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A recession is on the horizon and the chancellor “is in a terrible bind” as low growth and high-interest payments on debt mean little room for manoeuvre, according to a respected think tank.

The UK economy is stuck between the possibility of low growth and persistently high inflation, the Institute for Fiscal Studies (IFS) said in its green budget report.

As a result, there is no capacity to cut taxes or increase spending, it said.

Policy makers risk recession if unfunded tax cuts are introduced, as they could cause more inflation and lead the Bank of England to bring borrowing costs up by hiking interest rates or keeping them higher for longer.

Interest rates were brought to 5.25% after 14 consecutive rises in an effort to tame the rate of price rises.

Heightened borrowing costs and lower company profits have led bank Citi (who produced economic forecasting for the report) to expect a “moderate recession” through the first half of next year.

A recession is two back-to-back three-month periods where there is a negative amount of economic growth.

At the same time the government is set to have the largest budget surplus “in a generation” as the amount of tax coming into state coffers will be greater than government outgoings.

State borrowing will be £20bn less than predicted by the independent official forecasters, the Office of Budget Responsibility (OBR).

Rising wages mean more tax is being taken in. Previous analysis from the IFS said the UK’s tax burden is the largest since the Second World War.

Despite overall borrowing estimated to be lower than first thought, the amount of money in interest payments on public debt will grow, the report said.

Echoing statements made by Jeremy Hunt to Sky News last week, the report said £30bn more in interest payments could be paid this year than expected.

Pressure will mount on the government to increase public spending more than current plans but from March 2025 there are likely to be effective cuts in the budgets of government departments and falling spending on public services, the report added.

The publication comes ahead of the chancellor’s autumn statement on 22 November.

The rate of price rises in the UK has remained high with the consumer price index (CPI) measure of inflation at 6.7% in August, more than triple the goal of the UK central bank, the Bank of England.

It’s not just the chancellor who faces pressure. Prime Minister Rishi Sunak has staked some of his political success on a growing economy by making it one of his five priorities.

Latest figures show the rate of economic growth – gross domestic product (GDP) – was 0.2% in August this year after a contraction of 0.5% in July.

“Contrary to previous reporting, the UK’s growth projections have recently been dramatically upgraded with the IMF confirming that the UK will grow faster than Germany, France and Italy in the long term, as well as being the fastest major European economy to recover from the pandemic,” a spokesperson for the Treasury said.

“We must stick to our plan that we are delivering to halve inflation, which will help unlock sustainable growth, support families with the cost of living and get debt falling.”

In response, the Labour shadow chief secretary, Darren Jones said: “Successive failures by Conservatives ministers have left us with low growth, high tax and national debt at the highest level in generations. Britain cannot afford another five more years of the Conservatives.”

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‘Shameful’ that black boys in London more likely to die than white boys, says Met Police chief

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'Shameful' that black boys in London more likely to die than white boys, says Met Police chief

It is “shameful” that black boys growing up in London are “far more likely” to die than white boys, Metropolitan Police chief Sir Mark Rowley has told Sky News.

The commissioner told Sunday Morning with Trevor Phillips that relations with minority communities “is difficult for us”.

Sir Mark, who came out of retirement to become head of the UK’s largest police force in 2022, said: “We can’t pretend otherwise that we’ve got a history between policing and black communities where policing has got a lot wrong.

“And we get a lot more right today, but we do still make mistakes. That’s not in doubt. I’m being as relentless in that as it can be.”

He said the “vast majority” of the force are “good people”.

However, he added: “But that legacy, combined with the tragedy that some of this crime falls most heavily in black communities, that creates a real problem because the legacy creates concern.”

Sir Mark, who also leads the UK’s counter-terrorism policing, said it is “not right” that black boys growing up in London “are far more likely to be dead by the time they’re 18” than white boys.

“That’s, I think, shameful for the city,” he admitted.

The Met Police chief’s admission comes two years after an official report found the force is institutionally racist, misogynistic and homophobic.

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Police chase suspected phone thief

Baroness Casey was commissioned in 2021 to look into the Met Police after serving police officer Wayne Couzens abducted, raped and murdered Sarah Everard.

She pinned the primary blame for the Met’s culture on its past leadership and found that stop and search and the use of force against black people was excessive.

At the time, Sir Mark, who had been commissioner for six months when the report was published, said he would not use the labels of institutionally racist, institutionally misogynistic and institutionally homophobic, which Casey insisted the Met deserved.

However, London Mayor Sadiq Khan, who helped hire Sir Mark – and could fire him – made it clear the commissioner agreed with Baroness Casey’s verdict.

After the report was released, Sir Mark said “institutional” was political language so he was not going to use it, but he accepted “we have racists, misogynists…systematic failings, management failings, cultural failings”.

A few months after the report, Sir Mark launched a two-year £366m plan to overhaul the Met, including increased emphasis on neighbourhood policing to rebuild public trust and plans to recruit 500 more community support officers and an extra 565 people to work with teams investigating domestic violence, sexual offences and child sexual abuse and exploitation.

Watch the full interview on Sunday Morning with Trevor Phillips from 8.30am on Sunday.

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Unite votes to suspend Angela Rayner over Birmingham bin strike

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Unite votes to suspend Angela Rayner over Birmingham bin strike

Labour’s largest union donor, Unite, has voted to suspend Deputy Prime Minister Angela Rayner over her role in the Birmingham bin strike row.

Members of the trade union, one of the UK’s largest, also “overwhelmingly” voted to “re-examine its relationship” with Labour over the issue.

They said Ms Rayner, who is also housing, communities and local government secretary, Birmingham Council’s leader, John Cotton, and other Labour councillors had been suspended for “bringing the union into disrepute”.

There was confusion over Ms Rayner’s membership of Unite, with her office having said she was no longer a member and resigned months ago and therefore could not be suspended.

But Unite said she was registered as a member. Parliament’s latest register of interests had her down as a member in May.

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The union said an emergency motion was put to members at its policy conference in Brighton on Friday.

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Unite is one of the Labour Party’s largest union donors, donating £414,610 in the first quarter of 2025 – the highest amount in that period by a union, company or individual.

The union condemned Birmingham’s Labour council and the government for “attacking the bin workers”.

Mountains of rubbish have been piling up in the city since January after workers first went on strike over changes to their pay, with all-out strike action starting in March. An agreement has still not been made.

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Rat catcher tackling Birmingham’s bins problem

Ms Rayner and the councillors had their membership suspended for “effectively firing and rehiring the workers, who are striking over pay cuts of up to £8,000”, the union added.

‘Missing in action’

General secretary Sharon Graham told Sky News on Saturday morning: “Angela Rayner, who has the power to solve this dispute, has been missing in action, has not been involved, is refusing to come to the table.”

She had earlier said: “Unite is crystal clear, it will call out bad employers regardless of the colour of their rosette.

“Angela Rayner has had every opportunity to intervene and resolve this dispute but has instead backed a rogue council that has peddled lies and smeared its workers fighting huge pay cuts.

“The disgraceful actions of the government and a so-called Labour council, is essentially fire and rehire and makes a joke of the Employment Relations Act promises.

“People up and down the country are asking whose side is the Labour government on and coming up with the answer not workers.”

SN pics from 10/04/25 Tyseley Lane, Tyseley, Birmingham showing some rubbish piling up because of bin strikes
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Piles of rubbish built up around Birmingham because of the strike over pay

Sir Keir Starmer’s spokesman said the government’s “priority is and always has been the residents of Birmingham”.

He said the decision by Unite workers to go on strike had “caused disruption” to the city.

“We’ve worked to clean up streets and remain in close contact with the council […] as we support its recovery,” he added.

A total of 800 Unite delegates voted on the motion.

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Binance’s CZ threatens to sue Bloomberg over Trump stablecoin report

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Binance’s CZ threatens to sue Bloomberg over Trump stablecoin report

Binance’s CZ threatens to sue Bloomberg over Trump stablecoin report

Binance co-founder CZ has dismissed a Bloomberg report linking him to the Trump-backed USD1 stablecoin, threatening legal action over alleged defamation.

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