Markets pummel UK AGAIN as businesses blame Labour: Ministers warned of ‘ruthless’ spending curbs as borrowing costs rise and Pound slides against dollar – with desperate Starmer saying AI can save Whitehall money [Video]

03:19 EST 13 Jan 2025, updated 04:22 EST 13 Jan 2025

The UK was battered by the markets again today as ministers were warned they must find ‘ruthless’ spending curbs.

The government’s borrowing costs rose further in early trading, while the Pound lost more ground against the dollar.

The grim signs came as businesses blame Rachel Reeves’ huge Budget tax raid for crushing economic growth.

CBI chief Rupert Soames said ‘confidence and trust’ had been ‘bruised’ by the Chancellor and firms will have to hike prices and cut jobs. 

Analysts have been warning that Ms Reeves – who is returning from a trade trip to China – will be forced to rip up her spending plans as a result of the backlash.

Treasury Chief Secretary Darren Jones has written to colleagues laying out the urgent need for efficiencies. 

Keir Starmer is giving a speech this morning in which he will insist mass deployment of AI can save the taxpayer huge sums.