Rachel Reeves has opened the door to emergency spending cuts as No 10 refused to rule out the possibility of an emergency budget in the spring.
Facing a grilling from MPs in the Commons on Tuesday over the rising cost of government borrowing and the recent falls in the value of the pound, Ms Reeves said there was a need to go “further and faster” in search of economic growth.
She declined to rule out future spending cuts, saying she would not write “five years of budgets in the first six months of a Labour government”, before doubling down on a commitment to stick to the governments’ fiscal rules. The rules require day-to-day spending to be met from revenues rather than further borrowing.
In addition, Downing Street refused to rule out an emergency budget in the spring.
It comes as the fresh inflation figures are due this morning. UK inflation is set to have stayed the same in December as economists anticipate a “temporary reprieve” before price rises pick up pace this year.
Meanwhile, Tulip Siddiq has resigned as a Treasury minister amid a Bangladesh anti-corruption probe in relation to properties allegedly linked to her aunt’s former regime.
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Mauritius PM orders special cabinet meeting as Starmer rushes to sign Chagos deal
A race appears to be on to have a deal signed before Monday when Donald Trump is sworn in as the 47th president of the United States.
The president-elect has made it clear that he does not agree with the Biden administration over the handover of the British Indian Ocean colony and would seek to block or veto it once he is in office.
Reports from Mauritius suggest that the deal “is almost done”, although one senior government source there told The Independent that he was “startled” by suggestions it was to be signed in the next few days.
However, another source in the Mauritian government told The Daily Telegraph: “We intend to agree before January 20.”
David Maddox and Millie Cooke have the full report:
Tom Watling14 January 2025 19:01
Starmer says ‘door remains open’ for Tulip Siddiq
Sir Keir Starmer said the “door remains open” for Tulip Siddiq in his letter accepting her resignation as Treasury minister.
The prime minister said: “Thank you for your letter. It is with sadness I accept your resignation from your ministerial role.
“I want to thank you for your commitment during your time as Economic Secretary to the Treasury including spearheading the rollout of banking hubs and opening our 100th site, leading our thinking on financial inclusion, and contributing to the success of the Chancellor’s first Mansion House speech.
“In accepting your resignation, I also wish to be clear that Sir Laurie Magnus as independent adviser has assured me he found no breach of the Ministerial Code and no evidence of financial improprieties on your part. I want to thank you for self-referring to the independent adviser and for your full co-operation with the establishment of facts.
“I appreciate that to end ongoing distraction from delivering our agenda to change Britain, you have made a difficult decision and want to be clear that the door remains open for you going forward.”
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Badenoch accuses Starmer of ‘dither and delay’ after Siddiq resignation
Sir Keir Starmer “dithered and delayed to protect” former economic secretary to the Treasury Tulip Siddiq, Kemi Badenoch has said.
The Conservative leader wrote in a post on X: “It was clear at the weekend that the anti-corruption minister’s position was completely untenable. Yet Keir Starmer dithered and delayed to protect his close friend.
“Even now, as Bangladesh files a criminal case against Tulip Siddiq, he expresses ‘sadness’ at her inevitable resignation. Weak leadership from a weak Prime Minister.”
Andy Gregory14 January 2025 17:55