UK Chancellor Rachel Reeves announced a sweeping cost of living package funded by closing a tax loophole exploited by oil companies. The measures aim to ease economic pressures from the Iran crisis, with the chancellor targeting energy firms that have structured affairs to pay minimal UK corporation tax on overseas trading profits. The reform will raise "hundreds of millions of pounds annually" to support businesses and families facing rising living costs.

The package includes a £300mn "Great Summer Savings" scheme cutting VAT from 20% to 5% for attractions during school holidays, alongside free bus travel for children. Reeves also announced reduced VAT on children's meals, soft-play areas, cinemas, and concerts. A £350mn chemicals resilience fund will help energy-intensive businesses, while the planned fuel duty increase has been scrapped and mileage rates increased by 10p.

Treasury estimates show agrifood tariff cuts will save consumers more than £150mn annually on products including baked beans, crisps, and chocolate. The chancellor expects supermarkets to pass these savings "in full." Energy bill support for the poorest households begins in October, with the price cap projected to rise to £1,850 annually from July. Reeves demonstrated her market credibility while positioning herself as a key economic voice regardless of potential leadership changes.