Labour’s living standards squeeze

Homelessness minister Rushanara Ali resigns | Israel’s security cabinet approves full occupation of Gaza

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Friday, 8 August 2025 Good morning and welcome to From the Editor. The Bank of England has cut interest rates, but has also warned that the increasing price of food will limit its ability to make further reductions. Our business desk has found that the British population now faces a year-long squeeze in living standards. Hardly the reprieve Rachel Reeves was hoping for. And it doesn’t get much better for Sir Keir Starmer, either. Last night, his homelessness minister resigned over claims she removed tenants from a property before increasing the rent by hundreds of pounds. This is despite having previously vowed to “challenge unreasonable rent increases”. Elsewhere, Israel’s security cabinet approved plans to fully occupy Gaza last night. We have the latest for you below. I’d love to hear what you think of this newsletter. You can email me your feedback here. Chris Evans, Editor P.S. You can enjoy three months’ free access to The Telegraph. Cancel at any time.   Today’s headlines Homelessness minister Rushanara Ali resigns in evictions row Israel’s security cabinet approves plan to fully occupy Gaza Middle-class children ‘to be shut out of best schools’ in Labour equality crackdown Prince Andrew lost his virginity at 11, biography claims Reform’s Olympic champion mayor goes to war with his staff US soldier ‘leaked American military secrets to Russia’ Trump open to meeting Putin without Zelensky Free speech lives here Enjoy journalism that’s proud to share your values Enjoy three months’ free access to The Telegraph. Cancel at any time. Subscribe now   Bank of England cuts interest rates amid warning over Reeves tax rises The Bank of England cut interest rates to four per cent as it warned Rachel Reeves’s tax raid was driving up prices in shops. Andrew Bailey, the Bank’s governor, warned that surging food prices would limit its ability to keep cutting rates, meaning borrowing costs would remain higher for longer. While the drop in rates from 4.25 per cent was widely anticipated, an unprecedented split saw Mr Bailey force the Monetary Policy Committee to vote twice after a deadlocked initial vote. Below, Szu Ping Chan, our Economics Editor, and Tim Wallace, the Deputy Economics Editor, take a closer look at what this means for the Chancellor. Szu Ping Chan and Tim Wallace Economics Editor, Deputy Economics Editor   Rachel Reeves was hoping for a helping hand from the Bank of England. The Chancellor was facing the daunting prospect of finding as much as £50bn to balance the books, and lower borrowing costs would give her a much-needed break. On Thursday, Ms Reeves lauded the fifth interest rate cut since Labour came into power, which reduced borrowing costs to four per cent. Yet the announcement came with a sting in the tail. Andrew Bailey and his colleagues at the Bank said that the scope to cut rates further looks limited. Prices are rising fast and Threadneedle Street fears inflation could spiral out of control without firm action. It will soon be four per cent – twice the Bank’s target of two per cent. Markets’ expectations of a long series of interest rate cuts are fading, and with them the Chancellor’s hopes of a bailout from the Bank. Worse still, policymakers placed the blame for the economy’s predicament squarely at the Chancellor’s door. The raid on employers’ National Insurance contributions, the latest jump in the minimum wage and even the revamped packaging tax are all forcing up living costs, particularly for food and drink. The Bank warned the cost of the weekly shop would keep rising for the rest of the year amid a “challenging constellation” of weaker pay growth and higher inflation. As a result, the Bank said, living standards now face a year-long squeeze under Labour – before any possible tax rises in the autumn. That final point may be the most politically challenging for the Government, after Sir Keir Starmer pledged to deliver an improvement in living standards under Labour. Sources close to Ms Reeves insisted she was on the side of working people. The Conservatives, meanwhile, said the public were paying the price for “Labour’s jobs tax and reckless borrowing”. Read the full story here ➤   Opinion and analysis   David Frost Brexit negotiator, Tory peer & Telegraph columnist Brexit has been a success. Labour are slowly killing it Continue reading ➤     Judith Woods Telegraph columnist Prince Harry should follow Diana’s example and use his power for good Continue reading ➤     Sam Ashworth-Hayes Leader Writer and Columnist Australia proves we don’t have to suffer under the NHS Continue reading ➤   Get the full experience Unlock our award-winning website, app and newsletters Enjoy three months’ free access to The Telegraph. Cancel at any time. Subscribe now   Must reads ‘They’re taking land from hard-working people’: The victims of Labour’s war on allotments Thirty years on, Jonathan Edwards’s world record still stands – this is how he did it ‘I quit my GP career to look after my terminally ill husband’ The right way to eat toast – according to an etiquette expert ‘I paid £30 to see broken, one-eyed dinosaurs. Family days out are a rip-off’     The best of the Telegraph   ‘I had an onion thrown at me’: The 10 most unfriendly cities on Earth, according to our writers The city break has taken over as the holiday of choice for many, promising a fleeting taste of another culture. Your chosen destination is not always guaranteed to be kind to its visitors, though. In this article from June, 10 Telegraph Travel writers recall their experiences in the most unfriendly cities in the world, from lively anti-tourism protesters in Amsterdam to dealing with “granite-faced” hospitality staff in New York. What really makes this piece sing, however, is all the input it sparked from Telegraph readers on the Your Say page and in the comments below. Continue reading ➤   Discuss Every day, our journalists discuss the day’s biggest issues with subscribers on our app and on our website. Today, Ross Appleyard responds to a subscriber comment on his column: My ‘mankeeper’ wife always wants me to share my feelings. Why can’t she just leave me alone? Patrick McGill I was a serving police officer for 30 years – I frankly would not and will not share my experiences with my wife. I’ve buried mine deeply and will not share under any circumstances. I get little sympathy when ranting at the TV and paper about how inept and useless they have become. She has never ‘lived it’, hence would never understand it.   Ross Appleyard Completely agree, Patrick. It is not just the sharing aspect. It is the ‘unburdening’. By definition, if you unburden something, you are handing it over to someone else, ie your spouse. There were things I saw in my career that I would not or could not put on TV news because it would be too upsetting for the viewer. The same applies to shared memories. Coming up today At 10am, David Frost will be responding to your thoughts on his article: Brexit has been a success. Labour are slowly killing it.   Make your voice heard Join our journalists in conversation on today’s biggest topics Enjoy three months’ free access to The Telegraph. Cancel at any time. Subscribe now   Listen Click below to enjoy one of our agenda-setting podcasts   Puzzles Find as many words as you can in today’s Panagram, including the nine-letter solution. Visit Telegraph Puzzles to play a range of head-scratching games, including PlusWord, Sorted, and Quick, Mini or Cryptic Crosswords.   The solution to yesterday’s clue was REPECHAGE. 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