UK is 'Broke and Broken,' New Government Says

Rowers train during warm summer weather on the River Thames at Isleworth in London, Britain, July 28, 2024. REUTERS/Toby Melville
Rowers train during warm summer weather on the River Thames at Isleworth in London, Britain, July 28, 2024. REUTERS/Toby Melville
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UK is 'Broke and Broken,' New Government Says

Rowers train during warm summer weather on the River Thames at Isleworth in London, Britain, July 28, 2024. REUTERS/Toby Melville
Rowers train during warm summer weather on the River Thames at Isleworth in London, Britain, July 28, 2024. REUTERS/Toby Melville

Britain’s new left-leaning government said Sunday that the nation is “broke and broken,” blaming the situation on its predecessors ahead of a major speech on the state of the public finances that is widely expected to lay the groundwork for higher taxes.
In a sweeping assessment three weeks after taking power, Prime Minister Keir Starmer’s office professed shock at the situation they inherited after 14 years of Conservative Party rule, while releasing a department-by-department analysis of the perceived failures of the previous government.
The critique comes a day before Treasury chief Rachel Reeves is expected to outline a 20-billion-pound ($26 billion) shortfall in public finances during a speech to the House of Commons.
“We will not shy away from being honest with the public about the reality of what we have inherited,’’ Pat McFadden, a senior member of the new Cabinet, said in a statement. “We are calling time on the false promises that British people have had to put up with and we will do what it takes to fix Britain,” The Associated Press quoted him as saying.
Starmer’s Labour Party won a landslide election victory earlier this month following a campaign in which critics accused both major parties of a “conspiracy of silence” over the scale of the financial challenges facing the next government.
Labour pledged during the campaign that it wouldn’t raise taxes on “working people,” saying its policies would deliver faster economic growth and generate the additional revenue needed by the government. The Conservatives, meanwhile, promised further tax cuts in the autumn if they were returned to office.
As proof that the previous government wasn’t honest about the challenges facing the country, Starmer’s office pointed to recent comments from former Treasury chief Jeremy Hunt confirming that he wouldn’t have been able to cut taxes this year if the Conservatives had been returned to power.
Those comments came in an interview with the BBC in which Hunt also accused Labour of exaggerating the situation to justify raising taxes now that they’ve won the election.
“The reason we’re getting all this spin about this terrible economic inheritance is because Labour wants to raise taxes,” Hunt said on July 21. “If they wanted to raise taxes, all the numbers were crystal clear before the election. ... They should have levelled with the British public.”
The government on Sunday released an overview of the spending assessment Reeves commissioned shortly after taking office. She will deliver the complete report to Parliament on Monday.
Those findings led the new government to accuse the Conservatives of making significant funding commitments for this financial year “without knowing where the money would come from.’’
It argued that the military had been “hollowed out’’ at a time of increasing global threats and the National Health Service was “broken,’’ with some 7.6 million people waiting for care.
And despite billions spent to house migrants and combat the criminal gangs ferrying migrants across the English Channel on dangerous inflatable boats, the number of people making the crossing is still rising, Starmer’s office said. Some 15,832 people have crossed the Channel on small boats already this year, 9% more than during the same period in 2023.
“The assessment will show that Britain is broke and broken — revealing the mess that populist politics has made of the economy and public services,” Downing Street said in a statement.
The quandary the government finds itself in should be no surprise, said Paul Johnson, the director of the Institute for Fiscal Studies, an independent think tank focused on Britain’s economic policies.
At the start of the election campaign, the institute said that the UK was in a “parlous fiscal position” and the new government would have to either raise taxes, cut spending or relax the rules on public borrowing.
“For a party to enter office and then declare that things are ‘worse than expected’ would be fundamentally dishonest,” the IFS said on May 25. “The next government does not need to enter office to ‘open the books.’ Those books are transparently published and available for all to inspect.”



Saudi Energy Minister Says Kingdom Remains Reliable, Flexible Supplier

Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman al-Saud attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman al-Saud attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
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Saudi Energy Minister Says Kingdom Remains Reliable, Flexible Supplier

Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman al-Saud attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman al-Saud attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)

Saudi Energy Minister Prince Abdulaziz bin Salman seized the spotlight at a high-level dialogue session held during the 2026 St. Petersburg International Economic Forum, breaking a strategic silence that had become a focus of questions and a gauge for global market expectations.

Speaking on Thursday, he delivered carefully calibrated messages to the energy sector, stressing that the world urgently needs stability in energy markets and declaring with confidence that the Kingdom is a flexible energy supplier, was, and will remain so under all circumstances.

In his remarks during a special session at the forum, where the Kingdom is taking part as “main guest of honor” as the two countries mark the centenary of diplomatic relations, Prince Abdulaziz acknowledged that current geopolitical events in the Middle East were distracting attention and obstructing focus on Saudi Arabia’s strategic priorities, foremost among them the goals of Vision 2030.

He described the situation as a source of considerable frustration.

Even so, he sent a strong message of reassurance to global markets, saying in a firm tone that it was their duty, and that of every Saudi citizen, to defy this difficult environment and continue to pursue their ambitions.

The Kingdom has the capability and confidence to address challenges and demonstrate its economic and operational resilience, he added.

He pointed to what he described as the success of Saudi Arabia’s infrastructure and logistics system in turning tragedies into opportunities, and in managing the Hajj season with unprecedented success despite the surrounding regional turmoil.

On the partnership with Moscow, the Saudi Energy Minister announced the signing of 30 new cooperation agreements between the private sectors in the two countries across fields including industry, education, tourism, and energy.

Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman al-Saud attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)

Prince Abdulaziz said the Kingdom will sign agreements across various fields and that there are no limits or restrictions on joint cooperation.

He added that the strategic mindset in Riyadh and Moscow had moved beyond being merely “producers of oil or gas” to “manufacturing and supplying energy in its comprehensive sense,” including hydrocarbons and the export of electrons.

In an explanation of his earlier position, which had kept oil traders on edge, Prince Abdulaziz said he had deliberately remained silent during the period that witnessed one of the most severe global energy crises.

A minister is required to maintain his composure and not panic, because panic makes a person lose control of the narrative, he explained.

He moved on to express his intention to maintain silence, because silence amid many unknowns is a message and a humble acknowledgment that reality is changing quickly, and is a form of respect for oneself and for others.

He concluded his assessment of current market conditions with a pointed remark reflecting the scale of uncertainty clouding the global scene.

“The situation we’re going through now does make a point here, which is the world needs every molecule of energy, and every form of stabilization to this energy, because without energy security, you will lose sustainability,” the Saudi minister said.

“There are so many moving parts, there are so many unknowns, there are things that you think have become a reality, but then you wake up in the next morning and the reality is no longer a reality.”

Novak says the market faces a 12 million barrel shortfall

For his part, Russian Deputy Prime Minister Alexander Novak described the current crisis in the international oil market as unprecedented, with no parallel even in the 20th century.

Novak said Russia would deal with the Western sanctions imposed on it with flexibility and complete calm, given its position as a key supplier of energy resources to the international market.

He warned of a large, hidden shortfall in global supply, estimated at about 12 million barrels per day that are currently not reaching the market.

He said global markets had not yet felt the full impact of the energy crisis caused by the Middle East conflict because the situation was being managed through withdrawals from surplus reserve inventories.

Novak cautioned that if the conflict continues and Gulf states delay increasing production, the market will face an acute and immediate physical shortage of supplies within a few months.

In his analysis of the producers’ alliance, Novak stressed that the OPEC+ agreement remains a key driver of energy market direction.

He said its members control more than 50% of global production and more than 40% of total exports, adding that the agreements have proven highly efficient at curbing volatility and reducing market fluctuations.

Novak said current data gave countries an opportunity to accelerate compliance, describing the existing approach as a “standard and normal course” that allows countries that had previously exceeded their quotas for any reason to implement compensation plans for their earlier overproduction more quickly.

On Russia, Novak said technical analytical calculations to determine Russia’s maximum production ceiling are continuing in cooperation with the companies concerned, and would be discussed with partners by the end of 2026.

He expected Moscow to effectively reach its assigned production levels this year under the agreed quotas, despite current output being slightly lower than at the start of the year because several refineries were undergoing “emergency and unscheduled maintenance.”

Expectations of strong demand

OPEC Secretary General Haitham Al Ghais said the organization expects robust oil demand growth and would not change its estimates despite the conflict in the Middle East and the closure of the Strait of Hormuz.

“Despite all the commentary out ⁠there that oil demand is declining, we have not registered signs of that yet,” Al Ghais said.

“We still see robust demand growth at 1.2 million barrels a day for this year,” he said.

He also said investment in the oil sector should not be affected by "one-off events" that may occur anywhere in the world.

Egyptian Minister of Petroleum and Mineral Resources Karim Badawi told the session that renewable energy is a top priority to reduce dependence on natural gas. He said Egypt is working hard to increase electricity generation from wind and hydropower to secure a sustainable energy mix.

Markets hold their breath before the Sunday marathon

The remarks made at the forum on Thursday carry major significance as a prelude and practical indicator of the direction of leading producers ahead of decisive oil-related meetings next Sunday.

That day will see three consecutive meetings, beginning with OPEC’s administrative conference, followed by the 66th meeting of the Joint Ministerial Monitoring Committee, or JMMC, which is responsible for monitoring compliance levels, consensus, and the approval of current compensation plans.

Investors are closely watching the 41st ministerial meeting of the OPEC+ alliance. Informed sources said the alliance is likely to approve an additional gradual increase in its targets for next July.


OPEC Secretary General: Oil Demand to Remain Robust, No Change to Estimates

OPEC Secretary General Haitham Al Ghais attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
OPEC Secretary General Haitham Al Ghais attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
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OPEC Secretary General: Oil Demand to Remain Robust, No Change to Estimates

OPEC Secretary General Haitham Al Ghais attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
OPEC Secretary General Haitham Al Ghais attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)

OPEC expects robust oil demand growth and is not changing its estimates, Secretary General Haitham Al Ghais said on Thursday at the St. Petersburg International Economic Forum, despite the Middle East conflict and closure of the ⁠Strait of Hormuz.

"Despite ⁠all the commentary out there that oil demand is declining, we have not registered signs of that yet," ⁠Reuters quoted Al Ghais as saying.

"We still see robust demand growth at 1.2 million barrels a day for this year," he said.

He also said that investments in the oil industry should not be affected by "one-off events" that happen ⁠anywhere ⁠in the world.

"We need to invest well ahead of time to be prepared for the demand that we see in the future," he said.


Egypt Plans to List More State-owned Companies, Replace In-kind Subsidies with Cash

Headquarters of the Central Bank of Egypt in downtown Cairo (Asharq Al-Awsat)
Headquarters of the Central Bank of Egypt in downtown Cairo (Asharq Al-Awsat)
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Egypt Plans to List More State-owned Companies, Replace In-kind Subsidies with Cash

Headquarters of the Central Bank of Egypt in downtown Cairo (Asharq Al-Awsat)
Headquarters of the Central Bank of Egypt in downtown Cairo (Asharq Al-Awsat)

Egypt aims to list four to five state-owned companies on the Cairo stock exchange before the end of the year as part of its state asset sales strategy, Prime Minister Mostafa Madbouly said on Thursday.

The government also plans to shift from in-kind subsidies to cash subsidies during the coming financial year, as part of efforts to improve the targeting of social support, Madbouly said at a press conference, Reuters reported.

It does not aim to reduce the monetary value of subsidies but rather ensure they reach those entitled to receive them, he added.

More than 60 million people receive subsidised essential commodities through state-run outlets, while at least 10 million others benefit from subsidised bread.