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Rishi Sunak has said Jeremy Hunt will still be chancellor at the next election after criticism his number two did not have enough economic vision.

The prime minister, for the first time, confirmed to Sky News that Mr Hunt will remain chancellor when the next general election comes around in January 2025.

“Of course,” Mr Sunak said when asked by Sky News’ deputy political editor Sam Coates.

Mr Hunt was criticised by businesses following a keynote speech in January about the government’s plan to boost economic growth as they complained it offered no new policies.

The chancellor also signalled the upcoming spring budget, to be announced by him on Wednesday, will not contain big tax cuts – despite calls from some Tory MPs – because of the need to focus on curbing high inflation.

But Mr Sunak insisted the budget will deliver on the three economic pledges he set out when he became prime minister: to halve inflation, grow the economy and reduce debt.

“It’s important to get public sector pay settlements right, important to reduce debt to make sure we’re not passing on burdens for the next generation,” he said.

“It also ensures we’re reducing inflation and keeping interest rates low.”

Read more:

What to look our for in Jeremy Hunt’s first budget
UK to spend extra £5bn on military to counter China and Russia threats

Prime Minister Rishi Sunak on the deck of the decommissioned and now museum, USS Midway Aircraft Carrier in San Diego, during his visit to the US for meetings with US President Joe Biden and Prime Minister of Australia Anthony Albanese as part of Aukus, a trilateral security pact between Australia, the UK, and the US. Picture date: Sunday March 12, 2023.
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Mr Sunak on the deck of the decommissioned and now museum, USS Midway Aircraft Carrier in San Diego

Mr Sunak acknowledged that recent high interest rates have caused “damage” for banks, in reference to the UK arm of Silicon Valley Bank having to be rescued on Monday after its parent company in the US, SVB America, collapsed.

The PM said the government – and Mr Hunt – are focused on growing the economy in “the best way to provide jobs for people around the country”.

“That’s what the chancellor is going to deliver on Wednesday, what the government will deliver,” he added.

“People should be confident we’ve already delivered, we’ve brought about enormous improvement since I took over as prime minister last year and we’ll continue to deliver.”

Mr Sunak was speaking in San Diego where he is meeting US President Joe Biden and Australian PM Anthony Albanese as part of the AUKUS project to develop nuclear-powered submarines for the Australian navy.

He said the programme was not purely in reaction to the rising “systemic challenge” from China.

The PM told Sky News: “This partnership represents something much bigger.

“We’re building the next generation of attack submarines with world-beating technology that we will be able to share with each other.

“Not just in the Pacific, but the Atlantic and around the world, it’ll improve security around the world and provide jobs.”

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‘Nobody likes Trump’: Sky News finds defiance on the streets of Tehran

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'Nobody likes Trump': Sky News finds defiance on the streets of Tehran

To the sound of mournful chants and the slow beat of drums, they march, whipping their backs with metal flails.

It is an ancient ceremony going back almost 14 centuries – the Shia commemoration of Ashura.

But this year in particular has poignant significance for Iranians.

The devout remember the betrayal and death of the Imam Hussein as if it happened yesterday.

The Shia commemoration of Ashura in Tehran, 2025
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Iranians gather ahead of Ashura

The Shia commemoration of Ashura in Tehran, 2025

We filmed men and women weep as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.

The grandson of the Prophet Muhammad was killed by the armies of the Caliph Yazid in the seventh century Battle of Karbala.

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Shia Muslims mark the anniversary every year and reflect on the virtue it celebrates – of resistance against oppression and injustice. But more so than ever this year, in the wake of Israel and America’s attacks on their country.

The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here by people and officials.

The Shia commemoration of Ashura in Tehran, 2025
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Men and women weeped as they worshipped at the Imamzadeh Saleh Shrine

Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.

Iran believed it was making diplomatic progress in talks with America, which it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.

“Death to Israel” chants resounded outside the mosque in skies that for 12 days were filled with the sounds of Israeli jets.

There is a renewed sense of defiance here.

One man told us: “The lesson to be learned from Hussein is not to give in to oppression, even if it is the most powerful force in the world.”

I don't think about Trump. Nobody likes him," one woman tells Sky News
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‘I don’t think about Trump. Nobody likes him,’ one woman tells Sky News

A woman was dismissive about the US president.

“I don’t think about Trump. Nobody likes him. He always wants to attack too many countries.”

Pictures on billboards nearby link Imam Hussein’s story and current events. They show the seventh century imam on horseback alongside images of modern missiles and drones from the present day.

The Shia commemoration of Ashura
The billboard illustrates the 7th century imam on horseback alongside missiles and drones from the present day

Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.

Officially Iran is projecting defiance, but not closing the door to diplomacy.

Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.

“We are very strong in defence, and as state officials have announced, this time Israel will receive an even stronger response compared to previous times. We hope that Israel will not make such a mistake.”

Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again
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Dr Fatemeh Mohajerani said it would be a mistake for Israel to attack again

But there is also a hint of conciliation. Senior Iranian officials have told Sky News back-channel efforts are under way to explore new talks with the US.

Israel had hoped its attacks could topple the Iranian leadership. Those hopes proved unfounded. The government is in control here.

For many Iranians it seems quite the opposite happened – the 12-day war has brought them closer together.

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Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says

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Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says

Two American security workers in Gaza were injured after grenades were thrown during food distribution in Khan Younis, the Gaza Humanitarian Foundation (GHF) has said.

In a statement, the US and Israeli-backed aid group said a targeted terrorist attack was carried out at one of its sites in southern Gaza on Saturday morning.

The two Americans injured “are receiving medical treatment and are in stable condition,” it said, adding that the delivery of aid was “otherwise successful” and that “no local aid workers or civilians were harmed”.

GHF didn’t say exactly when the incident happened but claimed Hamas was behind the attack, adding: “GHF has repeatedly warned of credible threats from Hamas, including explicit plans to target American personnel, Palestinian aid workers, and the civilians who rely on our sites for food.

“Today’s attack tragically affirms those warnings.”

Later, the aid group posted a picture on social media, which it said showed “fragments of a grenade packed with ball bearings” that was used in the attack.

Asked by Sky’s US partner network, NBC News, whether the two injured individuals were responsible for handing out aid or were responsible for providing security, GHF said they were “American security workers” and “two American veterans.”

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The aid group did not provide specific evidence that Hamas was behind the attack.

The US and Israeli-backed group has been primarily responsible for aid distribution since Israel lifted its 11-week blockade of the Gaza Strip in May.

Read more:
Hamas gives ‘positive’ response to ceasefire proposal
Outcry as Israeli strike hits school
94 killed in Israeli strikes in Gaza, health staff say

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It comes after Sky News analysis showed GHF aid distributions are associated with a significant increase in deaths in Gaza.

According to Gaza’s health ministry, 600 Palestinians have been killed while seeking aid from GHF sites as of 3 July, which charities and the UN have branded “death traps”.

Meanwhile, the Associated Press has reported that Israeli-backed American contractors guarding GHF aid centres in Gaza are using live ammunition and stun grenades.

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Contractors allege colleagues ‘fired on Palestinians’

GHF has vehemently denied the accusations, adding that it investigated AP’s allegations and found them to be “categorically false”.

Israel’s military added that it fires only warning shots and is investigating reports of civilian harm.

It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.

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Hamas gives ‘positive’ response to ceasefire proposal but asks for amendments

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Hamas gives 'positive' response to ceasefire proposal but asks for amendments

Hamas has said it has “submitted its positive response” to the latest proposal for a ceasefire in Gaza to mediators.

The proposal for a 60-day ceasefire was presented by US President Donald Trump, who has been pushing hard for a deal to end the fighting in Gaza, with Israeli Prime Minister Benjamin Netanyahu set to visit the White House next week to discuss a deal.

Mr Trump said Israel had agreed to his proposed ceasefire terms, and he urged Hamas to accept the deal as well.

Hamas’ “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defence Forces inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.

But the source told Sky News: “Things are looking good.”

The mother of Anas Al-Basyouni mourns his loss shortly after he was killed while on his way to an aid distribution center, during his funeral at Shifa Hospital in Gaza City on Thursday, July 3, 2025. (AP Photo/Jehad Alshrafi)
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A woman cries after her son was killed while on his way to an aid distribution centre. Pic: AP/Jehad Alshrafi

Hamas said it is “fully prepared to immediately enter into a round of negotiations regarding the mechanism for implementing this framework” without elaborating on what needed to be worked out in the proposal’s implementation.

The US said during the ceasefire it would “work with all parties to end the war”.

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A Hamas official said on condition of anonymity that the truce could start as early as next week.

An Israeli army tank advances in the Gaza Strip, as seen from southern Israel. Pic: AP/Leo Correa
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An Israeli army tank advances in the Gaza Strip, as seen from southern Israel. Pic: AP/Leo Correa

But he added that talks were needed first to establish how many Palestinian prisoners would be released in return for each freed Israeli hostage and to specify the amount of humanitarian aid that will be allowed to enter Gaza during the ceasefire.

He said negotiations on a permanent ceasefire and the full withdrawal of Israeli troops from Gaza in return for the release of the remaining hostages would start on the first day of the truce.

Hamas has been seeking guarantees that the 60-day ceasefire would lead to a total end to the nearly 21-month-old war, which caused previous rounds of negotiations to fail as Mr Netanyahu has insisted that Israel would continue fighting in Gaza to ensure the destruction of Hamas.

The Hamas official said that Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.

Speaking to journalists on Air Force One, Mr Trump welcomed Hamas’s “positive spirit” to the proposal, adding that there could be a ceasefire deal by next week.

Palestinians dispersing away from tear gas fired at an aid distribution site in Gaza. Pic: AP
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Palestinians dispersing away from tear gas fired at an aid distribution site in Gaza. Pic: AP

Lian Al-Za'anin, center, is comforted by relatives as she mourns the loss of her father, Rami Al-Za'anin, who was killed while heading to an aid distribution hub, at the morgue of the Shifa Hospital in Gaza City, on Thursday, July 3, 2025. (AP Photo/Jehad Alshrafi)
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A girl mourns the loss of her father, who was killed while heading to an aid distribution hub. Pic: AP/Jehad Alshrafi

Hamas also said it wants more aid to flow through the United Nations and other humanitarian agencies, which comes as the UN human rights officer said it recorded 613 Palestinians killed in Gaza within a month while trying to obtain aid.

Most of them were said to have been killed while trying to reach food distribution points by the controversial US- and Israeli-backed Gaza Humanitarian Foundation (GHF).

The spokeswoman for the UN human rights office, Ravina Shamdasani, said the agency was not able to attribute responsibility for the killings, but added that “it is clear that the Israeli military has shelled and shot at Palestinians trying to reach the distribution points” operated by GHF.

Read more:
The man in the room acting as backchannel for Hamas in negotiations with US
GHF reacts to claims US contractors fired at Palestinians
Deaths in Gaza rise significantly when GHF distributes aid

Palestinians carry aid packages near the GHF distribution centre in Khan Younis. Pic: AP/Abdel Kareem Hana
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Palestinians carry aid packages near the GHF distribution centre in Khan Younis. Pic: AP/Abdel Kareem Hana

Ms Shamdasani said that of the total tallied, 509 killings were “GHF-related”, meaning at or near its distribution sites.

The GHF accused the UN of taking its casualty figures “directly from the Hamas-controlled Gaza health ministry” and of trying “to falsely smear our effort”, which echoed statements to Sky News by the executive director of GHF, Johnnie Moore.

Mr Moore called the UN figures a “disinformation campaign” that is “meant to shut down our efforts” in the Gaza Strip.

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