UK Ministers are working up sweeping plans for welfare changes including scrapping a key disability benefit for under-25s and replacing it with a multibillion-pound package of support to get into work, the Guardian reports

Welfare reform of this scope is a fiscal story first and a political one second, and the market-relevant transmission runs through the supply side: tightening eligibility for working-age benefits is designed to lift labour force participation, which over time bears on wage dynamics and the output gap, and through the near-term fiscal arithmetic, since scrapping a benefit while funding a replacement support package makes the net saving uncertain until costing is published. Episodes of this kind have tended to move gilts only when they shift the borrowing trajectory at the margin; the tell is whether the package is presented as net fiscal tightening or cost-neutral, and how the official forecaster treats it. Politically, proposals of this sort have a long history of being diluted between briefing and legislation, and early-stage plans floated via press reporting frequently do not survive contact with backbench resistance and consultation. The follow-ons worth noting are formal confirmation from the department, any costing alongside a fiscal event, and whether the savings are booked into the headline fiscal rules. As a report of plans rather than a decision, the signal is directional and its durability is the open question.