The National Institute of Economic and Social Research (Niesr) warned that UK Prime Minister Andy Burnham has no scope to increase borrowing and must raise taxes or cut spending to fund his pledges on defence and cost of living. Niesr forecasts inflation to peak at 3.8% by February 2027 and interest rates to remain unchanged until 2028, citing persistent inflation from the Iran war. The think tank also highlighted potential reforms to welfare, pensions, council tax, and VAT exemptions, and warned that breaking manifesto promises on income tax may be necessary.

The European Commission has proposed a compromise on university tuition fees for EU students in the UK, suggesting they pay more than domestic students but less than other international students. This move aims to break a deadlock in post-Brexit reset negotiations, which also cover agri-food trade, emissions trading, and youth mobility. The UK's new Prime Minister Andy Burnham has yet to engage fully, and a summit to finalize agreements was postponed, with a new date expected in October or November. The summit originally scheduled for July was postponed following Starmer's resignation, and a new date is expected in October or November. UK's new EU relations minister Hamish Falconer has spoken with EU Trade Commissioner Maroš Šefčovič.

Background: The UK Government had offered Chinook helicopters and standby troops to assist with the Cairngorms wildfire. Today, the Scottish Government declined that offer, stating that the specific need was for waterbombing helicopters, which it claimed the UK military does not possess. Scottish Justice Secretary Neil Gray publicly highlighted this capability gap, leading to accusations of a political stunt. The UK does have waterbombing capability via RAF Akrotiri in Cyprus, raising questions about homeland resilience. The Scottish Government's decision and Gray's remarks have sparked debate over the adequacy of UK military resources for domestic emergencies, with critics pointing to the existing waterbombing assets stationed overseas.

The Aslef union is putting the rail industry on notice over the failure of train operators to provide adequate toilet facilities and breaks for drivers, a year after the Office of Rail and Road (ORR) mandated improvements. Drivers report resorting to using bottles in cabs, leading to health risks and dehydration. The union warns of potential industrial action if progress is not made, highlighting a broader welfare issue across the rail industry. The ORR's annual report notes progress has been uneven and industry momentum has slowed. Ballots are under way for drivers at LNER and Avanti, while RMT members at East Midlands railway will strike on 1 August over issues with new trains. Unite union is also campaigning for better toilets for bus and lorry drivers.

The UK government announced a new bursary of up to £4,500 per year for families on benefits whose children start apprenticeships, funded by a £30m pot from the growth and skills levy. The measure aims to offset benefit losses that currently discourage apprenticeships, addressing the rising number of young people not in education, employment, or training (NEET). The opposition criticised the funding as uncosted.

Royal Fleet Auxiliary personnel have accepted a new pay offer including a 4.5% rise backdated to April 2025 and a further 3.6% from April 2026, along with improved leave arrangements and a one-off payment. The deal aims to improve recruitment and retention as the RFA prepares to crew new Fleet Solid Support Ships.

The UK Government Commercial Agency has established a framework for military-grade tactical communications systems worth approximately £8 billion, covering services, systems, and components. The framework, running until 2034, admits 68-74 suppliers per lot, including major defence primes and IT firms, with individual contracts awarded through competition.

Police Scotland has urged the public not to fly drones near the Cairngorms wildfires, warning that they could interfere with helicopter water-bombing operations. No formal air restrictions have been imposed, but the appeal highlights the risk of collisions and operational disruption during the multi-agency firefighting response, which has involved military aerial support.