The last thing I was expecting to discover on the doorstep of a Falkirk house was a 70-year-old woman crying at the near 16% council tax rise she and tens of thousands of others face next month.

Falkirk is bracing for the UK’s biggest hike in bills as the local authority faces a crisis of costs.

One councillor responsible for the increases has called in the police after receiving beheading taunts and threats of violence.

The area is facing its most difficult period in its 30-year history, while residents feel fragile and fobbed off.

Councils oversee the running of schools and social care, maintaining roads and collecting bins. They take charge of housing, swimming pools and libraries. The list is endless.

But Britain’s local authorities are cash-strapped and there are questions about how they should be funded in the long term.

Sky News went inside one Falkirk street to get a snapshot of the mood – and it was bleak.

We went door to door on Wilson Road and first stumbled across 70-year-old Catherine Mochar.

The unpaid carer was seemingly unaware of the upcoming changes to her bill and became visibly upset at the prospect of scraping together more cash in her already extremely stretched household budget.

“It’s absolutely ridiculous,” she said as her voice cracked.

Ms Mochar looks after her elderly sister and says her care package was revoked as the pensioner was deemed suitable to deal with the situation herself.

She says she is not entitled to a council tax exemption and worries about finding an extra 15.6%.

She said: “I am a pensioner. I don’t know where I am going to get it [the money] from. It is quite scary the thought of it.”

Round the corner from Catherine’s house, we meet a family who feel like they are paying more and getting less.

Claire Hamilton and William Reid have a three-year-old son and regularly use the local foodbank to make ends meet.

“It is going to become a choice between heating the house or paying council tax. Or getting food in and paying the council tax,” Claire says.

“It is quite a jump for not a lot in return. The collections on the bins keep getting longer and longer.”

She continues: “You want to do the best by your child and obviously they are not aware of all these stresses going on in the background.”

Council tax differs across UK

A drop in the frequency of bin collections is a moan people across the UK share and feeds into the narrative surrounding local services.

Council tax rates have been frozen or capped for much of the last two decades in Scotland, but this year the Scottish government has granted local leaders the power to go their own way.

In England, a principle exists which usually prevents more than a 5% increase to council tax without a referendum, mostly to protect taxpayers from excessive increases.

It is thought the average increase in England will not surpass last year’s total of 5.1%. There are some exemptions including Bradford which is hiking costs by 10%.

But Falkirk surpasses everyone and is the UK’s most extreme case.

Independent councillor Laura Murtagh initiated the idea of the 15.6% increase which was eventually voted through by most of her colleagues.

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She stresses anything less than the increase she proposed would have resulted in services, including education provision, being slashed.

But it has come at a personal cost.

Ms Murtagh, who stresses she does not want to incite a further pile-on, tells Sky News she has contacted police after threats of violence and taunts online depicting beheadings.

She said: “It has made me not want to go out. It has made me not want to go to events.

“I am having a conversation with the police. They are nasty threats. There are people who have said you could do with a kicking or you could do with more than that.

“People are sharing memes where they are doing beheading memes or whatever.”

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Local leaders say their rates have been much lower than their neighbours for many years which is unsustainable as demand for services soars.

The leader of Falkirk Council, Cecil Meiklejohn, was asked by Sky News if she could justify the 15.6% rise.

She said: “It is quite a hike. We always knew council tax needed to go up.

“We know that we have to continue to deliver good quality services, and we can’t do that without increasing our revenue and the only way we have the opportunity to do that locally is by increasing council tax.”

She concluded: “We will work with people who are going to be impacted by the increase.”

The UK economy shrank at the start of 2025, according to official figures which had been expected to show further meagre growth.

The Office for National Statistics (ONS) said that output declined by 0.1% during the month following the 0.4% growth seen in December.

A growth figure of 0.1% had been tipped by a majority of economists but the ONS noted a slump in manufacturing output.

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Its director of economic statistics, Liz McKeown, said: “The economy shrank a little in January but grew in the latest three months as a whole, with the overall picture continuing to be of weak growth.

“The fall in January was driven by a notable slowdown in manufacturing, with oil and gas extraction and construction also having weak months.

“However, services continued to grow in January led by a strong month for retail, especially food stores, as people ate and drank at home more.”

January’s data marks a fresh blow for the chancellor as the economy faces headwinds on many fronts at a time when her stated priority is securing economic growth.

Looming large for Rachel Reeves is the threat of an adverse business reaction to budget tax hikes she is due to impose from April.

Firms are facing the bulk of the £40bn bill through employer national insurance contributions and are warning of job losses, weaker pay rises and investment, along with possible price hikes, to account for the surge in costs.

Consumer spending power is also set to be tested at the same time as essential bills including those for council tax, water and household energy are due to rise sharply.

Other challenges include the escalating trade war initiated by Donald Trump, which is tipped by economists to dent growth prospects globally.

Ms Reeves is low on ammunition as she prepares a spring statement for MPs later this month, with the welfare bill set to be slashed to avoid breaking her own spending rules.

At the same time, the independent Office for Budget Responsibility is widely expected to downgrade its forecasts for UK growth ahead.

The chancellor said of the ONS data: “The world has changed and across the globe we are feeling the consequences.

“That’s why we are going further and faster to protect our country, reform our public services and kickstart economic growth to deliver on our Plan for Change.

“And why we are launching the biggest sustained increase in defence spending since the Cold War, fundamentally reshaping the British state to deliver for working people and their families; and taking on the blockers to get Britain building again.”

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Her Conservative counterpart, Mel Stride, urged her to use the spring statement to change course.

“It is no surprise that growth is down again, following near no growth in the last three months of 2024”, he said.

“After consistently talking Britain down, raising taxes to record highs and crushing business with their extreme employment legislation this government is a growth killer.

“Labour inherited the fastest growing economy in the G7 but since they arrived business confidence has collapsed and jobs are being lost.”

Donald Trump has warned the European Union he will impose a 200% tariff on its alcohol – including wine and champagne – if the bloc imposes duties on US whiskey.

The US president used a social media post to issue his latest threat to the EU, having previously warned that it was created to “screw the United States” and would “very soon” face his escalating trade war.

He wrote in a Truth Social post: “The European Union, one of the most hostile and abusive taxing and tariffing authorities in the world, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% tariff on whisky.

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“If this tariff is not removed immediately, the US will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES.

“This will be great for the wine and champagne businesses in the US,” he concluded.

It was Mr Trump‘s response to a European Commission pledge to reimpose previously suspended tariffs on the US in response to US steel and aluminium duties which came into force on Wednesday.

The commission said its retaliatory measures would target US goods worth €26bn from 1 April unless talks could resolve the trade war escalation.

Mr Trump is widely expected, from 2 April, to carry out a previous threat that would see all EU exports to the United States come under tariffs – mirroring current plans to target his closest neighbours Mexico and Canada.

Financial markets were quick to react to the latest escalation, with EU stock markets sinking across the board.

The declines were led by drinks manufacturers. Pernod Ricard on the CAC in Paris, for example, was more than 3.5% lower in the moments after Mr Trump’s post was published.

The FTSE 100 was also in negative territory. Diageo, which counts Irish-made favourite Guinness among its stable of brands, was only 0.1% down.

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While the UK has not been threatened directly with tariffs beyond the universal steel and aluminium duties, many of its constituent companies would be hurt by an expanding EU-US trade spat.

United Nations data shows that EU nations export alcoholic drinks worth more than $11bn per year to the United States, with wine accounting for half that sum.

It was understood that before the threat was made, Spain, France and Italy had been among nations urging the EU not to target wine and spirits as part of its response to the metals duties.

The Irish Whiskey Association said of the growing protectionism: “There is no winner in a trade war. The imposition of tariffs will impact on our businesses and our consumers.

“Having our sector implicated in this dispute puts jobs, investments and businesses at risk and has the potential to be devastating for Irish Whiskey.”