UK government to scrap planned rise in fuel tax, Sun reports

Britain may postpone a planned September rise in motor fuel duty, finance minister Rachel Reeves is reported to announce next week, averting an expected 5 pence (6.6 cents) per litre increase. While the move would ease cost-of-living pressure for consumers and could support domestic demand, it would widen a fiscal gap: fuel duty raised £24 billion last year and the budget watchdog estimates a £3.6 billion annual shortfall if the government continues to freeze duty. Markets are already sensitive to fiscal and political risk — UK government bond prices fell and 10-year yields hit their highest levels since 2008 amid investor worries about leadership uncertainty and potential additional spending. Separately, global oil prices have risen about 60% since the Iran war, adding pressure to pump prices and government revenue calculations.