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Reeves could face £20bn Budget hole as UK productivity downgraded

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Reeves could face £20bn Budget hole as UK productivity downgraded


The government is facing a bigger-than-expected hole in the public finances as it prepares for next month’s Budget.

A downgrade to the UK’s productivity performance from the government’s official forecaster could lead to the chancellor facing a £20bn gap in meeting her tax and spending rules, the BBC understands.

Rachel Reeves has confirmed both tax rises and spending cuts are options in next month’s Budget.

The Treasury declined to comment on “speculation” ahead of the Office for Budget Responsibility’s (OBR) final forecast, which will be published on 26 November alongside the Budget.

It comes as the chancellor told an audience in Saudi Arabia that Brexit is partly to blame for high inflation in the UK.

Persistent higher prices have been a dampener on UK economic growth, because the Bank of England has kept interest rates higher to control inflation, and that has made Reeves’ job harder to balance tax and spending within her fiscal rules.

“Inflation is too high in countries around the world including in the UK, and one of the reasons for that is that there’s too much cost associated with trade with our nearest neighbours and trading partners,” Reeves said as she argued that closer economic ties with the EU could ease the inflation burden and boost economic growth.

“Businesses, especially small businesses, who face increasing red tape since we left the European Union, for workers, who are now locked out of the jobs market in Europe, there are obviously huge benefits from rebuilding some of those relations.”

The OBR will deliver its final draft forecast for Reeves’s Budget, including productivity – a measure of the output of the economy per hour worked – to the Treasury on Friday.

The forecaster had previously assumed a partial bounce back in productivity growth, but this has never materialised.

This productivity assumption is essential to long-term growth prospects and so, under the current system, even a small change can alter how much money a Budget needs to raise by several billion pounds.

The OBR is understood to have downgraded forecast for productivity by 0.3 percentage points – a figure first reported by the Financial Times – bringing its assumption closer to that of the Bank of England.

The Institute for Fiscal Studies think-tank has calculated that for every 0.1 percentage point downgrade in the productivity forecast, government borrowing would increase by £7bn in 2029-30 – meaning a 0.3 point cut could add £21bn to the Budget hole.

The changes open up an initial gap of some £20bn, rather than the £10-£14bn widely anticipated.

Such a hole could be plugged by hiking taxes, reducing public spending or increasing government borrowing.

Reeves has set out two main Budget rules, which she has described as “non-negotiable”. These are:

  • Not to borrow to fund day-to-day public spending by the end of this parliament
  • To get government debt falling as a share of national income by the end of this parliament

Reeves admitted on Monday to business leaders in Saudi Arabia that the OBR was “likely to downgrade productivity” which has been “very poor since the financial crisis and Brexit”.

The OBR is expected to explain the decision in detail, but some ministers have privately pointed out that if it had done this earlier, different choices could have been made at this summer’s Spending Review.

There are many other moving parts in the Budget which may bring better news for the chancellor, such as the decline in the interest rates paid on government debt.

However, with other pressures such as the U-turns on welfare spending and a desire to rebuild a bigger buffer in the public finances, speculation is pointing towards significant tax rises, including some possible breaches of manifesto commitments such as changes to income tax.

The Treasury will inform the OBR of its first draft Budget measures next week.

On Tuesday, the government announced it had agreed a series of trade and investment deals with Saudi Arabia, following Reeves’s visit to the Gulf.

This included up to £5bn in support from UK Export Finance for projects in Saudi Arabia which the government said would “unlock” contracts for British firms.

It also announced deals including a £37m investment from Saudi cybersecurity firm Cipher to set up its European office in London, and a £75m investment from Saudi investors and bankers into British digital bank Vemi.

The chancellor also met ministerial counterparts from Qatar and Kuwait for talks over a wider potential trade deal between the UK and the Gulf Cooperation Council.



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Panel questions IndiGo, DGCA babus, gets ‘unconvincing’ replies | India News – The Times of India

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Panel questions IndiGo, DGCA babus, gets ‘unconvincing’ replies | India News – The Times of India


New Delhi: IndiGo was quizzed on Wednesday by a parliamentary committee over the misery inflicted on passengers by its mass-cancellation of flights, but it blamed a variety of factors, including system glitch and adverse weather conditions, while DGCA and the aviation ministry parried off criticism of their role in the fiasco.Some committee members termed replies of different stakeholders as “unconvincing” and aimed at washing their hands of the crisis, encapsulated by the response of a govt official that he first came to know of the unfolding ordeal through media reports.The panel, headed by JDU’s Sanjay Jha, decided to wait for the report of an inquiry ordered by DGCA before coming to a conclusion and make its recommendation. It will hold another meeting and is expected to call these stakeholders again. The DGCA-ordered committee was constituted on Dec 5 and was asked to submit its report in 15 days.Captain Sam Thomas, president of Bengaluru-based Airline Pilots Association of India, created flutter at the meeting by alleging corruption in DGCA and was asked by members to refrain from making sweeping allegations without producing evidence. He alleged that one can commit any wrong, but stay safe if he touched right feet.A committee member said IndiGo, which has offered apology for the ordeal, was far from apologetic in its response before the panel. It told the panel that several factors combined to derail its operation, including a glitch in system, which needed rebooting, and adverse weather that had their pilots stuck in different zones.IndiGo was represented by its COO Isidre Porqueras, while officials of Air India, Akasa Air, Spice Jet and Air India Express appeared before the panel as well. Civil aviation secretary Samir Kumar Sinha and top functionaries of other stakeholders were part of the deliberations.Replying to a query, IndiGo said all luggage, except 52 which remained unclaimed, have already been delivered.The panel’s meeting came against the backdrop of the suspicion, subject of investigation, that IndiGo remained resistant to the implementation of guidelines (Flight Duty Time Limitation) that allowed more rest for pilots in line with global norms aimed at ensuring flyers’ safety.It has been accused of engineering the disruption, leveraging its market dominance, to force the ministry to roll back the regulation as implementing it would have required the airline to hire more pilots. Faced with chaos caused triggered by disruption of IndiGo’s operations, DGCA had to relax the implementation of the guidelines.IndiGo management is reported to have denied allegation in meetings with ministry.



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Historic Green Milestone: Indian Railways Achieve 99.2% Electrification, Leaves UK, Russia And China Far Behind

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Historic Green Milestone: Indian Railways Achieve 99.2% Electrification, Leaves UK, Russia And China Far Behind


New Delhi: Indian Railways has reached a milestone in its journey toward sustainable transportation, achieving electrification of 99.2 per cent of its broad gauge network. This puts India ahead of major rail economies such as the United Kingdom, which stands at 39%, Russia at 52% and China at 82%, according to a press release from the Ministry of Railways.

The achievement brings the country closer than ever to operating a fully electrified railway system. Fourteen railway zones, including Central, Eastern and Northern Railways, have already achieved 100% electrification. In addition, 25 states and union territories have completed electrification across their rail networks.

Data provided in a written reply to the Lok Sabha highlights the rapid pace of this transformation. Between 2014 and 2025, India electrified 46,900 route kilometres, more than double the 21,801 route kilometres completed in the previous six decades.

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In the past two years alone, 7,188 route kilometres were electrified in 2023-24 and 2,701 route kilometres in 2024-25.

The environmental benefits of this transition are major. Rail transport emits 89% less CO2 than road transport, and Indian Railways is complementing electrification with renewable energy initiatives. So far, 898 MW of solar power has been commissioned at 2,626 stations, reinforcing India’s commitment to a greener transportation network.

Electrification is advancing consistently across zones. The Central, East Coast, East Central, Eastern, Konkan Railway, Kolkata Metro, North Central Railway, North Eastern Railway, Northern Railway, South Central Railway, South East Central Railway, South Eastern Railway, West Central Railway and Western Railway have achieved full electrification.

Other zones, such as North Western, Southern, Northeast Frontier and South Western Railway, have crossed 95% electrification.

The progress is equally impressive state-wise as well. Most states are fully electrified, while Rajasthan, Tamil Nadu and Karnataka are nearing completion. In the North Eastern region, the broad gauge networks in Arunachal Pradesh, Meghalaya, Nagaland, Tripura and Mizoram have been 100% electrified, while Assam stands at 92%, with work underway to complete the remaining sections.

All new rail lines and multi-tracking projects are now being sanctioned with electrification integrated from the beginning. According to the Ministry of Railways, the completion timeline for electrification projects depends on factors such as forest clearances, relocation of utilities, statutory approvals, geological and topographical conditions, law and order situations and climatic constraints, which can affect progress at different project sites.

Beyond expanding connectivity, electrification is central to India’s sustainability agenda. The move to electric rail corridors is helping dramatically cut carbon emissions. For instance, transporting 1 tonne of freight over 1 km emits 101 g of CO2 by road, compared with just 11.5 g by rail, an almost eightfold reduction.

The Indian Railways aims for 100% electrification while contributing to the nation’s goal of net-zero carbon emissions by 2030. Every new rail project now includes electrification from the outset, ensuring that India’s railway system grows greener, more efficient and globally competitive.



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Medical supply firm Medline jumps more than 30% in debut after biggest IPO of 2025

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Medical supply firm Medline jumps more than 30% in debut after biggest IPO of 2025


Shares of U.S. medical supplies giant Medline jumped more than 30% in its debut on the Nasdaq on Wednesday after the biggest initial public offering of the year globally.

The stock opened at $35, up from its $29 IPO price.

The private equity-owned company sold a little over 216 million shares on Tuesday, raising $6.26 billion in an upsized offering that finished off a strong year for new listings and bolstered optimism about the IPO market in 2026. Shares of Medline will trade under the symbol MDLN. 

That IPO pricing gives Medline a market value of at least $37 billion, based on the shares listed in its regulatory filings.

“Historically, we’ve done very little advertising, very little marketing, and this gives us a way to amplify our voice and actually expand really the receptivity of who we are,” Medline CEO Jim Boyle told CNBC’s “Squawk Box” earlier Wednesday. “We are the largest company you’ve never heard of, and we happen to be everywhere. And that’s a really interesting thing.”

The U.S. IPO market has held steady despite market volatility in the spring, driven by President Donald Trump’s sweeping tariffs, and the longest U.S. government shutdown in history in the fall. Just over 200 IPOs have priced this year, including Medline, which is the largest U.S. listing since Rivian‘s $13.7 billion deal in November 2021, according to data compiled by CNBC.

But Medline’s IPO is also among the biggest private equity-backed listings. Three private equity firms — Blackstone, Carlyle and Hellman & Friedman — acquired a majority stake in the company in 2021 for a whopping $34 billion. At the time, the deal was the biggest leveraged buyout since the financial crisis. 

CEO Jim Boyle celebrates with others as medical supplies giant Medline (MDLN) holds it’s IPO at the Nasdaq stock market site in Times Square in New York, Dec. 17, 2025.

Shannon Stapleton | Reuters

Medline, founded in 1966, is based in Northfield, Illinois. The company manufactures and distributes roughly 335,000 different medical and surgical supplies — from gloves, masks and scalpels to wheelchairs. Medline has customers in more than 100 countries and, as of the end of 2024, employed more than 43,000 workers worldwide. 

Medline’s total debt was around $16.8 billion as of late September 2025. The company raked in $25.5 billion in net sales in 2024.

Medline’s earlier plans to go public this year were postponed due to uncertainty around tariffs affecting products from Asia. The majority of the company’s products are sourced or manufactured in Asian nations, particularly China. 

Medline expects a $150 million to $200 million hit from tariffs to income before taxes in fiscal 2026.

The company competes with names like McKesson and Cardinal Health

— CNBC’s Gina Francolla contributed to this report



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