The pound fell and government borrowing costs rose following Keir Starmer’s resignation announcement this morning. As Andy Burnham moves closer to power, there is concern in the financial markets that the government will start tinkering with its current strict fiscal rules on borrowing and spending.

What are the fiscal rules?
First introduced by Tony Blair’s Labour government in 1997, and now in their 10th iteration, the fiscal rules are restrictions set by the government to constrain its own decisions on taxes and spending. They are intended to act as a check on politicians seeking to borrow more in the short term. They also signal to investors and taxpayers that the government is committed to responsible management of public finances.

Rachel Reeves set out this Labour government’s iteration of the fiscal rules in October 2024. There are three main rules: that the current government budget should be in balance or in surplus by 2029-30; that national debt should be lower as a share of the economy in 2029-30 than in 2028-29; and that some welfare spending must be subject to a (fairly loose) cap.

What are the issues with fiscal rules?
Chancellors setting reasonable rules can still “be prone to wishful thinking,” said Sean O’Grady in The Independent. They may permit themselves huge deficits to be balanced in future years by “unspecified cuts in public spending”. Or they can “lock themselves into a fiscal straitjacket”, as Reeves did with her party’s “commitment not to raise income tax, VAT and national insurance contributions”.

The whole approach to a fiscal policy based around “pass-fail” rules needs a “rethink”, the Institute for Fiscal Studies said in February. The “fixation” with “creating ‘headroom’” against rigid rules leads to “dysfunctional” policy-making, and “aggressive ‘gaming’ of rolling targets”. 

What might Burnham do?
During his by-election campaign, Burnham committed to Reeves’ current fiscal rules, after previous suggestions that he made about changing them caused a bond market wobble. But, with No. 10 now in his sights, there are signs that he could try to give himself more leeway.

He has been “taking advice” from former Bank of England economist Andy Haldane and former Goldman Sachs chair Jim O’Neill, said Bloomberg. Both have been calling for looser fiscal rules for some time. O’Neill has argued that the constraints are “petty and arbitrary”, and Haldane has said the case for changing them is “overwhelming”.

Apple introduced the iPhone to the world in 2007. That same year, birth rates in countries worldwide began to decline. And the developments may be related, according to two new studies.

One found the iPhone “caused as much as half of the fertility decline” from 2007 to 2011, said The New York Times. A second study that covered 128 countries found that teen pregnancies declined “once smartphones became a mass phenomenon”. It may be that people “began to socialise more on their phones and less in person”, or it could be that the technology “made pornography more accessible”.

But other factors may also be at play. Smartphones are just one “example of the kinds of social influences” that may have reduced fertility, Wellesley College economics professor Phillip B. Levine told the newspaper.

‘Awkward, antisocial puppies’
Phones have “turned us into awkward, antisocial puppies who can’t handle eye contact”, said Lauren Veldhuizen in the National Review. The rise of smartphone technology has created a world in which “fewer people date and fewer babies are born”. Smartphones “short-circuit the deep-seated human need to have your kids keep you company”, said Noah Smith on his Noahpinion blog. We are choosing to “forsake each other’s company to stare eternally into a black mirror”.

The media has honed in on the new studies because of a collective mood of “total paranoia and doom about smartphones”, said Elizabeth Nolan Brown at Reason. The biggest plunges in the 2007-11 study were among 15- to 24-year-old females, suggesting that more girls and women are “avoiding unintended pregnancy at young ages”. That’s not necessarily a bad thing. 

‘No easy fix’
Maybe smartphones first tarnished dating, but AI “might finish the job”, said Eric Levitz on Vox. Streaming and social media have helped to isolate us, but online platforms can’t offer discussions on “your career anxieties, favourite Civil War battle or debilitating fear of iguanas”. Claude, ChatGPT, Gemini and other artificial intelligence chatbots can. 

There’s “no easy fix here”, said Axios. Politicians have proposed “baby bonuses, tax credits, or better child care and parental leave policies” to solve the fertility crisis, all to no avail. So “perhaps the solution is that everyone tosses their phones into the sea”.

Pope Leo XIV watches a video screening in the dark during a visit to the Rome headquarters of the World Food Programme. In a speech to the UN aid agency, Pope Leo decried leaders who “feed” wars while millions go hungry.

Andreas Solaro / AFP / Getty Images

Visit the “specialist aisle in most British supermarkets” and you’re almost certain to find a “red jar with the kindly face of a middle-aged Chinese woman staring back at you”, said Ammar Kalia in The Guardian.

These jars of Lao Gan Ma chilli crisp, a “spicy, crunchy and moreish umami condiment”, have made the woman on the label, Tao Huabi, a fortune. Generously dolloped on top of everything from dumplings to fried eggs, chilli crisp has become a “social media sensation” and inspired countless spin-offs from independent producers. Made by “pouring hot oil over chilli flakes, spice mixes and fresh ingredients such as spring onions, garlic and peanuts”, Lao Gan Ma is a “multi-sensory flavour bomb”.

Both “comforting and punchy”, it’s “stupendously addictive and can be added to basically anything”, said Dusty Baxter-Wright in Cosmopolitan. “Fiery yet sweet”, it’s “crunchy with soybeans and tingly on your tongue”.

Lao Gan Ma is a “classic for a reason”, said James Park in Eater, but there are other options. As a “self-proclaimed chilli crisp hype man”, I discover “creative” new brands almost “daily”. Momofuku Chilli Crunch is “full of umami with a surprising level of heat”; what “sets it apart” from its rivals is the addition of shiitake mushroom powder. Try it with baked brie and “you will be hooked”.

The royals need to show us if they are value for money
Jennie Bond in The i Paper
The news that King Charles will “make his tax affairs public” is “welcome”, writes former royal correspondent Jennie Bond. “I understand it was always part of the plan”, but recent pressure from Parliament “risks giving the impression” that he’s “been bounced” into it. Support for the royal family remains generally strong but is “slightly shakier” on their “value for money”. We need to see that they’re “contributing like the rest of us to our stretched and beleaguered national coffers”.

Trump’s Iran folly opens slim path to safer world
Hugo Dixon on Reuters
“Operation Epic Fury” now “looks more like an epic folly”, writes Hugo Dixon. But the US conflict with Iran “has silver linings”. Donald Trump is “looking increasingly like a spent volcano” and “Israel’s wings” have also “been clipped”; “further large-scale aggression” from either “seems less likely”. By contrast, Europe has “gained some kudos” for standing up to US “arm-twisting” and “has a better chance to convene an alliance of ‘middle powers’ not totally under the thumb” of America or China.

I disagree with Andy Burnham’s politics. But as former health secretaries, we both know the NHS needs to be fixed
Jeremy Hunt in The Guardian
If Andy Burnham succeeds Keir Starmer, he’ll be “the first prime minister to have been health secretary”, writes former Tory health secretary Jeremy Hunt. “Both of us” have “seen how difficult it is to make” the “enormous” NHS system “responsive to patients”. The real issue is productivity: everything is “micro-managed from London”, breeding “learned helplessness” locally. Burnham should devolve NHS responsibility to England’s mayors. “It would turn the NHS from the world’s most bureaucratic health service into its most innovative one.”