Afternoon.

It's Wednesday 14th October: the Chancellor is working out how to pay for his Budget, MI5 has warned about growing security threats and some water companies could be forced to reduce customers' future bills.

Kettle on.

📅 On this day: In 1066, the Battle of Hastings took place, with William of Normandy defeating King Harold II and paving the way for the Norman conquest of England. Harold was killed in the fighting, although whether an arrow really struck him in the eye remains a matter of debate.

Chancellor John Healey is reportedly preparing a Budget that avoids additional borrowing, meaning new spending commitments would need to be paid for through higher taxes or cuts elsewhere. 

According to the Financial Times, the Treasury is working out how to fund measures including help with winter energy bills ahead of the Budget on 28 October.

The difficulty is fairly straightforward. The government wants to help households with rising costs, but Britain's public finances leave limited room for extra spending. Borrowing more would add to the national debt, while raising taxes or cutting spending comes with its own political headaches.

One proposal reportedly under consideration would make online marketplaces such as Amazon and eBay responsible for collecting VAT owed by qualifying sellers, particularly overseas retailers.

The money could help fund lower business rates, a tax paid by businesses on properties such as shops. It's intended to give high-street businesses a more level playing field against online competitors.

Nothing is final yet. But with two weeks until the Budget, the Chancellor has some fairly awkward sums to finish.

Britain's domestic intelligence agency has warned that threats from hostile countries and extremist groups are becoming increasingly complicated. In his annual assessment, MI5 director-general Sir Ken McCallum said the agency's workload involving hostile states has quadrupled over the past decade.

Russia and Iran are particular concerns. MI5 says foreign governments are increasingly using criminal networks and other intermediaries to carry out activities without directly involving their own officials. That can include sabotage, intimidation and attempts to gather sensitive information.

Artificial intelligence is another growing challenge. MI5 has established a new centre to assess how AI could be misused by hostile states and extremist groups, alongside risks from increasingly capable AI systems themselves.

The warning doesn't mean an attack is imminent. It reflects how the threats facing Britain are changing, and why the security services are having to adapt.

Summer might be over, but parts of England are still struggling with drought. Three water companies are seeking permission to restrict certain non-essential uses of water by businesses, as shortages continue into autumn.

These restrictions go further than the familiar hosepipe ban, which mainly affects households. Businesses could face limits on activities such as washing vehicles, filling certain swimming pools or cleaning outdoor surfaces.

According to the Environment Agency, drought conditions remain widespread, with several reservoirs still under significant pressure. The proposed business restrictions haven't all been approved yet. Water companies need government permission before introducing them.

Unfortunately, the arrival of autumn doesn't automatically refill a reservoir.

Water companies in England and Wales could be required to reduce customers' bills after falling short of performance targets. Regulator Ofwat has proposed reductions totalling £240m, including £107m that would be returned through lower bills in 2027–28.

Companies are assessed against targets covering things such as leaks, pollution and customer service. Those that perform poorly can face penalties, while better-performing companies can earn rewards.

The figures aren't final yet, and any reductions would come through future bills rather than immediate refunds. Overall bills could still rise if other price increases outweigh the reductions.

Online retailers Wayfair and Buy It Direct, alongside fitness chain Gold's Gym, have faced more than £6m in penalties following investigations into online pricing practices.

The Competition and Markets Authority, Britain's consumer watchdog, says the three cases have also resulted in over £440,000 in compensation for customers.

The watchdog is cracking down on misleading discounts, hidden charges and sales tactics that pressure shoppers into making rushed purchases.

So that enormous FLASH SALE ENDS TONIGHT banner might not always deserve quite the urgency it suggests.

American chipmaker Nvidia has pledged $250m in computing resources over five years to support AI safety research in Britain.

The distinction is that this isn't $250m being handed over in cash. Nvidia is providing access to the powerful computing technology researchers need to test advanced AI systems.

AI safety research looks at how these systems behave, where they can go wrong and how to make them more reliable. As AI becomes more powerful, having the equipment to test it properly is becoming increasingly valuable.

Bank of England economist Huw Pill has questioned expectations that UK interest rates will rise four times over the next year. 

Financial markets have been anticipating several increases as higher energy prices threaten to push inflation up. But Pill, who has previously supported raising rates, suggested four increases might be excessive.

Higher interest rates can help control inflation by making borrowing more expensive and encouraging saving. Unfortunately, that also means more expensive mortgages and loans for households.

Restoring damaged rivers could deliver substantial benefits for wildlife, communities and the economy, according to new analysis from the Wildlife Trusts and its partners.

Their study of the River Trent estimates that every £1 invested in restoration could generate more than £7 in wider benefits, including cleaner water, healthier wildlife habitats and reduced flood damage.

That's an estimate of the value created, rather than a guaranteed financial return. But it's an encouraging reminder that protecting nature can bring practical benefits beyond making the countryside look nicer.

Scientists have identified a new dinosaur in Britain. The slightly embarrassing detail is that its fossil had been sitting in a museum collection for almost 100 years.

The meat-eating dinosaur, named Invictibellatrix amberina, lived on the Isle of Wight around 120 million years ago. It was roughly the size of a large tiger, had unusually long claws and is the first known European member of its dinosaur group.

It's a reminder that scientific discoveries don't always require an expedition to some remote corner of the planet. Sometimes the exciting bit has been sitting in a drawer since the 1920s, waiting for someone to have another look.

Have a great day.

See you tomorrow.