You remember that “dire economic inheritance” the new government keeps talking about?
Earlier in the summer Rachel Reeves produced a document suggesting the state of Britain’s economy and public finances was so dismal – so much worse than expected – that she would be forced into introducing significant measures (which read: lots more tax rises) in this autumn’s budget.
The only thing is, much of the economic news since then has been, well, not dire in the slightest. Inflation is still low – so much so that earlier this month the Bank of England cut interest rates.
More compellingly, the latest estimates of gross domestic product (GDP) – the broadest measure of economic activity – show that far from being in recession, the UK is growing at a decent whack.
Indeed, having been the second-slowest growing economy in the group of seven leading industrialised nations in 2023, Britain is, at least over the first six months of 2024, the fastest growing member of the G7.
Image: Reeves is expected to announce a budget including more taxes and more spending cuts
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2:49
Do Labour’s claims stack up?
So a lot of people have been scratching their chins and wondering whether the new government might be overstating it a bit.
Might they just be making a political point, aimed at their predecessors in government?
Well, this morning we had the latest public finances numbers and here the picture is considerably closer to the Reeves version than those other bits of data.
The key thing here is to look beneath the overall borrowing figures. There you see a couple of key bits of information.
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First, despite the fact that the economy is growing faster than expected, it’s not resulting in a big windfall of tax revenues (as often happens).
Instead, according to the Office for National Statistics figures, revenues are basically in line with where the Office for Budget Responsibility (OBR) expected them to be around now.
The OBR forecast back in March that by now (or rather, by July – the figures we got today) the government would have collected around £327bn in tax revenues. Instead it has collected only £326bn – a little bit less. So no big windfall.
But now look at the amount it’s spending, and the story is slightly more stark. The OBR thought the government would have spent around £396bn by this point in the year.
Instead, it’s already spent £405bn.
So it’s making less than expected and spending more than expected. And that overspend might not sound much, at £9bn.
But consider that £9bn happens to be precisely the amount of “headroom” the government has before it breaks its fiscal rules and you see the issue.
And this, bear in mind, is only the data for the first four months of the fiscal year. If these trends continue, the gap could get bigger still.
So on the face of it, today’s public finance numbers provide a clear rationale for the course of action the chancellor has (according to those I talk to in Whitehall) already decided upon: more taxes and more spending cuts in this October’s budget.
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However, it’s worth saying there is one other way for the chancellor to create extra headroom against her fiscal rules, which is to change the particular measure she’s judging that headroom against.
A lot of economists believe the net debt statistic she inherited from the Conservatives is the wrong one to use in her fiscal rules – and that she should use the country’s total national debt, not excluding any debt owned by the Bank of England.
Long story short, if she uses this other measure (and I’m told this is something she is considering) then she suddenly has a lot more headroom.
Even so, don’t expect her to change the tune at the budget in October. There will be more bad news to come.
The UK will buy at least 12 F-35 stealth jets that can carry nuclear warheads in the most significant strengthening of its nuclear capability in a generation, the government has said.
Today, Sir Keir Starmer will tell a summit of NATO allies in The Hague that the new squadron will join an alliance mission that can be armed with US nuclear weapons.
The dramatic move will doubtless draw condemnation and concern from Russia and China.
But it comes at a time of growing global insecurity – and as the prime minister and his European and Canadian counterparts scramble to convince Donald Trump they are serious about bolstering their ability to defend Europe, instead of overly relying on the United States.
The US president, a long-standing NATO sceptic, raised questions about whether he would uphold the alliance’s founding Article 5 principle – that an attack on one is an attack on all – before he even arrived in the Dutch city last night.
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0:36
‘There’s numerous definitions of Article 5’
An urgent need to keep Mr Trump on side has prompted NATO allies to agree to increase spending on defence and national resilience to a new target of 5% of GDP by 2035.
As part of this push to rearm, Sir Keir will give the Royal Air Force the ability to carry airborne nuclear warheads for the first time since the 1990s.
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“In an era of radical uncertainty we can no longer take peace for granted,” he said.
“These F-35 dual capable aircraft will herald a new era for our world-leading Royal Air Force and deter hostile threats that threaten the UK and our allies.
“The UK’s commitment to NATO is unquestionable, as is the alliance’s contribution to keeping the UK safe and secure, but we must all step up to protect the Euro-Atlantic area for generations to come.”
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1:05
What is NATO’s 5% defence spending goal?
It was not immediately clear when the F-35 jets would be bought or how much they will cost, but the new squadron will be part of a NATO-led nuclear deterrence mission.
That is in contrast to the UK’s national nuclear deterrence, based on a fleet of four nuclear-armed submarines, though they too are used to defend the whole of the alliance.
Mark Rutte, the head of NATO, applauded the plan – saying: “The UK has declared its nuclear deterrent to NATO for many decades, and I strongly welcome today’s announcement that the UK will now also join NATO’s nuclear mission and procure the F-35A.
“This is yet another robust British contribution to NATO.”
Image: Sir Keir watches a demonstration by troops as he visits the Netherlands marines training base. Pic: AP
Aircraft operated by a small number of NATO countries, including Belgium, Germany and the Netherlands, are cleared to carry US-provided nuclear weapons in a war.
The RAF and the Royal Navy already operate F-35B jets that can fly off Britain’s two aircraft carriers, but they are not equipped to drop nuclear warheads.
The new planes will be the F-35A variant, operated by the air force, that take off from land but can fly further and be armed with nuclear or conventional weapons.
The government said they would all be based together at RAF Marham in Norfolk.
The government has long planned to purchase a total of 138 F-35 aircraft, but has so far only acquired around three dozen – seven years since the first jets entered service.
The decision to purchase 12 of the A-variant does not mean extra aircraft.
It just means a diversification in the fleet – something the RAF has long been pushing for – though it’s a decision some in the Royal Navy have long pushed back against, believing it would reduce even further the number of the B-version that operate from their carriers.
Doctors are using AI software that does not meet minimum standards to record and transcribe patient meetings, according to a Sky News investigation.
NHS bosses have demanded GPs and hospitals stop using artificial intelligence software that could breach data protection rules and put patients at risk.
A warning sent out by NHS England this month came just weeks after the same body wrote to doctors about the benefits of using AI for notetaking – to allow them more time to concentrate on patients – using software known as Ambient Voice Technology, or “AVT”.
Health Secretary Wes Streeting will next week put AI at the heart of the reform plan to save the NHS in the 10-year plan for the health service in England.
But there is growing controversy around software that records, transcribes and summarises patient conversations using AI.
In April, NHS England wrote to doctors to sell the benefits of AVT and set out minimum national standards.
However, in a letter seen by Sky News, NHS bosses wrote to doctors to warn that unapproved software that breached minimum standards could harm patients.
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Image: The version seen in the GP demonstration to Sky News complies with all NHS England standards and guidance
The 9 June letter, from the national chief clinical information officer of NHS England, said: “We are now aware of a number of AVT solutions which, despite being non-compliant … are still being widely used in clinical practice.
“Several AVT suppliers are approaching NHS organisations … many of these vendors have not complied with basic NHS governance standards.
“Proceeding with non-compliant solutions risks clinical safety, data protection breaches, financial exposure, and fragmentation of broader NHS digital strategy.”
Sky News has previously revealed the danger of AI “hallucinations”, where the technology makes up answers then lies about them, which could prove dangerous in a healthcare setting.
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1:59
Is ChatGPT reliable despite its ‘hallucinations’?
NHS England sets minimum standards but does not tell NHS trusts and healthcare providers which software providers to use.
Sky News can now reveal there is growing pressure on NHS England and similar bodies to be more proactive.
Dr David Wrigley, deputy chair of the British Medical Association’s GP committee, said: “Undoubtedly, as a GP myself and my 35,000 colleagues, we’ve got responsibilities here – but in such a rapidly developing market when we haven’t got the technical knowledge to look into this.
“We need that help and support from those who can check that the products are safe, check they’re secure, that they’re suitable for use in the consulting room, and NHS England should do that and help and support us.”
Dr Wrigley continued: “We’re absolutely in favour of tech and in favour of taking that forward to help NHS patients, help my colleagues in their surgeries.
“But it’s got to be done in a safe and secure way because otherwise we could have a free for all – and then data could be lost, it could be leaking out, and that just isn’t acceptable.
“So we are not dinosaurs, we’re very pro-AI, but it has to be a safe, secure way.”
Image: The head of the NHS Confederation says the letter is ‘a really significant moment’
The spectre of dozens of little-known but ambitious AI companies lobbying hospitals and surgeries to get their listening products installed worries some healthcare professionals.
There are huge profits to be made in this technological arms race, but the question being asked is whether hundreds of different NHS organisations can really be expected to sift out the sharks.
Matthew Taylor, chief executive of the NHS Confederation, said the letter was “a really significant moment”.
He said it was right for the NHS to experiment, but that it needed to be clearer what technology does and does not work safely.
“My own view is that the government should help in terms of the procurement decisions that trusts make and should advise on which AI systems – as we do with other forms of technology that we use in medicine – which ones are safe,” Mr Taylor said.
“We’ll need [government] to do a bit more to guide the NHS in the best way to use this.”
When pressed whether in the short term that actually makes it sound like it could be quite dangerous, Mr Taylor replied: “What you’ve seen with ambient voice technology is that kind of ‘let a thousand flowers bloom’ approach has got its limits.”
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0:45
Godfather of AI warns of its dangers
Earlier this year, the health secretary appeared to suggest unapproved technology was being used – but celebrated it as a sign doctors were enthusiastic for change.
Mr Streeting said: “I’ve heard anecdotally down the pub, genuinely down the pub, that some clinicians are getting ahead of the game and are already using ambient AI to kind of record notes and things, even where their practice or their trust haven’t yet caught up with them.
“Now, lots of issues there – not encouraging it – but it does tell me that contrary to this, ‘Oh, people don’t want to change, staff are very happy and they are really resistant to change’, it’s the opposite. People are crying out for this stuff.”
Image: GP Anil Mehta says AI software helps cut paperwork and patients are ‘extremely reassured’
Doctors who use AI that complies with national standards already say there are big benefits.
Anil Mehta, a doctor in the health secretary’s Ilford constituency, told Sky News he backed his MP’s drive for more AI technology in healthcare.
Dr Mehta demonstrated the version of Ambient Voice Technology that he uses.
This software, Accurx Scribe, has been developed and deployed in line with all current NHS England requirements for AVT, and there is no suggestion this product breaches any rules, standards or guidance.
Indeed, the company which developed it meets weekly with NHS England on creating a standardised approach to scale the benefits across the NHS.
“I spend 30% of my week doing paperwork,” Dr Mehta said.
“So I think once I’ve explained all of those features of what we’re doing, patients are extremely reassured. And I haven’t faced anybody that’s not wanted to have me do this.
He added: “(I) think that consultation with your doctor is extremely confidential, so that’s not changed at all.
“That remains confidential – so whether it’s a vulnerable adult, a vulnerable child, teenager, young child with a parent, I think the concept of that confidentiality remains.”
An NHS spokesperson said: “Ambient Voice Technology has the potential to transform care and improve efficiency and in April, the NHS issued guidance to support its use in a safe and secure way.
“We are working with NHS organisations and suppliers to ensure that all Ambient Voice Technology products used across the health service continue to be compliant with NHS standards on clinical safety and data security.”
Another heatwave could be on the way this weekend, forecasters say.
Temperatures could reach 30C, but some showers are expected before then amid more changeable weather.
Some parts of the UK will experience highs of 29C on Saturday, with the potential for 30C on Sunday and 31C on Monday, according to the Met Office.
Last Saturday was the hottest day of the year so far, with a provisional temperature of 33.2C recorded in Charlwood, Surrey.
The Met Office confirmed “many places” in England and “one or two areas” in Wales, including Cardiff, entered a heatwave last Friday.
A heatwave is recorded when an area reaches a certain temperature – the level of which varies across the UK – for three consecutive days.
Music fans can expect a mixture of sunshine and rain at this week’s Glastonbury Festival, where more than 200,000 people are expected to attend.
Image: Some parts of the UK entered a heatwave last week. Pic: PA
‘Risk of showers and thunderstorms’
Oli Claydon, from the Met Office, said Wednesday would be “warmer” with “an increasing risk of showers and thunderstorms”.
He said temperatures would reach a maximum of 27C on Thursday, with potential for heavy showers in the east and more persistent rain in the northwest of Scotland into the evening.
“Friday will see a maximum of 27C again as the high, the showers will clear away to the northeast, with local drizzle in parts of the South West and Wales through the day,” Mr Claydon added.
The South East of England is expected to experience the highest temperatures, potentially reaching 29C on Saturday and 30C on Sunday.
Temperatures could reach up to 31C on Monday, but there was lower certainty around that, Mr Claydon added.
Mr Claydon said it was possible the South East of England “could be looking at a short-lived localised heatwave”.
“When we had the warm spell last week it was much more widespread, we’re not likely to see that,” he added.