| That nervous energy you sense around SW1 at the moment? That's everyone trying to second guess what Donald Trump will do in January. The government's first budget 12 days ago got stick for coming several months after the election and following the global investment summit. Well, it looks like there is an argument that they should have delayed it even more: until now, after the American election. Already, that budget — billed as the biggest in forever — looks worryingly close to having been trumped. Keir Starmer is in France today, the first prime minister since Churchill to attend the Armistice Day commemorations on the Champs-Élysées. He spent the morning being driven around Paris in an open top car with Emmanuel Macron, both looking statesmanlike, and frozen. I'd say the trip serves Starmer in multiple ways: he can remember the fallen, while less nobly also subtly needling the last government for their disastrous day during the election when Rishi Sunak left a D-Day memorial service in France early to return to the campaign trail. The visit is also economic statecraft, and part of Starmer's attempts to refresh the Entente Cordiale with Macron in the face of Trump's tariffs. Back home, Bloomberg's reporting teams are clear the chancellor has problems coming at her from all sides. Getting a good reception for her first Mansion House speech later this week — a key moment for any chancellor to land their agenda with the City — could be tougher after she announced the major National Insurance increase for employers.  Keir Starmer Photographer: Benjamin Cremel/Getty Images Today we cover a letter signed by over 200 hospitality bosses which outlined how the planned tax hike will force some businesses to "drastically cut jobs." The numbers are stark: Tesco alone is warning of a billion-pound bill this parliament to cover it. Separately, Neil Callanan reports that at least 1,022 companies filed for insolvency in the week ended Nov. 8, an increase of 64% from a year earlier, according to notices filed to the Gazette. Layer on top the threat of 20% tariffs on UK exports to the US – with an impact on our economy of around £22 billion, according to analysis from the University of Sussex's Centre for Inclusive Trade Policy. Unsurprisingly, Reeves's team are trailing that her maiden Mansion House speech will be a cri de cœur for free trade. Clearly the UK will be angling for either an exemption from Trump's tariffs or it will echo the threat being made by the Europeans that it will raise tariffs on Harley-Davidsons and Levi's. But this is Bloomberg's team on how bad the timing is for Team Starmer: "Trump's stance poses a conundrum for Prime Minister Keir Starmer as he works to repair post-Brexit economic links with Britain's European Union neighbors and pursues a thaw in ties with China following years of tensions over Covid-19, Hong Kong and hacking allegations." What then for the 12-day-old budget? Philip Aldrick over the weekend wrote that things may soon get so serious she has to return to the Commons to do another budget sooner than pledged, with Reeves "already at risk of breaking Labour's manifesto pledge to hold just one fiscal event a year." Rising borrowing costs and weaker growth both threaten to wipe out the £9.9 billion of headroom Reeves has against her "stability rule" that day to day spending must be paid out of taxes in 2029-30. If the Office for Budget Responsibility decides she is on course to break her rules at its update in the spring, Phil is told by sources inside government that she intends to respond with tax rises or spending cuts. Phil's piece details that borrowing costs are already 0.3 percentage points higher than forecast by the OBR at the budget, which the watchdog said would remove her entire fiscal buffer. Goldman Sachs last week downgraded growth forecasts for the UK. And this, dear Readout reader, is before she's had to find the money to get to 2.5% of GDP for defense. On our In the City podcast, recorded in the immediate hour after the budget we all agreed Reeves was likely to need to come back for more – but none of us could have predicted how soon this might need to be. Interestingly it is Elon Musk who could be the most muscular force inside the Trump brains trust against tariffs (60% on Chinese imports would massively hit Tesla factories there). But Musk is not very pro-UK at the moment either, after going toe-to-toe with Starmer on X this summer over the riots and the 100 Labour activists who were reportedly sent to the US to campaign for Kamala Harris. So, it would be a funny twist if in the end it was Musk who helped the UK swerve a trade war. Want this in your inbox each weekday? You can sign up here. | 
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