Weekly Memo: Budgets, AI and tech drama

Here's all the news you need to know this week!

1. UK Budget: Spending Up, Taxes Later

Rachel Reeves delivered a budget that boosts government spending by £11bn by 2029-30, while raising taxes by £26bn — but only gradually. Because the spending starts immediately and the tax rises don’t, the UK will need to borrow more over the next few years. Reeves avoided cuts to the rising welfare bill, which many expected to be targeted. Surprisingly, markets reacted positively: borrowing costs (yields) on long-dated government debt fell, and the pound strengthened. Investors seem reassured by the clearer fiscal direction, even if the numbers mean higher debt in the short term.

2. France Rejects Its Budget (Again)

France is stuck in a political loop: the National Assembly rejected parts of the government’s draft budget — the latest setback for Sébastien Lecornu, France’s third prime minister in 12 months. His two predecessors also failed to pass their budgets, forcing their resignations. The gridlock reflects a fractured parliament where the government lacks a stable majority, making it extremely hard to agree on tax and spending plans. For markets and businesses, this creates uncertainty over France’s economic direction and ability to control public finances. For students, it’s a reminder that political stability has real financial consequences.

3. IMF Gives Ukraine $8.2bn Support Package