Today's inflation figures underscore that the economy is the biggest challenge facing Andy Burnham. It is only 42 days until John Healey's first Budget, and there is increasingly apparent concern at all levels of the government and Labour Party about how that Budget can - or, as it may prove, cannot - substantiate Burnham's rhetoric about offering the biggest change in British politics in 40 years. Much of the tricky economic environment, yes, is driven by global factors including the persistence, and to some degree worsening, of the conflicts in the Middle East and Ukraine. And the AI boom pushing up borrowing costs is another issue affecting many countries. But there are clearly domestic factors particular to Britain, and on that front it was very striking to hear the former Bank of England chief economist Andy Haldane telling LBC on Tuesday that without signs of cuts to public spending the markets now suspect that this is a traditional tax and spend socialist government with better TikTok videos.

The UK government is in discussions about joining a global investment bank, aimed at raising more money for defence spending. Chancellor John Healey is considering a bid to join the Defence, Security and Resilience Bank (DSRB), not long after his predecessor Rachel Reeves rejected the idea. Canada has been leading efforts to establish the bank, which supporters say would enable governments to borrow at lower costs to increase military spending. Treasury officials stressed that no decision has been made. A government spokesperson said it was fully committed to working alongside our international partners to scale defence industrial capacity.

Faisal Islam: Chancellor's attempts to boost vibes may limit tax rises The chancellor may have thought about shifting the venue of his first major speech this morning. It was an absolute and total coincidence that he chose to make it in the Coventry Manufacturing and Technology Centre (MTC), just a few minute's drive from the city's totemic HQ of Jaguar Land Rover (JLR). In the event, no one was pulling punches. The 4,000 office-based job losses at JLR were confirmed as John Healey answered questions a few miles away. Healey chose to lean into it as an example of the global turbulence against which the UK needs more resilience. The difference between this chancellor and his predecessor was he also feels that stressing fiscal discipline should instil confidence in consumers, businesses and investors, and not sap it away amid rolling fears of tax hikes.

The UK has been too complacent about the risk of foreign attack, the boss of Europe's biggest defence contractor BAE Systems has warned. Dr Charles Woodburn told the BBC in an exclusive interview that the level of threat was the highest he'd seen in his lifetime. He welcomed the recent boost to defence spending but said much more would be needed to hit the government's commitment to spend 3.5% of GDP on defence by 2035. He also warned we were not far from the use of autonomous lethal weapons by countries that may not follow the UK's policy of maintaining human control. In a rare interview, Woodburn told the BBC the reality of modern warfare had changed quite profoundly and that UK defence spending had to change with it.

The UK has said it will contribute drones, fighter jets and a warship to a joint mission aimed at safeguarding shipping in the Strait of Hormuz. Defence minister John Healey announced the package at a virtual summit of defence ministers on Tuesday. It includes autonomous systems to detect and clear naval mines, drone boats and Typhoon jets for air patrols. More than 40 other nations are involved in the mission, which Healey said would begin when conditions allow. For months Iran has been controlling the Strait of Hormuz - one of the world's busiest oil shipping channels - in retaliation for US and Israeli attacks.

British forces based in Iraq shot down two Iranian drones overnight, Defence Secretary John Healey has said. But some drones in the attack hit the coalition base in the Iraqi city of Erbil, the capital of the Kurdistan region, and injured a number of US troops. There were no British casualties. Brigadier Guy Foden said the base and another in the Iraqi capital of Baghdad were struck a number of times on Wednesday night and British personnel are currently in Erbil helping to defend that base. Since the US-Israeli strikes on Iran, US bases in Iraq have been targeted in retaliation.

The number of drone incidents near military bases in the UK has doubled in the last year, figures obtained by the BBC show. There were 266 recorded events involving drones in 2025, a rise from the 126 reported in 2024. Government sources have said that with some of those incidents they can't rule out hostile state actors. Defence Secretary John Healey said: The doubling of rogue drones near military sites in the UK in the last year underlines the increasing and changing nature of the threats we face. Military personnel do not currently have the legal power to shoot down drones, and instead rely on the police.

The UK lacks a plan to defend itself from military attack, a committee of MPs has warned. In a highly critical report, the defence committee says the UK is over-reliant on US resources and that preparations to defend itself and overseas territories in the event of attack are nowhere near where they need to be. The committee's chair, Labour MP Tan Dhesi, said: Putin's brutal invasion of Ukraine, unrelenting disinformation campaigns, and repeated incursions into European airspace mean that we cannot afford to bury our heads in the sand. It comes as the Ministry of Defence (MoD) identified parts of the country where six or more new munitions factories could be built. In June, Defence Secretary John Healey announced plans to move the UK to war-fighting readiness, including £1.5bn to support the construction of new munitions factories, which will be built by private contractors.

British soldiers will be granted new powers to shoot down drones threatening military bases. The plans, to be unveiled by Defence Secretary John Healey in a speech on Monday, are intended to allow troops to take faster, more decisive action. Four British airbases used by US forces reported mystery drone sightings last year, while drones have disrupted airspace across Europe a number of times in recent months. The new powers will only apply to military sites, but could be extended to civilian locations such as airports. Healey is set to announce the introduction of a kinetic option, first reported by the Daily Telegraph, that would enable British troops or Ministry of Defence (MoD) police to shoot drones posing a threat to a military site in the UK.

John Healey, the British defense secretary, tours a new military drone production facility in Swindon, U.K., on Sept. 15. Healey is reportedly set to authorize new powers to shoot down drones amid a rise in incursions. British troops will be given new powers to shoot down drones threatening U.K. military bases, the Telegraph reported on Sunday, citing an upcoming announcement on Monday from John Healey, the British defense secretary. Healey is expected to unveil his vision on how to protect Britain's most critical military bases in response to a growing threat posed by Russia, the newspaper said. Although the new powers will initially apply only for military sites, the British government was not ruling out working to extend those powers to other important sites like airports, the Telegraph said, citing a source.