As MPs return to Westminster, Keir Starmer’s government is under pressure to regain momentum after a tumultuous summer. Recent YouGov polling puts Labour at just 20%, eight points behind Reform UK, highlighting the threat from Nigel Farage.
Chancellor Rachel Reeves faces a difficult budget amid a predicted £40bn spending gap, with tax rises on the table. Labour has ruled out income tax, NI and VAT increases, leaving options such as inheritance tax or capital gains tax on expensive homes. The budget may be delayed to November.
Internal divisions have plagued the government, with backbench rebellion over welfare cuts and pressure to recognise Palestine. Starmer has reshuffled his team, appointing a new chief economic adviser, and is expected to reshuffle junior ministers to improve delivery and manage relations with MPs.
Starmer also faces the diplomatic challenge of managing relations with US President Donald Trump. Trump, who has received a state visit invitation from the King, has publicly praised Starmer, but the relationship is being closely watched.
