The US government has shut down for the first time in almost seven years after last-ditch Senate votes on funding plans fell short.

Hundreds of thousands of federal workers deemed not essential for protecting people or property – such as law enforcement personnel – could be furloughed or laid off after the shutdown began at midnight (5am UK time).

Critical services, including social security payments and the postal service, will keep operating but may suffer from worker shortages, while national parks and museums could be among the sectors that close completely.

Explained: What is a shutdown and who does it impact?

It comes after rival Democrats and Republicans refused to budge in their stand-off over healthcare spending.

A Democrat-led proposal to keep the government funded went down by 53 votes to 47 in the Senate, before the Republicans’ one notched up 55 in favour – five short of the threshold needed to avert a shutdown.

Unlike legislation, a simple majority isn’t enough to pass a government funding bill.

Following the votes in Washington DC on Tuesday night, the White House’s budget office confirmed the shutdown would happen and said affected agencies “should now execute their plans”.

It blamed the Democrats, describing their position as “untenable”. The opposition party wants to reverse cuts to the government’s health insurance programme, Medicaid, which were passed earlier this summer.

Senate majority leader John Thune, a Republican, accused the Democrats of taking federal workers “hostage”.

His Democrat counterpart, Senate minority leader Chuck Schumer, said the Republicans’ funding package “does absolutely nothing to solve the biggest health care crisis in America”.

Trump threatens layoffs

President Donald Trump was defiant ahead of the votes, and warned he could make “irreversible” cuts “that are bad” for the Democrats if the shutdown went ahead.

He threatened to cut “vast numbers of people out” and “programmes that they (the Democrats) like”.

“We’ll be laying off a lot of people,” he told reporters in the Oval Office on Tuesday.

Tens of thousands of government employees have already been laid off this year, driven by the “DOGE” initiative spearheaded by Elon Musk upon Mr Trump’s return to the White House.

The last shutdown was in Mr Trump’s first term, from December 2018 to January 2019, when he demanded money for his US-Mexico border wall. At 35 days, it was the longest on record.

Mr Thune has expressed hope the latest shutdown will come to a much quicker conclusion, telling reporters: “We can reopen tomorrow – all it takes is a handful of Democrats to join Republicans to pass the clean, nonpartisan funding bill that’s in front of us.”

Before this week, the government had shut down 15 times since 1981. Most only last a few days.

The Senate will hold further votes on the Republican and Democrat stopgap funding bills on Wednesday. The former would fund the government through to 21 November.

What happens now?

Immigration enforcement, air-traffic control, military operations, social security and law enforcement are among the services that will not be brought to a halt.

However, should employees miss out on payslips as a result of a prolonged shutdown, they could be impacted by staffing shortages. For example, delays at airports.

Cultural institutions deemed non-essential, like national parks and museums, will be more directly impacted from the very beginning, with large cuts to the workforce.

The popular Smithsonian, for example, has said it only has enough funding to stay open for a week.

Broadway actors are preparing to exit the stage in a strike that would shutter more than 30 productions ahead of its peak season.

Actors’ Equity, a union representing 900 performers and stage managers in New York’s iconic theatre scene, said a walkout was on the cards due to a dispute over healthcare.

It’s negotiating with the Broadway League, a trade body representing theatre owners, producers, and operators. A previous three-year contract expired earlier this week.

The union wants the league to increase its contribution to its healthcare fund, which is expected to fall into a deficit before next May. The rate of contributions has remained unchanged for more than a decade.

Actors’ Equity president Brooke Shields said: “Asking our employers to care for our bodies, and to pay their fair share toward our health insurance is not only reasonable and necessary, it’s an investment they should want to make toward the long-term success of their businesses.”

She added: “There are no Broadway shows without healthy Broadway actors and stage managers. And there are no
healthy actors and stage managers without safe workplaces and stable health insurance.”

The Broadway League said it was “continuing good-faith negotiations” to “reach a fair agreement” that works for “shows, casts, crews, and the millions of people from around the world who come to experience Broadway.”

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Should Broadway fall victim to strike action, it would follow in the footsteps of Hollywood – where writers walked out in 2023, curtailing a number of major productions – and the US video game industry in 2025, with concerns around the use of AI a key driver.

Actors’ Equity has not carried out a major strike since 1968, when a three-day dispute shut down 19 shows. An intervention from the New York City mayor helped both sides come to a deal.

The energy price cap is on course to remain steady through this winter but may jump in six months’ time, according to a respected industry forecast.

Ahead of the 2% rise in the default tariff, which is imposed from Wednesday until the end of December, Cornwall Insight said it was currently predicting that the latest increase would be eradicated for the January-March quarter.

It saw a £30 drop to average annual bills at the start of 2026 despite, the specialist said, the expected addition of a £10 per year levy to support the next generation of new nuclear power stations.

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Cornwall Insight warned that further government-imposed policy costs could add £100 more a year to bills from April, building on higher charges in place to pay for the green energy future and help for households through the expanded warm home discount.

Its prediction, which is subject to wholesale market movements and regulatory consultations on how to apply such charges to bills, would see the cap hit £1,855 from the October-December average £1,755.

Policy costs to assist the battle against climate change are playing an increasing role in determining the level of the price cap.

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There are 34 million households, including those on pre-payment meters and other standard variable arrangements, on the energy price cap.

There are a further 20 million unaffected by the price cap shift as they are on fixed rate deals.

They are only exposed to changes in raw energy prices and new policy costs when their term ends.

Wholesale prices – volatile since Russia’s invasion of Ukraine back in February 2022 – have been the main driver of rising bills since the end of the COVID pandemic.

But they are making little contribution to October’s increase as gas prices have remained stable recently due to weaker demand in the global economy and higher flows.

Much, however, depends on a lack of global shocks. The government wants to remove that volatility from our bills through a focus away from gas towards wind and new nuclear, including through modular reactors.

The problem for household bills in the interim is that it means even higher charges to help pay for the new infrastructure to support that shift in electricity provision.

Minister for energy consumers, Martin McCluskey, said: “Wholesale gas costs remain 75% above their levels before Russia invaded Ukraine. The more renewables on the system, the cheaper the wholesale price of electricity, which is why the only answer for Britain is this government’s mission to get us off the rollercoaster of fossil fuel prices and onto clean, homegrown power we control.”

He said of efforts to support struggling households: “We are taking urgent action to support vulnerable families this winter, expanding the £150 Warm Home Discount to more than six million families, which helps one in five households with their energy bills.

“In the coming weeks, we will be announcing details of the biggest home upgrade programme in British history to improve up to five million homes, making them cheaper and cleaner to run.”

Recent figures by Ofgem showed a record sum for household energy debt.

The regulator revealed a £4.4bn total during the second quarter of the year – up by £750m on the same period in 2024.

The government has said it is working with Ofgem to find solutions. Ideas include the possibility of a debt relief scheme.

Will Owen, energy expert at Uswitch.com, said of the Cornwall Insight predictions: “The predicted rise is driven by the increasing costs of making our energy grid fit for the future, and these charges are being passed on to bill-payers.

“If you’re on a standard variable tariff, you can beat these expected rises and save on bills by switching to a well-priced fixed deal now.

“There are currently 26 fixed deals priced below the October price cap, with savings of around £234 for the average household.”