Paul Johnson, the outgoing director of the Institute for Fiscal Studies thinktank, has said it is “a little unfair” to blame the government for the lack of growth highlighted by today’s revised figures from the ONS.

Speaking on Times Radio, asked if the government was to blame, Johnson said:

I think it’s probably a little unfair. The government had no choice, really, but to fix some of the massive problems, and they’re right about this. The last government did leave them absolutely massive problems.

I think some of what they’ve done to fix it has been less than ideal. So what we’ve essentially had in terms of tax was the last government, I thought very cynically, reduced the employee national insurance rate and then this government essentially made it up by increasing the employer national insurance rate. And in the short run, at least, that is a net loss to the economy because that makes it more expensive for employers to hire people. So I think there is a problem there …

You’ve got a significant increase in spending relative, at least, to what was planned. Now again, we can see the need for this in the NHS and the justice system and elsewhere, and the remarkable thing is, we’re all complaining, as it were, about the big tax rises, but the spending rises are even bigger. So one of the issues here is the government is borrowing more. In other words, it’s pumping more money into the economy and that can have inflationary consequences.

Johnson also said the chancellor may want to raise taxes again next year. Asked about what might happen next year, he replied:

I’m not expecting a recession. But again, the government’s going to be talking about hard choices. They’ve got the hardest of all choices to make in the summer when they do their spending review and then I think we’ll have a lot of miserable cabinet ministers because they’re not going to get very much money.

And who knows? It’s not impossible that the chancellor [Rachel Reeves] will feel she needs to come back for yet more money next autumn if the economy doesn’t pick up.

Then, again, she’s stuck in this really difficult place – you increase taxes in order to fund public services adequately or because there’s no growth, you don’t have the money you need for the public services and you disappoint people on that front.

Reeves has repeatedly said that, after raising taxes significantly in the October budget, she is not planning a similar tax-raising budget this parliament.

At the Downing Street lobby briefing the PM’s spokesperson also rejected claims that Peter Mandelson’s appointment as ambassador to the US could be problematic because of past comments from Mandelson criticising Donald Trump.

On Friday Chris LaCivita, a consultant involved in Trump’s election campaign, described Mandelson in a post on X as an “absolute moron”. He was commenting on a news story about Mandelson calling Trump a “danger to the world” and a white nationalist five years ago.

Asked if the PM was worried the LaCivita comment showed that having Mandelson as ambassador could cause problems, the PM’s spokesperson replied:

No. The appointment shows just how seriously we’re taking this relationship.

[Mandelson] has got extensive foreign policy and economic policy expertise, particularly in the crucial issues of trade, business links. He’s got experience at the highest levels of government and he will be a significant asset in the UK’s relationship with the United States.

Today the Daily Telegraph has splashed on a story saying that Peter Mandelson, who will be the new UK ambassador to Washington, will use Nigel Farage, the Reform UK leader, to help build good links with the Trump administration. Before he was appointed Mandelson said he thought it would be a good idea for the British embassy to be making use of “friends” of Trump, like Farage, and today’s story is mostly based on a briefing saying Mandelson still stands by what he said in November. But it includes a quote from “a source close to Lord Mandelson”, asked about Labour people arguing Farage should be sidelined, saying:

I am sure that would be a view held by some but not those who need to conduct UK-US relations in the most optimum way.

At the Downing Street lobby briefing this morning, the PM’s spokesperson was asked if Keir Starmer would be happy for Mandelson to make use of Farage’s connections in this way. The spokesperson said he was “not going to get into that”. But he pointed out that Starmer had a half-hour conversation with Trump only last week, and dinner with him in New York in September, and he said that, as the new ambassador, Mandelson was a “highly respected figure with extensive foreign and economic policy expertise”.

Keir Starmer is getting a holiday. He was due to get a post-election holiday in the summer, but he cancelled it so that he could stay in the UK to deal with the summer riots.

The PM is spending Christmas with his family at Chequers. But they will be going abroad “for a few days” over the new year, his spokesperson told journalists at the No 10 lobby briefing this morning. The spokesperson did not reveal any further details about where he would be going, or for how long he would be away.

Asked if Angela Rayner would be in charge while he was away, the spokesperson said Starmer would remain in charge.

Keir Starmer and Volodymyr Zelenskyy both agreed it was “vital” for Russia to fail in Ukraine when they spoke by phone this morning, Downing Street said.

In a read-out of the call, a No 10 spokesperson said that Starmer started by telling Zelenskyy about his trip to the Joint Expeditionary Force leaders’ summit last week, and the resolve of JEF members “to put Ukraine in the strongest possible position going into 2025”.

The spokesperson went on:

At the summit, the group underscored the importance of matching their words with concrete action, including through further sanctions on the shadow fleet, the acceleration of lethal aid, and support for the Ukrainian defence industrial base, the prime minister added.

President Zelenskyy reflected on the situation on the frontline in Ukraine and the need to ensure Ukraine could degrade Russian forces for the long haul.

What happens in Ukraine in the coming weeks and months matters to Europe and Nato, and it was vital President Putin’s ambitions fail in Ukraine, the leaders agreed.

The Labour party has put out a statement about the Kemi Badenoch Today podcast interview. Referring to her reluctance to give details of policy (see 9.25am and 11.14am), a Labour spokesperson said:

Every time Kemi Badenoch speaks it becomes clearer that she has no solutions to the problems the Tories created. Under her leadership, the Conservatives have made unfunded spending commitments worth billions without explaining how she would pay for any of them. The Conservatives haven’t listened and haven’t learned. Labour’s plan for change will fix the foundations and rebuild Britain.

During the Conservative leadership contest Kemi Badenoch wrote an article for the Sunday Telegraph about immigration in which she suggested the UK should not be admitting migrants who do not accept British values. She said:

We cannot be naïve and assume immigrants will automatically abandon ancestral ethnichostilities at the border, or that all cultures are equally valid. They are not. I am struck for example, by the number of recent immigrants to the UK who hate Israel. That sentiment has no place here …

Our country is not a dormitory for people to come here and make money. It is our home. Those we chose to welcome, we expect to share our values and contribute to our society.

This was seen as a hint that Badenoch might be open an immigration policy that would involved restrictions on Muslims, or people from Muslim countries. In interviews Badenoch has declined to elaborate on what this policy might mean in policy terms, although recently she did say the party might end up with an immigration policy comprising something more radical than just leaving the European convention on human rights.

In his Today podcast interview, Amol Rajan asked Badenoch if she was worried about the fundamental compatability of Islam, on a strict interpretation, with western values. In response, Badenoch said she was not making a point about Islam, but about culture in general. She said:

People assume that I’m always talking about Islam, but I’m not really. It’s one of many variations of culture which we have in the country because of immigration, especially the more recent immigration which has been too high.

To understand what I’m saying, you have to look at where I grew up [Nigeria], where there are 300 different languages and cultures, everybody looks the same, and people don’t get on unless there is a unifying thing.

But Badenoch also said that the kidnapping of almost 300 Nigerian schoolgirls by Boko Haram, an Islamist terrorist movement in north-east Nigeria, had had a big influence on her thinking. She said:

One of the things that profoundly affected my view on the world was what happened 10 years ago when those 300 schoolgirls were abducted from their school by Boko Haram, a terrorist group in northern Nigeria. It has a lot of parallels with what happened on October 7.

And this group had been indulged – you know, ‘It’s just Islam, they’re just people who are poor and they’re fighting for their rights’, and then it moved into something really hideous and terrible, and it’s now just a depraved group of people who assault Christians, women, destroy families.

If you don’t impose strong values early on, then bad things will fill that vacuum.

On Friday I flagged up in the blog a good column by Patrick Maguire in the Times in which he argued that Reform UK is outflanking Labour on the left on some economic issues, for example by advocating nationalisation of Thames Water and British Steel plant in Scunthorpe. Amol Rajan clearly read it too because he asked Kemi Badenoch about both these issues in his Today podcast interview.

Asked if she would support nationalising the steel plant, Badenoch said:

Remember, that steel plant was one I was helping to manage [when she was business secretary]. I didn’t nationalise it then, did I?

It depends. With many of these things, it depends.

I tell you what I do want. I don’t want us to de industrialise. I don’t want us to give everything away to China. Nobody wants to invest in steel these days because the Chinese have flooded the market. I remember bringing in all sorts of trade remedies to try and save our steel industry.

What I’ve said before is that the government needs to step in to make sure that we have baseline resilience on steel. Does that look like nationalisation? Is it a public/private partnership. Those are details that I don’t get into because once circumstances change, you have to change.

And asked about Reform UK saying Thames Waters should be sold to the taxpayer for £1, Badenoch said she could not remember the details of the position the company was in. But she repeated the point about how it was wrong to give an answer off the cuff. She explained:

Aren’t you tired of people who just tell you what you want to hear? I will not do that.

And that’s why I don’t answer those questions, because the answer is always, and should always be, it depends.

Like the Conservatives (see 10.29am), the Liberal Democrats are also urging the government to reverse the main revenue-raising measure in the budget, the rise in employers’ national insurance, to promote growth. Commenting on today’s growth figures, the Lib Dem Treasury spokesperson Daisy Cooper said:

Today’s figures show that the economy is firmly stuck in the slow lane.

People are impatient for change after years of Conservative chaos, but so far this government has failed to deliver.

We are urging the Government to take the brakes off growth by reversing the national insurance tax hike on small businesses and scrapping the broken business rates system to unleash the potential of our high streets too.

In her Today podcast interview, Kemi Badenoch said that a belief in personal responsibility was what differentiated the Conservatives from other parties. Asked why she was a Conservative, she replied:

I think it is because of the principles which I had put in me, probably by my parents, without them realising, the key one being personal responsibility.

It’s the thing that distinguishes us from other parties, and often manifests itself in how much the state should do.

But personal responsibility also because I think that the story of human endeavour, that adventure, the journey that we take, is often a very individual one. That’s supported by others in society, but people need to take ownership over their lives, as much as they can, and make sure they raise their children properly and they leave something behind that’s better than what they found.

The Conservatives are saying the government should rewrite its “disastrous budget” in the light of today’s figures saying the UK economy had zero growth between July and September. Commenting on the figures, Mel Stride, the shadow chancellor, said:

Having inherited the fastest growing economy in the G7, growth has tanked on Labour’s watch. That means greater pressure on our public finances and an economy which, far from becoming more secure, is becoming significantly more vulnerable.

The Labour government must now urgently revisit their disastrous budget and align economic policy with growth not decline. Every moment of delay is further damaging business confidence, output and employment.

The warning lights are flashing.

The budget was announced at the end of October, in the fourth quarter of the year, not the third quarter covered by today’s revised figures.

In her statement on the figures, Rachel Reeves, the chancellor, said today’s figures highlighted the extent to which Labour inherted a “huge” economic challenge.

The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge.

But this is only fuelling our fire to deliver for working people.

The budget and our plan for change will deliver sustainable long-term growth, putting more money in people’s pockets through increased investment and relentless reform.

The Liberal Democrats could force a Commons vote on compensation for Waspi women, Daisy Cooper, the party’s deputy leader has said, capitalising on unease among Labour MPs over the government’s decision to rule it out. Pippa Crerar has the story here.

During the general election Nigel Farage went to the Gurnos estate in Merthyr Tyfdfil, south Wales, one of the most deprived wards in the UK, to launch the Reform UK manifesto. He was making a point about his party supposedly representing working and disadvantaged people.

Yet, just as with Donald Trump in the US, Farage is regularly accused of leading a party that exploits the discontent experienced by the poor to advocated policies that would largely benefit his mega-rich backers who want to pay less tax.

Nick Candy, the wealthy property developer who has recently become treasurer of Reform UK, has given an interview to the Financial Times (see 9.49am) that will reinforce this thesis. He claims “a number of billionaires” are now keen to donate to Farage’s party.

We have a number of billionaires prepared to donate to the party, not just Elon [Musk].

The Reform party is the disrupter – this is the seed round, the series A. This will be political disruption like we have never seen before.

The oldest political party in the world will be overtaken by the youngest political party on the planet.

Kemi Badenoch has said she doesn’t believe Elon Musk is going to make a multimillion-pound donation to Reform UK, even as the party’s treasurer claimed the US billionaire was now ready to do so, Ben Quinn reports.

UPDATE: In her interview with Amol Rajan from Today, asked about the prospect of Musk giving up to $100m to Reform UK, Badenoch said:

I don’t believe that he is going to give that money but it doesn’t matter if he does.

Politics in the US is very different from politics in the UK. People in this country don’t necessarily like to see politics being bought. I think it would be potentially counterproductive.

A state-funded scheme that has helped save cherished community sites including mainland Britain’s most remote pub is being shut early, leaving millions of pounds unallocated, Kalyeena Makortoff reports.

Good morning. The Radio 4 news is leading on a story about an interview with Kemi Badenoch in which she announces that she has not got anything to announce. Welcome to the Christmas holiday news desert.

To be fair, there is some proper news happening relating to domestic politics this morning. Revised growth figures are out and they say the UK had no growth at all in the third quarter of the year (July, August and September). As Richard Partington reports, for a new government that has made boosting growth a priority, this is a setback.

The growth figures came out after the release overnight of a report from the CBI saying firms are predicting a sharp fall in business activity in the new year. Some of the papers, like the Daily Mail, have splashed on the CBI story.

All of which is quite a big deal – and Graeme Wearden is covering it in detail on his business live blog.

It also presents an opportunity for the Conservative party. But, in an interview with Amol Rajan from the Today programme, recorded in advance but released this morning, Kemi Badenoch defended the fact that the opposition does not have a fully worked-out policy programme. She said the next election was probably a long way off, and it was important to take time working out the party’s position.

Here are some of the main lines from the interview broadcast at 8.10am on the Today programme. A longer version is being released on the Today podcast.

• Badenoch claimed she deserved credit for ending Tory infighting. Asked how her leadership was going, she said:

I think it is going well. I think it’s going as well as it possible could do. I was expecting it to be much worse.

And one of the things that I’m really pleased about is that the party has downed tools on the internecine warfare, and the actual being in parliament and seeing a real Labour government reminds everyone who the real opponent is.

• She rejected claims that she should be setting out more policy now. She said she did not think there would be an early election, and she claimed that when the Conservatives announced lots of policy soon after their defeat in 1997, that turned out to be a mistake. She said:

In 1997 what we did was rush out with a whole bunch of things that we’re going to do it: save the pound, do this, do that, kick every barking dog. It did not work.

As an engineer, you have to look at the problem that you are trying to solve.

The public did not kick us out because they didn’t like our manifesto. They kicked us out because they did not trust us. … We need to explain why we didn’t deliver. We need to re-earn that trust.

Earning trust is not something you do with a few tweets, rushing on television and getting on Instagram. That’s not what you do.

Building trust is something that takes a while.

A lot of people assume that, because Labour are unpopular, that they will fall soon. I don’t think so.

People are used to the drama of the Brexit years, changing prime ministers every couple of years. I even sometimes stumble on comments when you’re reading an article, ‘They should have got rid of him by now.’ It’s it’s been six weeks [since she became leader – although it actually is seven weeks].

She also said commentators should accept that it was “a marathon, not a sprint” for her party.

• But Badenoch also said she did not have as much time as she would like to come up with the plans for a “revolution” in how the state operates. She said:

I don’t have as much time as I would like. Four years even in my view is not enough time to do what we want to do, which is a revolution in terms of how the state works and how our society functions.

It is built for the 20th century and we need to change that. However, simply building a castle in the sand is not going to work either. My view is that I don’t have very much time but I have lots of things that need doing.

• She said the local elections would be “very difficult” for her party. (An analysis of council byelection results I posted on the blog on Friday helps to explain why.)

• She said she was not bothered about people disliking her. Asked why the former Tory MP Andrea Jenkyns defected to Reform UK, she said it was because Jenkyns did not like her. Asked why that was, she replied:

Honestly, I don’t really care. There are loads of other people who do like me. It’s politics. Some people will, some people won’t … There’s this great song by Baz Luhrmann that you know, remember compliments you receive, forget the insults, called Everyone’s Free to Wear Sunscreen. That’s sort of how I try and live.

• She dismissed the threat posed by Reform UK, saying there were giving “easy answers” because they had not thought things through. She said:

Reform is saying stuff because it hasn’t thought it all through. You can give easy answers if you haven’t thought it all through.

I do the thinking and what people are going to get with new leadership under me is thoughtful Conservatism, not kneejerk analysis.

Here is a clip from the interview. I will post more from it when I have heard the full version.

We have got a Downing Street lobby briefing at 11.30am, but otherwise the diary is fairly empty.

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