UK chancellor Rachel Reeves seeks to close £40bn fiscal gap

At the moment’s agenda: Elon Musk’s Trump donation; Boeing’s struggles; US ultimatum on Israel; Saudi Arabia tightens purse; and Venice’s farm-to-table motion

Good morning. We begin with information that UK chancellor Rachel Reeves has recognized a £40bn funding hole forward of her Price range in two weeks — way over beforehand anticipated.

Why is the hole a lot bigger? The determine represents the funding that Reeves wants to guard key authorities departments from real-terms spending cuts, cowl the enduring influence of an annual £22bn overspend and construct up a fiscal buffer for the rest of the parliament.

How will it’s funded? The Monetary Occasions has been instructed by officers near the Price range course of that the Treasury is looking for methods of closing the shortfall, with tax rises set to kind the centrepiece of the chancellor’s response.

Reeves wants to boost taxes or discover financial savings — together with by welfare cuts — to satisfy a brand new “golden rule” that balances day-to-day spending with tax revenues. She has in latest weeks been warning that “troublesome selections” lie forward on tax, spending and welfare. Read the full report.

Step into the chancellor’s sneakers and see should you can run the UK financial system with the FT’s new Budget game.

Right here’s what else I’m conserving tabs on in the present day:

• Financial knowledge: The UK and Italy have September shopper inflation knowledge.

• Outcomes: Abbott, Alcoa, Equifax, Kinder Morgan, Morgan Stanley, Prologis, United Airways, US Bancorp and Whitbread report.

5 extra prime tales

1. Elon Musk has given practically $75mn to assist Donald Trump’s bid to win again the White Home. The Tesla and X proprietor made a number of multimillion-dollar donations in the course of the third quarter to his political motion committee, in line with a federal submitting launched yesterday, giving the group a huge budget to support Trump’s re-election bid.

2. Boeing has introduced plans to boost as much as $25bn in new capital and agreed a $10bn credit score facility. The transfer comes per week after S&P World Scores warned of a attainable downgrade of Boeing’s bonds to junk standing within the face of a crippling strike by its largest labour union. Read more on Boeing’s latest response to its troubles.

3. The US has instructed Israel it must take “pressing and sustained actions” to enhance the dire humanitarian state of affairs in Gaza or navy help from Washington may very well be in danger, in a uncommon public ultimatum to Benjamin Netanyahu’s authorities and an indication of rising frustration on the struggle’s civilian toll. Here’s what the US is demanding.

4. Unique: Brussels plans to develop its powers over merger offers as a way to cease “killer acquisitions” that pose dangers to start-ups in Europe and past, in line with folks conversant in the discussions. It could be the primary overhaul of the EU’s rule e book on mergers and acquisitions in a long time, however some officers are expressing concerns about the planned reforms.

5. Italian Prime Minister Giorgia Meloni has mentioned her authorities is planning to boost €3.5bn from banks and insurance coverage corporations because it seeks to plug a €9bn price range hole. Following a cupboard assembly final evening, Meloni wrote on X that the additional funds could be used to finance the general public well being system and enhance companies for these in want. Here’s why financial companies are in the crosshairs.

The Massive Learn

A frenzy of exercise led by Saudi Arabia’s Public Funding Fund has remodeled the as soon as conservative kingdom into one of many world’s largest building websites and a magnet for worldwide consultants and contractors. However after nearly a decade of the frenetic tempo, Riyadh is starting to scale down on the spending spree as a sense of realism and pragmatism takes hold.

We’re additionally studying . . . 

• NHS: The Labour authorities has promised to deliver the service into the digital age, however docs say the essential infrastructure first must be brought up to a minimum standard.

• Cheapflation: Costs of cheap items have risen sooner than dearer varieties. Governments and companies at the moment are trying to figure out who to blame, writes Brooke Masters.

• US politics: The brazenness of the nation’s politicians within the face of scandals is a defining function of the period. Ed Luce asks: has America lost its shame?

• 4 funding errors to keep away from: In his new column, Jonathan Guthrie takes a take a look at good and bad financial thinking.

Chart of the day

The Worldwide Vitality Company has mentioned that a large improve in using air-con, pushed by rising incomes within the creating world and better temperatures from local weather change, can have one of many biggest and most unpredictable impacts on the world’s electrical energy grids within the coming decade.

Take a break from the information

On the island of Sant’Erasmo within the Venetian lagoon, a pioneering co-operative based by native cooks has established a kitchen backyard to create jobs and save the distinctive flavours of vegatables and fruits utilized in dishes susceptible to disappearing. Here’s where to partake in the city’s farm-to-table revolution.

Extra contributions from Gordon Smith and Benjamin Wilhelm