The UK may have no involvement in the US-Iran war, but the country is feeling the full force of the conflict on its economy. Soaring energy prices are set to dent growth in the short term, push up inflation and leave living standards in a grim place, according to the latest official forecast from the Office for Budget Responsibility (OBR). Interest rates are also predicted to rise, making borrowing more expensive, along with government debt repayments. Chancellor John Healey warned the nation faces real challenges ahead as he announced policies that he said would offer breathing space for households in the coming months. What we face today are global economic storms, he said.

Chancellor John Healey has announced his Budget, which includes changes to minimum wage and help for people trying to get onto the housing ladder. Here is how the Budget could affect you if you are under-25. If you are an 18-to-20 year-old earning the minimum wage, your pay will go up by 3.9% from next April. However, the increase may be lower than you had expected. That is because Healey reversed course on how his Labour predecessor, Rachel Reeves, had been increasing the minimum wage for young people.

Kevin Warsh, the Federal Reserve chairman, will explain the central bank's decision on rates, as energy prices and A.I. spending keep inflation uncomfortably high. Note: Data represents the lower, upper and midpoint of the federal funds target rate range. See more of our coverage in your search results. The Federal Reserve is expected to press pause on raising interest rates Wednesday after delivering an increase last month for the first time since 2023. Officials have signaled that the reprieve is likely to be temporary because they have more work to do to tame persistent inflation. But they have conveyed that there is no urgency to raise rates two months in a row. Recent inflation data has complicated that message. Price pressures appear to be accelerating, rather than moving toward the Fed's 2 percent target, a level that has been missed for nearly six years. Kevin M. Warsh, who took over as Fed chairman in May, has vowed to get inflation back to that level more quickly. Looming large over Wednesday's decision are next week's midterm elections. Officials insist elections don't factor in their deliberations, but the political backdrop has heightened scrutiny of Mr. Warsh. The Fed will release its rate decision at 2 p.m. in Washington. Mr. Warsh will hold a news conference at 2:30.

Healey's Budget needs to sustain the stronger economy through gathering clouds There have been almost no Budget leaks. The chancellor's aides are using intelligence-style security measures to guard its secrets: the Budget has been split into compartments with very few given access to all of them. The IT has been locked down and ministers viewing the plans have to sign a digital promise not to brief media. Such security is a response to the feeling that speculation around the last Budget, sometimes informed by insiders, was economically destabilising. As a recent former defence secretary, Chancellor John Healey has embraced such strict procedures, and has approached most of his public engagements and interviews with a sturdy refusal to break the Budget omertà, akin to his fellow Yorkshireman Geoffrey Boycott's at times ultra-defensive stance on a cricket pitch. The economic news has been good - growth has been better than expected and the International Monetary Fund has endorsed the UK for standing out among the G7 countries for at least planning to cut borrowing.

Chancellor of the Exchequer, John Healey, aims to harness the opportunities of AI to raise living standards and boost UK's economic growth. Chancellor of the Exchequer, John Healey, aims to harness the opportunities of AI to raise living standards and boost UK's economic growth. John Healey pledges to use budget to harness power of AI to bolster Britain's security Chancellor says government to commit hundreds of millions to develop'distinctively British' approach to AI John Healey has pledged to use Wednesday's budget to harness the power of artificial intelligence to bolster Britain's security and prosperity against the risks in the accelerating global technology arms race. As he prepares for his debut budget, the chancellor said that Andy Burnham's government would commit hundreds of millions of pounds to develop a "distinctively British" approach to AI that would capitalise on the benefits of the frontier technology. At a fork in the road as AI developments pose both existential threats and transformative economic potential, Healey said he would be making the biggest ever investment to guard against cyber risks and the disruptive potential of the technology.

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'In its most ambitious form, such a program would ensure that anyone who wants work is guaranteed a meaningful, decently paid job.' 'In its most ambitious form, such a program would ensure that anyone who wants work is guaranteed a meaningful, decently paid job.' We earn a commission if you buy something through an affiliate link. Is a job guarantee the solution to mass AI unemployment? In a preface to his book Capitalism and Freedom, the American economist Milton Friedman famously observed that a crisis can propel once-fringe ideas into the political mainstream. "Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around," he wrote.

Job vacancies in the UK have seen their largest fall since the start of the year as smaller businesses cut back on recruitment, official figures indicate. Vacancies fell by 21,000 in the three months to September to 691,000, according to the Office for National Statistics (ONS), which said small firms were citing labour costs as a key factor in scaling back hiring. Energy costs have risen since the Iran war began, and companies have also said that increases in National Insurance and the minimum wage have made it more expensive to employ staff. The ONS figures also showed the unemployment rate fell to 4.7% in the three months to August, down from the previous figure of 4.9%. Job vacancies fell to their lowest level in more than five years, the figures indicated, with the largest decrease in construction jobs.

How is the US economy really doing under President Trump? President Donald Trump has been boasting about the performance of the US economy ahead of the midterm congressional elections, claiming he has boosted incomes, reduced inflation and created jobs. Trump has repeatedly said: We have the hottest country anywhere in the world. While the overall US economy is faring better than many expected after Trump launched his sweeping Liberation Day tariffs in 2025, there's evidence those import taxes and the impact of the US-Israel war with Iran have pushed up inflation, with the harmful effects felt by most American households. The US economy is also being helped by an AI investment boom, and could falter if that spending were to dry up. So how does all this feel for the average American?

Faisal Islam: What I learned from a week with the world's top finance leaders When it comes to the future direction of the global economy there is a bit of a tug of war going on. There are starkly opposing forces. On the one hand holding back growth are the familiar, recurring crises from the energy shock, trade conflict and actual war. This is reflected most clearly in the sharply rising interest rate costs for the world's advanced economies. Pulling in the other direction is the boost from massive spending on AI, and the frankly astonishing resilience shown especially by smaller economies, as new routes for trade, including for oil and gas, have been established out of necessity.