On Wednesday, British Finance Minister Rachel Reeves outlined a strategic spending plan focused on health, defence, and infrastructure in an effort to stimulate economic growth and restore public confidence in the Labour government.
Presenting departmental budgets from 2026 to 2029 and investment frameworks through to 2030, Reeves emphasised that the government's fiscal priorities reflect the interests of "working people".
Reeves highlighted capital investments in housing, transportation, and clean energy as central pillars of Labour's reform agenda. However, with increased allocations for healthcare and defence, other departmental budgets are expected to face tighter constraints.
"These are the priorities of working people, investing in national security, the NHS, and economic growth to ensure a better standard of living", Reeves stated during a robust parliamentary session. She stressed that such choices were only possible due to a commitment to economic stability.
Her fiscal strategy, first introduced in the October budget, includes the largest tax hike in a generation and more flexible borrowing rules to support long-term investments. For Labour's ambitions to materialise, particularly in reviving public services and accelerating growth, the effects of these investments will need to show swiftly.
Under the new plans, departmental spending is set to rise by 2.3% annually in real terms, amounting to an additional £190 billion over what the previous Conservative administration had proposed.
A key initiative unveiled was a £39 billion, decade-long affordable housing programme, nearly doubling current annual investment levels. Reeves also pledged an extra £10 billion to support further home construction in England.
Despite Labour's electoral landslide last July, the party's popularity has waned, and Reeves' approval ratings have dropped, a decline linked to cuts in winter fuel assistance for the elderly and reductions in disability benefits. Though the government has since reversed some of those decisions, it continues to face pressure from the right-wing Reform UK party, led by Nigel Farage, which has recently outperformed Labour in local elections and gained ground in national polls.
Reeves defended her approach, stating: "In both the October and spring budgets, I made the necessary decisions to repair our economic foundations. We are beginning to see those efforts bear fruit".
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Start your day informed with AnewZ Morning Brief: here are the top news stories for the 2nd of January, covering the latest developments you need to know.
Democrat Zohran Mamdani officially took office as New York City’s mayor on Thursday, beginning his term with a public swearing-in ceremony on the steps of City Hall.
Russia and Ukraine have accused each other of targeting civilians during New Year attacks, as intensified fighting coincided with U.S.-led efforts to push both sides towards ending the nearly four-year war.
Dozens of people are feared dead and around 100 others injured after an explosion tore through a crowded bar during New Year’s Eve celebrations at the Swiss ski resort of Crans-Montana, authorities said.
At least 47 people were killed and 112 injured after a fire broke out at a crowded bar in the Swiss ski resort town of Crans-Montana during New Year’s Eve celebrations, Italian Foreign Minister Antonio Tajani told Italian media on Thursday.
India has approved a major arms deal with Israel valued at approximately $8.7 billion, highlighting the deepening defence partnership between the two countries.
Russian athletes will not be allowed to represent their country at the Milano Cortina Winter Olympics even if a peace deal is reached with Ukraine, International Olympic Committee President Kirsty Coventry said in an interview with an Italian newspaper.
India and Pakistan on Thursday exchanged lists of nuclear facilities as well as civilian prisoners, under long-standing bilateral agreements, according to official statements from both countries.
The United Nations on Friday voiced serious concern over the deteriorating humanitarian situation in Sudan, warning that rising violence is increasingly affecting civilians.
Ukrainian officials reported on Friday that thousands of children and their parents were evacuated from frontline areas in the Zaporizhzhia and Dnipropetrovsk regions as Russian forces continued to advance.
Yemen’s southern separatists have announced plans to hold a referendum on independence from the north within two years, a move likely to further escalate tensions as Saudi-backed government forces seek to retake territory seized by the group last month.
A 6.5-magnitude earthquake has struck the southern state of Guerrero in Mexico.
Suhail Shaheen, Afghanistan’s ambassador in Doha, has again urged the United Nations to transfer Afghanistan’s seat at the UN to the Taliban-led administration, arguing the current arrangement no longer reflects realities in the country.
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