Politics latest: Reeves to cut food costs and offer free children’s bus rides in cost of living package – UK Times

UK interest rates may have been cut twice this year were it not for the Iran war, the Bank of England’s chief has said, as he warned that potential supermarket price controls were “not sustainable” in the long run.

Bank governor Andrew Bailey told MPs on the Treasury Committee that inflation also may have fallen to its 2% target level last month but the energy shock was keeping the cost of living higher.

The conflict has been the “dominating change in the landscape” for the economy, he said.

Mr Bailey added: “It was a reasonable expectation prior to this all happening that we would probably cut once or twice this year, the market was pricing that.

“The market isn’t pricing that now and effectively that was taken off the table.”

You can’t sustain lower prices without going bust, writes James Moore:

New YouGov polling finds that 49% of Britons oppose loosening sanctions on Russian oil, compared to 19% who support it.

However, when asked which is the greater priority, more Britons say keeping fuel prices down (42%) than maintaining the strength of sanctions (32%).

Devising two terrible new policies in one day suggests Keir Starmer’s government has finally lost the plot, says John Rentoul:

Shoppers could save on the cost of biscuits and chocolate as part of a package of measures being set out by Rachel Reeves to ease the impact of the Iran war.

The Government is cutting import tariffs on more than 100 types of product in a move that is expected to save consumers more than £150 million a year.

The Chancellor also set out a “Great British Summer Savings” scheme, including free bus travel for children in England during the school holidays in August.

The free bus travel scheme will allow every child aged five to 15 in England to travel on participating local routes.

The Chancellor is committing more than £100 million to fund the free fares scheme and to support bus services facing increased costs.

Ms Reeves said: “My number one priority is protecting households from rising costs.

“This summer I want every family to be able to enjoy themselves, that’s why we’re launching the Great British Summer Savings Scheme, and why we’re helping kids with free bus travel throughout August.”

But the government is not expected to announce immediate help with rising energy bills.

Andy Burnham is backing Shabana Mahmood’s stringent efforts to crack down on immigration, his allies say – in an effort to win votes from Reform UK supporters.

The mayor of Greater Manchester reportedly wants to “reframe” the home secretary’s changes but backs her attempts to limit legal and illegal migration, according to sources in his team.

Next month’s by-election in Makerfield is expected to be a close contest between Mr Burnham and Reform UK, which made recent council gains in local elections.

Reform has previously dubbed him “open-borders Andy” but those close to his campaign have told The Guardian he will not want to dilute the government’s curbs on migration.

Home Office reforms to migration rules under Ms Mahmood include ending the right to permanent refugee status and new settlement rules for people who have come to the UK since 2021.

Wes Streeting is likely to give up his ambition to become Labour leader if Andy Burnham wins the Makerfield by-election, according to a report in The Times.

The former health secretary’s senior allies have said there is a growing feeling that “no one can beat Andy” if the mayor of Manchester, who is widely believed to be planning a leadership challenge against Sir Keir Starmer, finds his way back to parliament.

But another source close to Mr Streeting said this suggestions were “rubbish” and that he would stand in any leadership race.

Earlier, he warned Sir Keir during his resignation speech in the Commons that his government is losing the fight against nationalism, and that it risks “handing the keys of No 10” to Nigel Farage and Reform UK unless it changes course.

Mr Streeting said he had “no regrets” and “rebellious hope” after quitting the government last week and calling on Sir Keir to stand down.