Some late breaking news: Richard Hughes, the chair of the Office for Budget Responsibility, has resigned after the findings of today’s urgent inquiry by the watchdog into how it inadvertently published Rachel Reeves’s budget 40 minutes early.

In a letter to Rachel Reeves and Treasury select committee chair Dame Meg Hillier on Monday, Hughes said:

“I need to play my part in enabling the organisation that I have loved leading for the past five years to quickly move on from this regrettable incident.

“I have, therefore, decided it is in the best interest of the OBR for me to resign as its Chair and take full responsibility to the shortcomings identified in the report.”

Hughes had been expected to testify to the Treasury Committee tomorrow….

And finally, here’s our news story on the investigation into the OBR budget report leak…

Britain’s budget watchdog has said the early leak of its budget documents before Rachel Reeves made her speech was the “worst failure” in its 15-year history as it emerged a similar breach had occurred earlier this year.

The Office for Budget Responsibility (OBR) said an investigation had found that the leadership of the organisation, over many years, was to blame for the early release of its Economic and Fiscal Outlook (EFO) document online nearly an hour before Reeves’s address last Wednesday.

After an investigation headed by the OBR’s chief of staff Laura Gardiner and Ciaran Martin, the former head of the National Cyber Security Centre, the report said a weakness in its procedures was likely pre-existing, and it would audit and improve its systems.

The organisation also admitted that its previous report, published alongside the spring statement in March, had been also been accessed “prematurely” – five minutes into Reeves’s speech after being uploaded online before it was supposed to be, at the end of the speech.

“We are in no doubt that this failure to protect information prior to publication has inflicted heavy damage on the OBR’s reputation. It is the worst failure in the 15-year history of the OBR,” they said.

It said the Treasury and the Cabinet Office should also shoulder some of the responsibility for maintaining IT systems that lacked the level of security needed to prevent unregulated access by outside bodies.

Airbus has fixed most of its jets affected by a software glitch after a technical problem grounded thousands of its planes, but its shares tumbled on Monday after it discovered a separate issue with its fuselage panels.

The UK government has sealed a deal with Donald Trump guaranteeing that zero tariffs will remain on the imports of UK pharmaceuticals into the US and commits Britain to higher spending on NHS drugs.

The agreement, announced on Monday, secures continued investment by UK pharma companies in the US and will create jobs in the US, the Trump administration said.

America’s factory sector shrank last month, according to a poll of purchasing managers at US firms.

The latest ISM Manufacturing PMI report, released a few minutes ago, shows that economic activity across US factories contracted in November for the ninth consecutive month.

Here are the key points from the report:

• New Orders Contracting

• Production Expanding

• Employment Contracting

• Supplier Deliveries Faster

• Raw Materials Inventories Contracting; Customers’ Inventories Too Low

• Prices Increasing; Exports and Imports Contracting

This pulled the manufacturing PMI down to 48.2% in November, from 48.7% in October, showing a faster contraction.

The NHS is to pay 25% extra for new drugs from the US under a new deal struck by Donald Trump and Keir Starmer which will also guarantee zero tariffs on medicines exported from the UK to the US, my colleague Lisa O’Carroll writes.

Commerce secretary Howard Lutnick has hailed the deal, saying:

“Today’s agreement is a major win for American workers and our innovation economy. We are strengthening supply chains, creating high-quality jobs, and reinforcing America as the world’s premier hub for life-sciences investment.”

Pharmaceuticals were zero-rated under a 1994 World Trade Organization deal but Trump has ignored this as part of his efforts to repatriate pharmaceurical manufacture and reduce costs of drugs to Americans.

But the two sides have now agreed the 10% tariff that would have applied to most exports from the UK under the deal struck by Trump and Starmer earlier this year will not apply to pharmaceuticals.

At the same time the UK has agreed radical changes to its drug procurement and will increase “the net price it pay for new medicines by 25%”.

Also, a so-called rebate system which requires the US to share between 23.5% and 35.6% of its revenues for branded drugs beyond an agreed annual gap will be reformed.

Under the new system the UK “rebate” will be reduced to 15% in 2026 and “remain at or below that level for the duration of the scheme”.

Today’s report also shows a timeline of how the OBR’s flagship report accidentally went public two hours early.

It illustrates how the fiscal watchdog’s staff raced to try to take the report offline again, once they realised what had happened….

• 05:10 – the website host emailed OBR staff to confirm that server modification to accommodate higher website traffic at the time of EFO publication was complete.

• 05:16 – website activity logs show the earliest request on the server for the URL https://obr.uk/docs/dlm_uploads/OBR_Economic_and_fiscal_outlook_November_202 5.pdf. This request was unsuccessful, as the document had not been uploaded yet. Between this time and 11:30, a total of 44 unsuccessful requests to this URL were made from seven unique IP addresses.

• 09:00 onwards – the web developer set up webpages (no PDFs, Excel spreadsheets or other documents were uploaded during this stage) in draft form in the content management system, creating IDs for all the downloads to be used across the website.

• 11:02 – PDF documents were emailed to the web developer, including the EFO document.

• 11:03-11:53 – the other supporting documents and files were sent to the web developer. 25 files were to be published in total.

• 11:30-11:35 – the web developer began uploading documents to the draft area of the OBR website (which was understood by all involved to be not publicly accessible), including the EFO PDF.

• 11:35 – the first successful request to the internet address (URL) https://obr.uk/docs/dlm_uploads/OBR_Economic_and_fiscal_outlook_November_202 5.pdf was made. The IP address of this first successful request had made 32 previous unsuccessful attempts at this URL over the course of the morning. There were a total of 43 requests to this URL that were successful between this time and 12:07, from 32 unique IP addresses.

• 11:41 – the first evidence online of the EFO being publicly available, via a Reuters news alert entitled ‘UK OBR ECONOMIC AND FISCAL OUTLOOK: BUDGET TAX RISES RAISE 26.1 BLN STG BY 2029-30’.

• 11:43 – an OBR staff member was first made aware by a (non-Reuters) journalist that Reuters was flashing extensive forecast details.

• 11:43 – OBR staff attempted to rule out the OBR website as the source. Not knowing that the URL for the EFO PDF was accessible even if known or guessed, the focus was on whether the relevant parts of the website had been pushed live accidentally, or whether there had been a leak of the document not connected to the publication process. OBR staff found no evidence via the front-end of the website that webpages had gone live accidentally.

• Around 11:50 onwards – images of and facts from the EFO began appearing widely online from many people (suggesting the PDF had been widely downloaded, and/or shared by other means after download).

• 11:52 – senior OBR and Treasury officials telephoned each other to discuss the breach. These Treasury officials made OBR staff aware of the URL leading to the PDF of the EFO that was accessible.

• 11:53 – OBR staff and the web developer attempted to pull the PDF from the website, and also to pull the entire website (e.g. via password protection), but struggled to do so initially due to the website being overloaded with traffic.

• 11:58 – an email was received to the OBR press inbox from a Reuters journalist confirming that Reuters had published details of the EFO and asking for comment.

• 12:07 – the EFO PDF was renamed by the web developer.

• 12:07 – the EFO PDF appeared on the Internet Archive. This means it was, at that precise time, visible entirely generally on the open internet via search engines. It is assumed that this happened very briefly in the rush to remove it.

• 12:08 – the EFO PDF was removed from the website’s content management system, taking it offline.

• 12:08 – the OBR Chair and staff drafted a statement setting out briefly what had happened and confirming that the OBR’s website was the source of the error.

• 12:15 – this statement was posted on the front page of the OBR’s website, and on X (formerly Twitter).

• 12:34 – the Chancellor’s Budget statement began, opening with a reference from the Chancellor to the early release of the OBR EFO.

• 13:38 – the Chancellor’s statement ended and the EFO and supporting documents were immediately pushed live.

• 16:29 – the online version of the EFO PDF was updated with a correction slip at the front, after approval of these corrections by the House of Commons Journal Office.

Worryingly, the OBR investigation has also discovered that its previous report, in March, was also acccessed early after being uploaded to the web before publication time,.

The foreword into the investigation says:

It is of concern that Professor Martin finds that it is very likely that the weaknesses that caused the premature accessing of the November 2025 EFO were pre-existing.

Indeed, it appears that the March 2025 EFO was accessed prematurely on one occasion, though there is no evidence of any activity being undertaken as a result of that access, and he concludes the most likely explanation is benign.

Professor Ciaran Martin’s technical analysis explains that data from March shows that one IP address successfully accessed the document at 12:38pm, five minutes after the Chancellor had started speaking and nearly half an hour before publication.

There is no evidence at this stage of any nefarious activity arising from it, the report adds.

The foreword of the OBR’s report into the EFO publication error also declares that “ultimate responsibility” rests with its leadership.

The investigation has also warned that the fiscal watchdog would require more investment in its operations to be able to publish such important reports safely.

The ultimate responsibility for the circumstances in which this vulnerability occurred and was then exposed rests, over the years, with the leadership of the OBR. The OBR is a small analytical organisation with resources that reflect its size.

The twice-yearly task of publishing a large and sensitive document is out of scale with virtually all of the rest of its publication activities. Professor Martin notes that protocols for the EFO’s publication “reveal a well-planned but significantly underpowered operation[…]more akin to that used by a small or medium-sized business (which of course in size the OBR resembles)”.

Responsibility for addressing this challenge by either changing the method of publication or substantially increasing the resources devoted to it rested over the years with the leadership of the OBR but also with the sponsoring department, the Treasury, and the Cabinet Office.

Newsflash: Britain’s fiscal watchdog has released a report into how it accidentally published its economic and fiscal outlook ahead of last week’s budget.

The Office for Budget Responsibility says that professor Ciaran Martin, former head of the National Cyber Security Centre who assisted with the investigation, is confident that the EFO was not deliberately leaked, and that it also was’t due to hostile cyber activity by foreign actors or cyber criminals.

In the foreword to the report, OBR non-executive members Baroness Hogg and Dame Susan Rice write:

Professor Martin is clear that this was not a case of intentional leakage. Nor was it a simple matter of pressing the publication key too early. Those involved all believed that the protections against attempts to access the document early offered by the system were indeed in place.

As Professor Martin says, “given the absence of any obvious premature disclosures of OBR documentation in the past, this was understandable”. However, these protections were not in place. This is because, as Professor Martin explains, they were not applied properly and these weaknesses appear to have been pre-existing.

The outcome was that the protections did not work, and efforts to secure premature access were easy to accomplish because entering a predictable internet address gave access to the document.

[Reminder: This failure allowed a Reuters reporter to access the document, and report details of the budget around 11.40am, 50 minutes before Rachel Reeves began delivering the budget.]

With the markets jittery, the price of silver has hit a new record high.

Silver rose over $57 per ounce for the first time ever this morning,

As well as being used as a store of value, silver also has industrial uses due to its high thermal conductivity and a relatively higher electrical conductivity.

AJ Bell investment director Russ Mould flags that rumours that a trader may have been caught short of silver after betting against the metal, saying:

“Silver is up by nearly 7% from Friday, which saw a truncated session in the USA, thanks to the reported power outage at a data centre operated by the CME. This confluence of events is prompting much chatter on social media about whether this really was an outage or a convenient break in trading on a day when liquidity and volumes were likely to be light across most markets and asset classes, thanks to the Thanksgiving holiday weekend in America.

“If someone really is short silver and struggling to find physical product for delivery to meet contracts, then this should show up pretty quickly in the inventory levels held across COMEX-approved warehouses, such as those managed by JPMorgan Chase, HSBC, and Loomis International, among others.

“As of Friday, COMEX was showing stocks of 456.8 million ounces of silver, a high number by historic standards, based on data that goes back to 2002.

Elsewhere in the markets, the dollar is weakening as investor anticipate cuts to US interest rates.

The dollar index has dipped by 0.35% today, with the pound now up 0.2% against the greenback at $1.326.

Investors are increasingly confident that the Federal Reserve will ease policy this month – a quarter-point rate cut is now seen as an 87% chance.

And looking further ahead, speculation is growing that White House economic adviser Kevin Hassett will become the next Fed chair. Hassett, a Trump loyalist, would presumably be inclined to interest rate cuts which could undermine the dollar…..

Airbus’s shares are on track for their worst day in eight months, as it confirms that it has (as flagged earlier) found a problem with fuselage panels on its A320 planes.

Airbus has confirmed “a quality issue affecting a limited number of A320 metal panels”, Reuters reports.

The company says it is taking “a conservative approach” and inspecting all aircraft potentially impacted, even though only a portion of them will need further action to be taken.

Shares in Airbus are currently down 6.5%, which would be their worst biggest fall since April. Investors will also be reacting to the software problem discovered on Friday night, which is now largely fixed (see earlier post).

A risk-off mood is gripping the markets at the start of December, knocking shares and crypto assets.

Most European markets are in the red, with Germany’s DAX down 1.2% and France’s CAC 40 losing 0.55%.

The UK’s FTSE 100 is less affected, down just 0.13%, with shares in mining companies rising.

The bitcoin price has fallen 5%, taking the largest cryptocoin down to around $86,650.

Joshua Mahony, chief market analyst at Scope Markets, says it’s a “largely downbeat start to the week”, adding:

Crucially, crypto has provided one area of particular concern, with the continued flush lower bringing financial stress for many that will also have positions across a raft of traditional assets.

The main piece of news for markets has come from overnight comments out of the BoJ, with Governor Ueda noting that the group will weigh up the pros and cons of a rate hike in December. While this provided a rare rise for the yen, it also saw yields spike with the 2-year hitting the highest level since 2008.

With a huge amount of Japanese funds invested abroad off the back of cheap local borrowing, the continued rise in Japanese bonds does raise risk of liquidity returning home to the detriment of international financial asset prices.

Britain’s property sector did not shrug off budget uncertainty as well as the factory sector, it appears.

New Bank of England data shows that mortgage demand cooled in October.

There was a 600 drop in net mortgage approvals for house purchase in October, to around 65,000, the BoE reports. Approvals for remortgaging fell by 3,600 to 33,100, the lowest since February 2025.

Net borrowing of mortgage debt by individuals fell back to £4.3bn in October, after a rise to £5.2bn in September.

The BoE also reports that the ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages dipped to 4.17% in October, down from 4.19% in September. That’s the lowest since January 2023.

This morning’s report also shows that UK companies paid down some debts in October.

Private non-financial corporations repaid, on net, £4.8bn of finance during the month, the highest level of net repayments since October 2023.

Thomas Pugh, chief economist at audit, tax and consulting firm RSM UK, says:

“The drop in consumer credit growth, mortgage approvals and net finance raised by private corporations suggests that households and firms were easing back on borrowing and major transactions ahead of last week’s budget. This will probably have been even worse in November as speculation reached fever pitch, but given the lack of any significant tax increases next year activity may bounce back in December and into next year.

“The drop in consumer credit growth to £1.1bn, down from £1.4bn in September and well below the £1.5bn six-month average was mainly driven by a drop in other loans, which would be consistent with households holding off from making major purchases ahead of the budget. However, the smaller increase in households saving balance suggests they weren’t rushing to hoard cash.

“What’s more, the drop in mortgage approvals to 65,018 is consistent with the recent weakness in house prices reported in a number of surveys. Now that there is some certainty around property taxes and interest rates are likely to be cut again in December, the housing market should pick up. But given the budget will boost demand slightly next rather than subtracting from it, the Bank of England is unlikely to cut rates significantly further or faster than priced in.

Happier news: The UK’s factory sector returned to growth last month for the first time in over a year.

The latest poll of UK purchasing managers across manufacturers shows that output across the sector rose last month, and that business optimism hit a nine-month high.

This pushed up the S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) to a 14-month high of 50.2 in November, up from 49.7 in October. This is the first time since September 2024 that the PMI, which tracks activity in the sector, has come in above the 50-point mark that shows stagnation.

Rob Dobson, director at S&P Global Market Intelligence, says:

The numbers are especially encouraging as this improvement occurred despite November seeing elevated levels of business uncertainty, and in some cases an element of gloom, ahead of the Autumn Budget. “The lifting of this uncertainty caused by the long lead-in to the Chancellor’s budget announcement should hopefully provide a boost in December, but it will be interesting to see the extent to which business might react to the absence of any significant growth-promoting measures. After all, despite the improvement in the performance of the manufacturing sector, any growth is still worryingly weak.

Rising competitive pressures and slower cost inflation meanwhile led to factory gate prices being cut for the first time in over two years. This combination of soft industrial performance and subsiding price pressures will add to the shift in policy debate away from inflation fears towards supporting economic growth.”

Airbus staff have been working hard over the weekend to fix a software problem that affected thousands of its planes.

The glitch, revealed late on Friday, required an urgent system update on Airbus’s most widely-flown jet to ensure safe use of flight inputs.

And this morning, Airbus said the vast majority of around 6,000 A320-family aircraft have received the necessary modification, with fewer than 100 still to be fixed.

UK budget airline easyJet told the City this morning that it had completed the required software updates on all operational aircraft requiring the update over the weekend, and maintained its flying programme during the operation.

WizzAir also carried out the mandatory maintenance with zero flight cancellations, having identified 83 operational aircraft within its fleet which required immediate software amendment.

There’s a small increase in UK government borrowing costs this morning, as investors digest the row over Rachel Reeves’s comments in the run-up to the budget.

UK gilt prices have dropped slightly this morning, which nudges up the yield, or interest rate, on the bonds to the highest levels since Budget Day last Wednesday.

It’s a small move, though, and broadly in line with other bond market moves.

The yield, or interest rate, on UK 10-year gilts is up 2.6 basis points (0.026 percentage points) to 4.475% this morning. US 10-year bonds, as a comparison, are up 2.3 basis points.

UK 30-year gilt yields are up 4 basis points, again slightly more than the US equivalent.

As well as Reeves’s denial that she lied to the public in the buildup to last week’s budget, traders will also be watching a speech from prime minister Keir Starmet later today, where he’ll outline plans for a multiyear economic plan based around deregulation, further welfare reform and closer European ties.

The oil price has jumped this morning, after the Opec+ cartel agreed to leave output unchanged and Ukraine attacked two Russian ‘shadow fleet’ tankers.

Brent crude is up around 2% this morning, hitting $63.82 per barrel for the first time since 20 November.

The rise comes after Opec+ decided to stick with their existing plans to pause production increases during the first quarter of 2026, amid growing signs of a glut in global oil markets.

Ipek Ozkardeskaya, senior analyst at Swissquote, explains:

US crude is up more than 2% this morning as OPEC reiterated yesterday that they want to stabilise oil prices into next year, implying tighter control of output to address the supply glut that has weighed on prices – except during brief periods of geopolitical tension.

And even those tensions haven’t been enough lately to bring buyers back, which shows how much oil is currently sloshing around the planet. As discussed in previous reports, OPEC alone can’t reverse the broader negative price dynamic, but it can help put a floor under the latest selloff.

The attack by Ukrainian naval drones on two sanctioned tankers in the Black Sea could also indicate that supplies from Russia will be lower than expected, especially as the Caspian Pipeline Consortium, which handles more than 1% of global oil, halted operations last weekend after a mooring at Russia’s Black Sea terminal was significantly damaged by a Ukrainian naval drone attack.

Just in: A deal to create the largest listed UK infrastructure investment company has collapsed.

The propsed combination of two UK infrastructure investment companies, HICL Infrastructure and the Renewables Infrastructure Group Limited (TRIG), would have created a new investment trust worth £5.3bn. However, it has failed to win enough support following a revolt by investors in HICL, which had proposed the merger with fellow FTSE 250 member, TRIG.

In a statement this morning, the two companies say the proposed combination will not proceed, adding:

Both Boards remain convinced of the strategic rationale for the combination. However, following broad engagement with shareholders, the HICL Board determined that it cannot progress the transaction without a substantial majority of support from its own investors.

HICL’s investments are focused on infrastructure in hospitals, schools and transport, while Trig invests renewable energy sources such as wind farms, solar and battery plants.

A group of HICL investors had opposed the deal, claiming it had been priced and structured to favour Trig.

Trig’s board say they regret that investors won’t get to vote on the deal.

Richard Morse, chair of TRIG, says:

“Our focus now returns to delivering TRIG’s attractive standalone strategy. TRIG is a well-established platform with high quality assets, a competitive pipeline of opportunities, and deep renewables and energy storage expertise.

We are uniquely placed to capitalise on the demand growth for low carbon, reliable power and to capture the commercial opportunities as economies across the UK and Europe electrify and decarbonise. Doing so will allow us to deliver sustainable value and growth for our shareholders, with whom we will continue to engage on the path ahead.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

With the budget over, bar the inquest, attention is again turning to the health of the UK economy.

We’ll get a healthcheck on Britain’s manufacturing sector this morning, and an assessment of the mortgage and credit market but first, there are a flurry of economic surveys to digest.

KPMG have predicted that the UK economy will cool in 2026 as weak consumer sentiment and a slowing job market weighs on growth. They predict UK GDP will rise by 1.0% in 2026, down from 1.4% in 2025, with unemployment rising next year too.

That’s a weaker forecast than the Office for Budget Responsibility – which predicted last week that growth would fall to 1.4% in 2026 from 1.5% this year.

KPMG UK’s latest Economic Outlook also predicts the unemployment rate will rise to 5.2% in 2026, reflecting slower hiring, increasing participation and job cuts as companies look to automate some job fnctions.

Wage growth is expected to slow, falling towards 3% by mid-2026 – something that might encourage the Bank of England to lower interest rates.

Yael Selfin, chief economist at KPMG UK, said:

“The outlook for growth in 2026 is subdued, reflecting the impact of a cooling labour market and weak household spending. But there are pockets of strength emerging in the form of data infrastructure and green energy investment. The medium-term picture could improve further if planning reforms unlock housing delivery and uncertainty reduces for investors.

“With ongoing headwinds continuing to weigh on household activity, consumer spending is likely to remain subdued over the coming year. Although the Autumn Budget avoided front-loaded tax hikes, the decision to maintain frozen tax thresholds until 2031 means that fiscal drag will persist.”

The CBI also have downbeat news – they report that business sentiment and activity dropped further across the services sector in last three months.

The CBI’s latest Service Sector Survey found that business volumes dropped again, marking over a year of declines. Meanwhile, average selling prices were unchanged despite cost growth remaining elevated.

Looking ahead, service sector firms expect volumes to keep falling over the next quarter.

And to round off the gloom, the IoD Directors’ Economic Confidence Index has remained at a record low.

The index was unchanged at -73 in November, matching October’s reading, but did inch up to -72 immediately after the budget.

The agenda

• 9am GMT: Eurozone manufacturing PMI report

• 9.30am GMT: UK consumer credit and mortgage approvals

• 9.30am GMT: UK manufacturing PMI report

• 3pm GMT: US manufacturing PMI report