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Economists suspected that the comfortable growth enjoyed at the beginning of the year might prove to be short-lived, and they appear to be right.

After expanding by 0.7% in the first quarter of the year, output struggled at the start of the second quarter, shrinking by 0.3% in April.

The damp performance is likely to continue, with economists expecting a 0.1% decline over the second quarter.

The dashboard is flashing warning signs.

The economic data for the start of the year was flattered by people bringing forward house purchases to beat the stamp duty holiday deadline as well as businesses racing to get orders out of the door to beat possible US tariffs.

Now that those temporary factors have faded away, we can better gauge the state of the economy. It makes for unpleasant reading.

A hobbled economy

More on Rachel Reeves

We are still being hobbled by low growth and high taxes, and the two are reinforcing each other.

In a more detailed breakdown, the ONS revealed that the services sector shrank by 0.4%.

Although economists were expecting consumer spending to hold up, businesses are gripped by a crisis of confidence, with higher national insurance contributions forcing them to put up prices.

This led to a drop in sales. At the same time, the legal sector also came crashing down to earth following a drop in house purchases.

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Reeves refuses to rule out tax rises

Consumers have less space than usual to absorb price rises, with utility bills on the up and general inflation proving persistent. Taxes are already at a generational high, and they could go higher if the economy disappoints.

The Chancellor Rachel Reeves‘s headroom against her fiscal rule is tight, with debt interest payments on the country’s debt eating into her room for manoeuvre.

A Reeves or a Trump problem?

The chancellor today pointed to factors outside of her control, hinting towards President Trump’s tariff policy.

Most of Britain’s problems are domestic ones – high government borrowing costs, rising cost of living pressures and higher taxation, but geopolitical forces have also conspired against us.

The production sector, which captures manufacturing, fell by 0.6%. This was driven by a 9.5% drop in the manufacturing of cars, with industry groups warning of a slump in export orders after Trump’s imposition of industry-wide tariffs at the end of March.

British officials are hopeful that the US will start lifting car tariffs this week after a deal was struck back in May, but it still hangs in the balance.

Even then, a new quota limits the scope for companies to grow in the US market. That’s bad news for the likes of JLR, the maker of Jaguars and Land Rovers.

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All this matters for a chancellor with a historically small fiscal headroom. Even small changes in the growth outlook could derail her plans, forcing further tax rises to pay for her spending plans.

She is betting big on investment in infrastructure- trains, nuclear power, social housing – but it could take many years for that to pay dividends, if it pays dividends at all.

In the meantime, the debt continues to grow as she borrows to fund those projects, putting further pressure on her budget to cover the interest payments alone.

It’s a painful feedback loop for the economy.

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Sentebale war of words continues as charity calls for clarity on commission’s probe into Prince Harry claims

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Sentebale war of words continues as charity calls for clarity on commission's probe into Prince Harry claims

The war of words over Sentebale is continuing, with the charity calling on the Charity Commission to provide clarity that its recent report did not specifically investigate claims of racism and misogyny against Prince Harry. 

Sources close to the Duke of Sussex claim they are “rehashing unsubstantiated allegations of bullying, misogyny and more”, describing their latest move as not “just provocative, it’s pitiful”.

A source at Sentebale has told Sky News: “We have written to The Charity Commission stating that the onus is on the commission to restate for the record that individual allegations of bullying have not been investigated or addressed in the commission’s report.”

It comes after the Charity Commission report stated that “based on the evidence provided and reviewed by the commission, it found no evidence of: widespread or systemic bullying or harassment, including misogyny or misogynoir at the charity”.

However, the commission added that it “acknowledged the strong perception of ill treatment felt by a number of parties to the dispute and the impact this may have had on them personally”.

But sources at Sentebale believe the reporting around this statement – that Prince Harry has been cleared of bullying – has been inaccurate, as the charity watchdog did not specifically look at allegations made by the chair, Dr Sophie Chandauka, including during an exclusive interview on Sky News.

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From March 2025: Charity chair’s bullying claims on Sky News

A source close to Prince Harry and the former board of trustees has hit back, and said: “It’s remarkable, just yesterday Ms Chanduaka was applauding the Charity Commission’s findings, yet today, after a flurry of unflattering headlines, she’s back on the warpath.

“Issuing yet another media statement only reinforces the commission’s criticism about using the press to air internal disputes.

“Rehashing unsubstantiated allegations of bullying, misogyny and more, which the commission found no evidence of and dressing them up as veiled threats isn’t just provocative, it’s pitiful.

“If Ms Chanduaka has genuine concerns, she should spell them out plainly or, better yet, redirect her energy toward something truly worthwhile, like raising money for the children Sentebale exists to support.”

It’s understood Prince Harry and his supporters have also been left unsatisfied by the scope of the report, including their concerns about money spent on consultants that was authorised by Dr Chandauka.

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Responding to Sky News, the Charity Commission said: “We have issued the charity with an action plan which sets out steps the current trustees need to take to improve governance weaknesses and rectify findings of mismanagement.

“We now urge all involved to put their differences behind them and allow the charity to focus on its work and beneficiaries”.

Their report, released on Wednesday, was highly critical of all parties for allowing their disagreement to play out so publicly and allowing it to severely impact the charity’s reputation.

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Bromley burglary: £500,000 worth of gold stolen from home

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Bromley burglary: £500,000 worth of gold stolen from home

Police have launched an appeal after £500,000 worth of jewellery was stolen from a house in southeast London.

The incident took place at a home in Bickley Road, Bromley, on 30 December last year.

Footage showed three men entering the property through a forced bathroom window.

The group, who entered the home at 5.40pm and left at 6.25pm, carried out the theft while the owners were home.

Pics: Met Police
Image:
Pics: Met Police

The Metropolitan Police have now shared images of the stolen jewellery in a new appeal for information.

No arrests have been made in connection with the burglary so far.

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Pics: Met Police
Image:
Pics: Met Police

Detective Constable Jamie White, of the Met’s South Area Command Unit, said: “While the monetary value of this theft is enormous, the sentimental value is priceless – with many of the pieces being passed down through generations of the family.

“Helpfully, a number of the pieces stolen are unique, so we are hoping that releasing these photographs will jog someone’s memory.”

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Three charged with showing support for Palestine Action

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Three charged with showing support for Palestine Action

Three people have been charged with showing support for Palestine Action after the group was banned as a terror organisation.

Two women and a man were arrested in Westminster following a protest in central London on 5 July, the Metropolitan Police said.

Jeremy Shippam, 71, of West Sussex, Judit Murray, also 71, of Surrey, and Fiona Maclean, 53, of Hackney in London, were charged with displaying an article in a public place, arousing reasonable suspicion they are a supporter of a proscribed organisation, under section 13 of the Terrorism Act 2000.

The trio are due to appear at Westminster Magistrates’ Court on 16 September.

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What’s happening to Palestine Action?

The charges come ahead of a planned protest in support of the group on Saturday afternoon in Parliament Square in London, which organisers expect more than 500 people will attend.

Defend Our Juries, which is organising the demonstration, said protests will continue until a High Court challenge over Palestine Action’s ban in November.

Commander Dominic Murphy, head of the Met’s Counter Terrorism Command, said: “Anyone who displays public support for Palestine Action, a proscribed organisation, is committing an offence under the Terrorism Act and can expect to be arrested and, as these charges show, will be investigated to the full extent of the law.

“These charges relate to three people arrested in central London on 5 July.

“We are also planning to send case files to the Crown Prosecution Service for the other 26 people arrested on the same day.

“I would strongly advise anyone planning to come to London this weekend to show support for Palestine Action to think about the potential criminal consequences of their actions.”

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The latest charges bring the total number of people charged with offences under the Terrorism Act related to Palestine Action to 10 across England, Wales and Scotland, Counter Terrorism Policing said.

Vicki Evans, senior national coordinator for Prevent and Pursue at Counter Terrorism Policing, said: “Our role is to enforce the law where we suspect offences to have been committed and we will continue to do so, without fear or favour.

“At this time, it remains illegal to be a member of or encourage support for the group Palestine Action. This legislation is specific to that group and does not interfere with the right to protest in support of the Palestinian cause.

“Operational plans are in place to ensure this right can be preserved over the coming days with protests expected in several major cities, including London.

“As well as robust plans to respond to activity in support of this proscribed group, resources are also in place to investigate offences that may be identified or reported following such events.”

More than 220 people have been arrested at protests across the UK in response to the proscription last month, as part of the campaign coordinated by Defend Our Juries, including on suspicion of membership of, inviting support for and showing support for Palestine Action.

The ban on the group came after two Voyager aircraft suffered around £7m worth of damage at RAF Brize Norton in Oxfordshire on 20 June.

Three days later, Home Secretary Yvette Cooper announced plans to proscribe Palestine Action, calling the vandalism “disgraceful” and saying the group had a “long history of unacceptable criminal damage”.

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