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Kemi Badenoch, the Tory leader, has spoken out again over accusations the chancellor misled the public over the state of the nation's finances in the lead up to the Budget.

In an interview with the BBC, she says that "a lot of people made real decisions based on the false briefings which Rachel Reeves put out".

Badenoch explains that the chancellor's pre-Budget warnings that "hard choices" would need to be made led to people fixing mortgages, drawing pensions down and even leaving the country because of fears around taxes.

"Only for us to find out that that was not the case, she did not need to raise those taxes," she continues.

• Earlier on this morning, Badenoch accused Reeves of giving "false information deliberately" in order to get a "soft-landing" for her Budget

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Reform UK leader Nigel Farage has described the aftermath of the Budget as a "complete and utter shambles".

"There is no doubt now that Rachel Reeves did deliberately mislead the country, and by the looks of it, her own cabinet as well," he says.

All of it, Farage says, was as an excuse to raise taxes.

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Starmer is refusing to do the one thing that would boost growth the most, says Liberal Democrat leader Ed Davey.

Responding to the prime minister's speech this morning, Davey says "fixing our trade with the EU through a new customs union" is the "single biggest thing" that can achieve the growth Starmer has said he wants.

"The prime minister’s own economic adviser has reportedly told him that a customs union would be one of the most effective ways to boost growth – but it seems he ignored her," he says.

Davey adds that that the UK has a "£90bn Brexit black hole in the public finances" and that its time for the government to "take the Brexit blinkers off".

Budget speculation does affect your financial choicespublished at 12:33 GMT

12:33 GMT

Kevin Peachey
Cost of living correspondent

While the debate rages about knowing and sharing (or not sharing) economic data before the Budget, this much is clear: Budget speculation does affect people’s personal, financial choices.

Take savers as an example. There were plenty of rumours – which proved to be true – that the chancellor wanted to lower the annual tax-free allowance in a cash Isa.

Bank of England figures published today show savers paid £4.2bn into cash Isas in September, ensuring money was saved before any changes to Isas were made. (In fact, the reduced allowance won’t be until April 2027 and will only affect the under 65s.)

The impact on the housing market, however, is more difficult to judge because there are more variables in play.

Mortgage approvals were relatively steady through September and October, the Bank’s data shows. Comparisons with a year ago are tricky, not least because the Budget was nearly a month earlier in 2024.

With interest rates falling, some in the housing sector say activity should have picked up, but it was curtailed by Budget speculation this time around.

Some analysts expect the buying and selling of property to pick up in the new year, now the uncertainty is over.

David Wallace Lockhart
Scotland political correspondent

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Scotland's First Minister John Swinney has added his name to those who think that Rachel Reeves should resign.

He's of the view that the chancellor misled the public and the financial markets, and he now believes her position is untenable.

Relations between Scottish and UK ministers have been strained in recent weeks.

SNP politicians in Edinburgh had been demanding more clarity about income tax rises that were touted in advance of the UK Budget (tax rises that never materialised).

The recent accusations that Rachel Reeves overplayed the perilous state of the UK's finances seem to be the final straw for Swinney, who's now indicating the chancellor has no option but to step down.

Why, in my judgement, Reeves was misleading on one specific pointpublished at 11:57 GMT

11:57 GMT

Chris Mason
Political editor

Chancellor Rachel Reeves has been accused of lying and misleading you before her Budget last week.

It is my job, after a careful examination of the facts, to call it, on your behalf, in careful, precise language.

And in my judgement, on one specific element of what the chancellor and the Treasury told us before the Budget, we were misled.

Let's walk through this, step by step.

On Tuesday 4 November, the chancellor called an extraordinary pre-Budget news conference.

Reeves called that news conference because she wanted to prepare the ground for a big Budget full of difficult choices.

And let's be clear: much of what we heard from the chancellor in her breakfast speech that morning almost four weeks ago reasonably laid the ground for what was to come.

Crucially, she also talked about productivity, a measure of the output of the economy per hour worked.

The forecaster and watchdog, the Office for Budget Responsibility, was expected to revise down its estimate for productivity growth.

This decision by the OBR had big implications for Reeves – impacting the numbers, spreadsheets and therefore the calculations and trade-offs she would have to make. In isolation, that made things harder for her, without question.

In other words, nothing she said in that news conference was wrong.

But – and this is the key point – we now know she knew something then she didn't share with us that morning.

And that is that tax receipts were much better than expected and more than offset the reduction in productivity growth.

• Read the full analysis from Chris Mason here

Rachel Reeves has responded to claims she misled cabinet ministers about the Budget.

It comes after an unnamed Labour minister was quoted in the Times describing the handling of the Budget as "a disaster from start to finish".

Asked by the BBC why ministers were not told about the OBR's better than expected forecast ahead of the Budget, Reeves says: "You would never expect the prime minister and chancellor to go through all the detailed numbers.

"The cabinet are briefed on the morning of the Budget on the Budget numbers."

Reeves says while ministers are briefed on things that affect individual departments, the full details contained in the Budget are not supposed to be provided in advance.

Chronology is crucial - the OBR didn't change forecasts between 31 October and Budgetpublished at 11:43 GMT

11:43 GMT

Henry Zeffman
Chief political correspondent

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It was significant that Keir Starmer acknowledged overtly for the first time in the Q&A session we just heard that the government had strongly considered putting up the rates of income tax.

Doing so would not only have been a clear manifesto breach – as Starmer acknowledged this morning – but also would have made him the first prime minister to increase the basic rate in half a century.

Ultimately, he and Rachel Reeves decided not to. Starmer said that this was because "the numbers improved".

It is true that the numbers improved over the repeated rounds of the forecast through October.

However, there is an important point to make on the chronology. The OBR made no change to its forecasts between 31 October and the Budget on 26 November.

Reeves gave her speech strongly hinting at an income tax rise on 4 November, and did the same in an interview with BBC Radio 5 Live on 10 November.

We've just heard from PM Keir Starmer, who's been outlining plans to reform welfare and boost productivity - and also defending the Budget after a row about the chancellor's comments before it was delivered

Here's a flavour of what we've heard:

• Starmer says he's proud of the Budget and of scrapping the two-child benefit cap, which he says will lift 500,000 children out of poverty
• The PM says Rachel Reeves did not mislead the public about the Budget, adding that "it was inevitable that we would have to raise revenue" - after the OBR review showed an unexpected £16bn shortfall
• For the economy to grow, he says the government is removing barriers to business
• He outlines plans for a "productivity revolution", which he says will reform the welfare state and get young people back into work
• Starmer also says he wants to remove "unnecessary" barriers in the nuclear industry and develop trade relations with the EU

We'll be analysing some of Starmer's claims later in this page - stay with us.

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The Sun asks Starmer whether welfare spending is coming down and about measures for people who aren't contributing to the country's economy at all.

He says his government's plans are "asking everybody to contribute a little more" - but doesn't say how he will approach people who aren't contributing.

It's key that the government supports the "working poor" - families who work but don't make enough money to meet their bills - and children in poverty.

He says that's the right thing to do for children and the NHS. For the economy to grow, Starmer says that "every single person" needs to contribute to that.

The PM's speech and Q&A have now finished, stick with us as we bring you reaction and analysis.

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It's put to Starmer by the Times that Reeves did, in fact, mislead the public as she knew about the forecast £4bn budget surplus before her pre-Budget news conference in which she did not rule out an income tax rise.

Starmer reiterates that in the early stage of Budget planning it was important not to rule out any measures until the final decisions were made.

"To be told at the beginning of the process you're £16bn worse off than you might have otherwise been is a significantly difficult starting point."

The prime minister says he could have come out and said he had decided to not protect the NHS and cut its funding: "I wasn't going to do that."

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ITV's Robert Peston asks Starmer whether it's the chancellor's fault or his that preparations for the Budget were "shambolic".

Starmer defends the Budget, outlining the money to protect public services and the NHS. He highlights tackling waiting times, doubling the economic buffer - "fiscal headroom" - and lowering the cost of living as key things that the Budget was focused on.

This will help businesses by promoting "stability" and reducing "uncertainty", he says.

When asked about the EU, he says work is being done to rebuild relations after Brexit damaged the UK's economy - particularly to drive down supermarket costs.

Next is a question from Beth Rigby at Sky News. She also asks whether the chancellor misled the public in her pre-Budget speech on 4 November, referring to the OBR letter published on Friday.

"There was no misleading," Starmer says. He doesn't accept that the OBR productivity review showed the government had an "easy starting point", arguing that the review showed productivity had been revised down, leaving the government with £16bn less in revenue by 2029-30.

He then turns to the government's objectives in this Budget. He says he wanted to "more than double" the government's fiscal "headroom" - or buffer - while also helping with the cost of living.

Finally, Starmer turns to welfare reform, describing it as his "moral mission". He says he "can't leave the best part of a million young people not learning or earning".

Taking question from the press, Starmer is asked by the BBC's Chris Mason if Reeves misled the public by refusing to be "candid about what she knew" in her statements ahead of the Budget.

The prime minister says ahead of the budget an OBR review showed that there would be £16bn less than previously estimated.

He says the government had made commitments to protect the NHS and public services, cut borrowing costs and improve the cost of living.

"Therefore, against that backdrop, it was inevitable that we would have to raise revenue. So there was no misleading there."

The prime minister adds that there was a point where he and the chancellor thought they would have to go ahead with a manifesto breach "of some significance", but that it was not necessary in the end.

Image source, EPA/Shutterstock

Starmer next moves to address trade.

He says Britain must be positioned as an open trading economy.

"We must all now confront the reality, that the Brexit deal we have significantly hurt our economy," he continues.

So, Starmer says the country needs to be "grown-up" about the fact that we must be closer to the EU in order to reduce trade friction - as, he says, the country has done with the US and India.

The PM then rounds off his speech to applause. We'll listen in to his responses as he takes questions from journalists in the room.

Starmer starts to outline his plans for a "productivity revolution" in the UK to fix an economy "scarred by austerity, by Brexit".

First, he says there will be changes in the nuclear industry to remove "unnecessary red tape" and "fundamentally misguided environmental regulations" that make the UK the most expensive country to build nuclear power plants.

"For years Britain did not have a proper industrial strategy," he says, adding that this is key to rooting out "excessive costs in every corner" of the economy.

The second step is to reform the welfare state, Starmer continues. The welfare system has "trapped people in poverty," he says, and kept young people who are out of work in "a poverty of ambition".

He says more will be invested in apprenticeships and in making sure young people have guaranteed job offers or training.

Starmer now turns to economic growth.

"We're confident we can beat the forecasts," he says, claiming the government has "already beaten them this year".

He says that the government is removing barriers to business across the economy, and introducing measures to help entrepreneurs launch their businesses.

But the "most important things" the government can do for growth and business is to "drive inflation down" so that borrowing costs fall too, and to "retain market confidence".

"This is what the country needs most now – it is what the Budget secured," Starmer says.

For context: The OBR’s latest forecast shows GDP will grow by 1.5% in 2025, up from the 1% expected at the previous forecast in March. But from then on, the outlook has been downgraded - see below.

The prime minister says he's sick of hearing stories of some children turning up at reception "reading books and ready to learn" while others are "still in nappies".

He says that inequality at the age of four can be "baked in for life" and is likely to last a whole life.

"That's why everything we're doing for children is a game-changer for our potential," he says.

He adds that his government is giving every child the best start in life: "Every child equal at the starting line of their education."

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Starmer takes a moment to look back at the progress he says his government has made since Labour came to power.

The PM says that, in this time, ministers have cut borrowing faster than any other G7 country, cut the cost of living and increased wages and economic growth.

"That is a record to be proud of," he says, "and I am proud."

He says Britain is now "back on track", and next year "we will see the benefits of our approach", not just in national statistics but within communities themselves.

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