Deals

Market Impact

The deal is significant as it marks the first time that a former phone monopoly in a major European country is divesting its landline grid.

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Sir Keir Starmer will warn that difficult times lie ahead for the UK as he tries to tackle an array of deep-seated challenges facing his government, but will insist that tough decisions taken now will lead to “national renewal”. 

He will say on Tuesday there are “no easy answers” and “no false hope” as he issues a stern message in his first speech as UK prime minister to the annual Labour party conference in Liverpool. 

Starmer will describe a country in which there are “decimated public services leaving communities held together by little more than goodwill”.

But he will argue that despite tight public finances his government can deliver a brighter future and “open the door to national renewal”, enabling the rebuilding of Britain.

Starmer has enjoyed only a brief honeymoon as the UK’s first Labour prime minister since 2010 and now faces falling poll ratings and infighting within his administration.

Last week saw damaging revelations about donations of clothing worth thousands of pounds made to Starmer, his wife, deputy leader Angela Rayner and chancellor Rachel Reeves during a cost of living crisis.

Starmer will try to reassure delegates in Liverpool — and the wider public — that the government is already taking steps to change the country.

He will cite planning reforms, settling the doctors’ strike, new solar projects, new offshore wind farms, an end to one-word Ofsted judgments, a ban on MPs’ second jobs, a new “border security command”, a ban on no-fault evictions and legislation to nationalise the railways. “And we’re only just getting started,” he will say.

The Labour leadership is drawing up a Budget and spending review next month, which are likely to include tax rises and continuing constraints on public spending given the country’s high levels of debt.

Starmer will say that ministers will have to rely on innovative reforms rather than turning on the spending taps.

“I have to warn you, working people do want more decisive government. They do want us to rebuild our public services and they do want that to lead to more control in their lives. But their pockets are not deep — not at all,” he will caution. “So we have to be a great reforming government.”

The Labour leadership has been walking a tightrope between warning that public finances are eye-wateringly tight while also offering a glimmer of hope for the future.

Ministers have claimed to have found a fiscal “black hole” of about £22bn that needs to be plugged — leading to predictions of tax rises and spending cuts. 

“The politics of national renewal are collective. They involve a shared struggle. A project that says, to everyone, this will be tough in the short term, but in the long term, it’s the right thing to do for our country. And we all benefit from that,” Starmer will say. 

Labour delegates will on Wednesday vote on a motion calling for the government to reverse its cuts to the winter fuel allowance, an issue that has prompted criticism from unions, charities and many of the party’s own MPs.

The prime minister will repeat his five priorities of higher economic growth, a better NHS, stronger borders, more opportunities for children and clean energy from low-carbon sources. 

He will also touch on how he dragged the Labour party towards the political centre ground from its previous, more left-wing incarnation under former leader Jeremy Corbyn.  

“I changed the Labour party to restore it to the service of working people. And that is exactly what we will do for Britain. But I will not do it with easy answers. I will not do it with false hope,” he will say. 

Sir Keir Starmer will warn of a “shared struggle” ahead but say there is “light at the end of the tunnel” for the country, in his first speech to the Labour Party conference as prime minister.

The PM will say “tough” decisions need to be taken now to “build a new Britain”.

Since winning power, the Labour government has painted a bleak picture of the public finances – but in his speech the PM will seek to present a more positive vision for the future.

However, he is facing anger from unions and many Labour members over the decision to cut winter fuel payments for millions of pensioners.

A row over donations to Sir Kier and other Labour ministers has also dampened the mood of the conference in Liverpool – which is taking place less than three months after the party’s landslide election victory.

In his speech, Sir Keir will promise a future of “national renewal”.

“The politics of national renewal are collective. They involve a shared struggle,” he will say.

“A project that says, to everyone, this will be tough in the short term, but in the long term – it’s the right thing to do for our country.

“And we all benefit from that.”

Echoing the message his Chancellor Rachel Reeves gave in her speech on Monday, Sir Keir will say that “if we take tough long-term decisions now” there will be “light at the end of the tunnel”.

However, he will warn against “easy answers” and offering “false hope”.

Labour has accused the previous Conservative government of leaving a £22bn “black hole” of unfunded spending commitments in the public finances – something the Tories have disputed.

Sir Keir will repeat the claim in his speech, saying the Tories have also “decimated public services, leaving communities held together by little more than goodwill”.

But he will warn the pockets of working people “are not deep” and public services will need “reform” as well as investment.

“Just because we all want low taxes and good public services, does not mean that the iron law of properly funding policies can be ignored,” he will add.

Labour has repeatedly promised it will not raise taxes on “working people”, including VAT, National Insurance and income tax.

However, the chancellor has already said she will have to raise some other taxes in October’s Budget because of the state of the public finances.

The government has also blamed the £22bn black hole for the decision to cut winter fuel payments.

A debate and non-binding vote on the issue had been expected on Monday but could now take place on Wednesday, when many activists will have left the conference.

Unite, which is among the trade unions calling for the cut to be reversed, branded the delay an “outrage”.

Business & Finance

Market Impact

The move, applicable in Canada and the United States, comes after BMO’s bad debt provisions in retail trade surged to C$81 million ($60 million) in the quarter ended July 31 compared with a recovery of C$9 million a year ago, in a sign of growing stress consumers face from a rapid rise in borrowing costs. 

Monday was the bloodiest day in Lebanon since Hezbollah’s 2006 war with Israel.

Israel launched a massive series of air strikes this morning that have so far killed 492 people according to the Lebanese government and the Israelis are warning of more attacks to come.

The war is escalating fast, a process that is being driven by the scale of Israel’s air offensive.

They are warning civilians to leave the areas they’re targeting. The next, they’ve said, will be the Bekaa Valley in the north-east of Lebanon which is a Hezbollah stronghold.

Even before the current escalation, well over 100,000 Lebanese had to leave their homes because of Israeli strikes, with no immediate expectation of being able to return.

We are seeing yet another very large escalation by the Israelis.

Perhaps their calculation is that they believe Hezbollah is in such a weakened position right now that this is their opportunity to really inflict some damage on it, and to change the strategic picture in the hills and towns on either side of the border between Israel and Lebanon.

While the Israeli-Hezbollah conflict has been going on for decades, the current war between them started the day after the Hamas attacks on 7 October last year.

Hezbollah started a limited but continuous campaign of rocket fire over the border, trying to tie down Israeli troops and damage Israeli property and people. Around 60,000 Israelis have been forced to evacuate to the centre of the country. In the last few days, returning them to their homes has been added to Israel’s list of war aims.

The US and UK, and other allies – and critics – of Israel believe that the only hope of cooling this dangerous crisis is to get a ceasefire in Gaza.

Hassan Nasrallah, the leader of Hezbollah, has said attacks on Israel will go on until a Gaza ceasefire happens. But it seems pretty clear at this point that neither the leader of Hamas nor the leader of Israel is prepared to go for the deal the US has put on the table.

The war itself has overwhelming support from Israelis, although Prime Minister Benjamin Netanyahu remains unpopular with significant parts of Israel’s electorate, despite an improvement in his poll ratings.

Many Israelis also think Netanyahu is an appalling leader who tells lies and has abandoned the hostages in Gaza. So he is a very controversial character, but bolstered in the parliament by the right wingers who support him, he is politically secure.

His decision to go on the offensive is risky.

While Hezbollah is wounded, it has plenty of capacity to hit back. And that is why Israel’s friends and enemies are still preparing for the worst.