halved'
Thursday 20 March 2025 23:12
,
Tara Cobham
The UK’s official economic growth forecast for the year is set to halve, according to reports.
The Telegraph reports the expected growth rate for the 2025 financial year will be downgraded by the Office for Budget Responsibility (OBR) next week.
In a blow to Sir Keir Starmer’s government, which has repeatedly claimed growth is a key priority, the growth rate for April to March 2026 will reduce from 2 per cent to around 1 per cent, the newspaper reported.
Rachel Reeves is expected to attempt to blame the drop on the global economic landscape as it worsens amid Donald Trump’s tariffs. The chancellor is due to lay out her spring statement to MPs on Wednesday.
Protesters disrupt House of Lords demanding unelected chamber be abolished
Thursday 20 March 2025 23:00
,
Holly Evans
Starmer ‘not doing enough to end tsunami of sick notes’ pushing up benefits claimants
Thursday 20 March 2025 22:00
,
Holly Evans
Labour’s plans to cut the welfare bill do not go nearly far enough, the former minister who brought in the biggest reform of benefits since their creation in the 1940s has warned.
In a week where Keir Starmer’s government announced plans to remove disability benefits from an estimated 1 million claimants, former Tory work and pensions secretary Sir Iain Duncan Smith said more must be done to stop “a tsunami of so called fit notes signing people off work forever”.
Writing exclusively for The Independent, Sir Iain also raised problems with a culture where young people leave school “and go straight to their sick beds”.
Read the full article here:
Jeremy Hunt hits out at ‘hyperbolic’ Brexit claims of backers like Boris Johnson
Thursday 20 March 2025 21:00
,
Holly Evans
Former chancellor Jeremy Hunt has hit out at Brexiteers who inflated the economic benefits of the UK’s departure from the European Union.
Mr Hunt, who voted Remain in 2016, criticised what he described as some of the "more hyperbolic claims” of some Brexit’s backers - who included former Tory PM Boris Johnson.
But in a foreword to a new report, Mr Hunt also said he believed "many claims” about the negative impact of Brexit on the economy “were overly exaggerated" and the UK’s departure had "much less impact on British exports to the EU".
Read the full article here:
Is Liz Kendall now the most formidable woman in Starmer’s cabinet?
Thursday 20 March 2025 20:00
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Holly Evans
It was Liz Kendall who first made “country before party” a meme. In the wreckage of Labour’s 2015 election defeat, she was interviewed and said she would run to be leader of the party. When asked whether the party wanted to hear her hard truths about why it lost, she said she would always put the country before it.
It was the last time for many years that someone had the courage to tell Labour what was right, rather than what it wanted to hear. She was rewarded with a humiliating 4.5 per cent of the vote in the leadership election that Jeremy Corbyn won.
Her campaign manager, Morgan McSweeney, drew a lesson from that experience. If you wanted to change the country, you had to win the leadership of the Labour Party, and to do that, you had to tell Labour members what they wanted to hear. His next leadership campaign, for Keir Starmer, was more successful.
Read the full analysis here:
Starmer accused of waging new ‘war on countryside’
Thursday 20 March 2025 19:00
,
Holly Evans
Sir Keir Starmer has been accused of waging “war on the countryside” after the government quietly scrapped a grant that helped local groups buy closure-threatened pubs.
The Community Ownership Fund, which launched 2021 with the aim of handing out £150m worth of grants by the end of 2025, was cancelled early with £135m having been allocated to date.
As the number of pubs in England and Wales sits at a record low, with more than 400 closing their doors for good in 2024 alone, there is growing concern in rural areas that the cancellation of the fund just days before Christmas will damage communities across the country.
Read the full article here:
Lammy calls for Putin to accept unconditional ceasefire in Ukraine
Thursday 20 March 2025 18:00
,
Holly Evans
The UK called on Vladimir Putin to commit to a “full and immediate ceasefire” as Russian forces continued to bombard Ukraine.
Foreign Secretary David Lammy said the Russian leader should agree to the US and Ukrainian proposal for an unconditional ceasefire.
Military chiefs from the UK and its allies were meeting to discuss how a peacekeeping force could operate in Ukraine to deter further Russian attacks if a deal to end the war is reached.
Read the full article here:
Martin Lewis warns Labour £5bn benefits cuts are ‘fraught with challenges’
Thursday 20 March 2025 17:00
,
Holly Evans
Money expert Martin Lewis has shared his initial analysis of Labour’s newly announced changes to the welfare system, calling them “fraught with challenges”.
The reforms were announced by work and pensions secretary on Tuesday, with the measures amounting to £5 billion in cuts to welfare. This was mostly concentrated on scaling back health and disability-related benefits as part of Labour’s ‘Pathways to Work’ Green Paper.
Writing on social media platform X in a rare intervention, Mr Lewis said: “PIP (Personal Independence Payment) is often an individual's lifeline, the difference between an unsustainable life and a manageable one. The govt says those in 'genuine need' will be protected, yet that all boils down to matter of definition.”
Read the full article here:
Calls for a minister dedicated to coastal communities
Thursday 20 March 2025 16:42
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Holly Evans
Coastal communities deserve “longer, better, healthier lives”, Liberal Democrat MP Steff Aquarone said, as he called for a dedicated minister to have responsibility of coastal communities.
The North Norfolk MP said coastal communities should receive more direct Government attention, as he highlighted the disparity in health and life expectancy compared to those who live inland.
Referring to a report by England’s chief medical officer Professor Sir Chris Whitty on health outcomes in seaside towns, Mr Aquarone said: “What he uncovered was shocking.
“We have higher rates of poor health and disease, the rates of cardiovascular disease and cancer are higher, and those diagnosed with these diseases have poorer outcomes, they also suffer with them for longer.”
He added: “Our coastal communities deserve to live longer, better, healthier lives than they do now.”
Not a scrap of evidence against me, says Sturgeon as police probe dropped
Thursday 20 March 2025 16:20
,
Holly Evans
Former Scottish first minister Nicola Sturgeon has said there was not a “scrap of evidence” of wrongdoing against her in the Operation Branchform probe as she was cleared.
Police Scotland said on Thursday it has dropped the investigation into Ms Sturgeon and former SNP treasurer Colin Beattie in relation to the party’s finances.
It came as Ms Sturgeon’s estranged husband and former party chief executive Peter Murrell appeared in court charged with embezzlement.
Ms Sturgeon and Mr Beattie were arrested in 2023 in relation to Branchform, but were released pending further investigation.
Speaking to journalists outside her home near Glasgow, she said she is “relieved” to have been cleared, and admitted the past two years have been “difficult” and “frustrating”.
Read the full story here:
Starmer arrives at meeting with military chiefs to discuss Europe's future security
Thursday 20 March 2025 15:49
,
Holly Evans
Sir Keir Starmer has arrived at a meeting of military chiefs from the UK and its allies to discuss details of a future peacekeeping mission in Ukraine.
The Prime Minister travelled to the meeting at a military site in Greater London after visiting the UK’s latest generation of nuclear submarines in Barrow-in-Furness in the north west of England.
He arrived with Defence Secretary John Healey and was met by the UK’s chief of joint operations, Lieutenant General Nick Perry, as well as his French counterpart Major General Philippe de Montenon.
MP suggests Lammy 'unshackle his own chains' and cease arms licences to Israel
Thursday 20 March 2025 15:37
,
Holly Evans
Independent MP Shockat Adam referred to David Lammy’s family links to slavery before suggesting he could “unshackle his own chains” and ensure the UK ceases all arms licences to Israel.
The MP for Leicester South told the Commons: “I, along with a billion Muslims around the world, began my (Ramadan) fast on Tuesday morning not with just some food and water but with the screams of 400 innocent men, women and children ringing in our ears as they were burnt alive in their makeshift tents.”
Mr Adam criticised Israel for its actions in Gaza and the West Bank before accusing the UK of providing “military support and our airbases in Cyprus”.
He went on: “Can I ask the minister – and take this as it’s sincerely meant, the minister has passionately spoken about his heritage and his ancestors who were shackled in the chains of slavery – to unshackle his own chains and to immediately cease all arms licences and, despite the £6.1 billion economic ties, to impose economic sanctions and put in place a viable process of recognising the state of Palestine?”
Mr Lammy replied: “(Mr Adam) brings powerful rhetoric to this House this afternoon but let me say to him that notwithstanding the horrors of the conflict that has begun, we are three days into that conflict and it’s my job to use all endeavours I can to get back to that ceasefire.”
Labour denies returning to era of austerity
Thursday 20 March 2025 15:15
,
Holly Evans
A Labour Treasury minister has rejected claims that the government is returning to a Conservative-style police of austerity, ahead of Rachel Reeves’ Spring Statement.
Reports in The Guardian have suggested the chancellor will unveil the biggest set of cuts since George Osborne’s era, with certain Whitehall departments facing a seven per cent cut.
In a Q&A at the Institute for Government thinktank, asked about this claim, Jones replied: “Just factually, it would be incorrect to say that we are doing what the Conservatives did after 2010.
“The numbers will be published next Wednesday, but as you saw at the budget last year, we are increasing public spending, and we’ve increased it quite a lot.
“The fact is that we’ve got to do this modernisation and reform agenda. But we’re not, factually, taking an approach that is just blindly cutting spending because we think we should just reduce spending without a plan for how to get there. So I wouldn’t recognise that kind of definition of what’s taking place.”
Labour’s welfare ‘reforms’ are nothing of the sort – and they don’t go anywhere near far enough
Thursday 20 March 2025 14:49
,
Holly Evans
When I resigned from David Cameron’s government as the secretary of state for work and pensions in 2016, welfare stood at £61.6bn. By the end of this parliament, it is projected to be £108.7bn. Sickness benefit alone, which was £19bn back then, is set to rise to £32bn. So it is with disability benefit, which is set to rise from £11bn to some £31bn. To govern is to choose. Against the backdrop of an increasingly unsafe world, the need to invest significantly more in defence, and a flatlining economy, further reform of welfare is a necessity.
The pandemic response has hit the welfare budget hard. The rise in sickness benefit claims poses a challenge to the government, particularly because some 60 per cent of claims since Covid are from mental health issues. The majority of these are for depression and anxiety. The health department has declared that the best treatment for depression and anxiety is going back to work.
That is why, as sickness benefit moves into universal credit, the possibility of large-scale reform opens up for the government.
Read the full opinion article here from Iain Duncan-Smith:
Welfare system overhaul does not amount to cuts, insists Scottish Labour leader
Thursday 20 March 2025 14:44
,
Holly Evans
Anas Sarwar has denied that Labour’s decision to slash £5 billion a year from the welfare budget amounts to cuts.
The Scottish Labour leader rejected claims – including from within his own front bench – that the benefits system overhaul amounts to austerity because overall spending on welfare is still set to increase.
He said it is right that the UK Government focuses on encouraging more people into work and he criticised the Scottish Government for an “inefficient” benefits system north of the border which he said had wasted tens of millions of pounds.
UK Work and Pensions Secretary Liz Kendall announced on Tuesday £5 billion worth of proposed welfare changes, largely stemming from a big reduction in support for those off work due to disability and ill health.
Around a million people are expected to lose their disability benefits as part of the welfare overhaul, experts believe.
Speaking to reporters at Holyrood, Mr Sarwar denied the move amounts to cuts, and he said it will not come into effect this year.
Told the UK Government is cutting the welfare budget by £5 billion, he said: “No, you’re wrong actually because currently welfare spending across the UK is £50 billion, and the new proposals will mean it’s projected to be £64 billion.”
Starmer says EU's increase in defence spending gives opportunity for joint work
Thursday 20 March 2025 14:31
,
Holly Evans
Sir Keir Starmer has said there was scope for greater co-operation with the European Union after Brussels’ plans to increase defence spending would block the money being used to buy from UK arms firms.
The Prime Minister told Sky News: “I’m very pleased that the EU is signalling their intent to spend so much on defence.
“I’ve been making the argument, as others have, that all of us in Europe need to step up, not just in relation to Ukraine, but more generally, in our own collective self-defence.
“That does mean more spend, more capability, more co-ordination, and I want to have those discussions with our European allies. We’re continuing those discussions with them, because I do think the scope for more joint work is here.”
Coalition of the willing 'working at pace' to reach plans for peacekeeping force
Thursday 20 March 2025 14:24
,
Holly Evans
Sir Keir Starmer said members of the so-called coalition of the willing were “working at pace” to develop plans for a peacekeeping force if there is a deal to end the Ukraine war.
The Prime Minister said the political momentum was being turned into “military planning” with a meeting of defence chiefs on Thursday.
He told Sky News the “timetable now is coming into focus” following talks between the US and Russia.
Sir Keir said: “That’s why it’s important today that we’re turning the political momentum that we had on the weekend, in the meeting that I convened of nearly 30 political leaders, turning it today from the political concept into military plans.
“So, that’s what’s happening and today those plans are focusing on keeping the skies safe, the seas safe, and the borders safe and secure in Ukraine and working with Ukrainians.
“Now, we’re working at pace, because we don’t know if there’ll be a deal – I certainly hope there will be – but if there’s a deal, it’s really important that we’re able to react straight away.”
Demonstrators disrupt House of Lords to demand abolition of unelected chamber
Thursday 20 March 2025 14:16
,
Holly Evans
Protesters have disrupted proceedings in the House of Lords demanding the abolition of the unelected chamber.
A group of around half a dozen people in the public gallery threw leaflets, shouted and sang during the demonstration at noon on Thursday.
The House was adjourned for a short time as the demonstrators were escorted out.
Protester Lucy Porter, 50, a primary school teacher from Leeds, said she was “campaigning for a house of the people”.
On the Lords, she said: “It’s a symbol of everything that’s outdated.
“We don’t have a functioning democracy in this country.”
The leaflets, apparently modelled on an album by the Sex Pistols punk band, had written on them: “Never mind the Lords here’s the House of People.”
On the other side it stated: “Aristocrats and oligarchs: Out.
“Posties, mums, nurses and neighbours: In.
“Replace the House of Lords to save the UK.”
Watch: Protesters disrupt House of Lords demanding unelected chamber be abolished
Thursday 20 March 2025 14:05
,
Holly Evans
Half of Reform UK voters don’t believe in the Covid vaccine, poll shows
Thursday 20 March 2025 13:50
,
Holly Evans
Half of Reform UK voters have little or no confidence in Covid-19 vaccines, compared with the general public who overwhelmingly trust the jabs, a YouGov poll has found.
Those who back Nigel Farage’s party have a “distinct” attitude towards the vaccines, with 50 per cent saying they do not trust them.
That compares to 71 per cent of the public who said they trust the Covid jab a great deal or a fair amount, and just 24 per cent of voters who said they do not trust it much or at all. Reform voters are also significantly more likely to not have been vaccinated against Covid during the pandemic, the poll found.
Read the full article here: