Chancellor Rachel Reeves will announce £15.6billion for new rail, tram and bus schemes in the North, Midlands and South-west of England as Cabinet battles over next week’s Spending Review continue. Speaking in Greater Manchester, which will benefit from 1,000 new electric buses, Ms Reeves is expected to say that “a Britain that is better off cannot rely on a handful of places forging ahead of the rest of the country”.

The funding comes ahead of next week’s Spending Review, when the Chancellor will set out how much money will be spent on key public services for years to come. But intense talks about the review, which will set out day-to-day spending up to 2029 and investment spending up to 2030, are going to the wire as arguments continue over funding for schools, housing, police and new energy schemes. The Prime Minister’s spokesman confirmed on Tuesday that the statement was not yet finalised, saying: “Work is ongoing to deliver the final shape of the Spending Review.”

Here the the projects being announced by Ms Reeves on Wednesday for each region, and the amount that will be spent:

West Midlands – £2.4bn

• Metro extension connecting Birmingham city centre to new sports quarter, unlocking £3billion from private investors
• This is the first phase of the new mass transit from East Birmingham to North Solihull.

West Yorkshire – £2.1bn

• Spades in the ground to start building West Yorkshire Mass Transit by 2028, with the aim of first services by the mid-2030s
• Transforming six transport corridors in West Yorkshire not covered by the mass transit routes, including through new bus stations at Bradford and Wakefield.

Greater Manchester – £2.5bn

• Major infrastructure projects to unlock new homes, jobs and better connect communities, including growing and transforming the Metrolink tram network, with new tram stops in Bury, Manchester and Oldham and a Metrolink extension to Stockport
• A fully electric Bee Network, with a zero-emission public transport network across bikes, buses and trams by 2030, including the purchase of 1,000 new electric buses.

South Yorkshire – £1.5bn

• £530million to renew the tram network, providing a fleet of new, replacement vehicles, modernising tram stops, as well as maintenance to improve reliability
• £350million to reform South Yorkshire’s buses, with franchised buses operating in Sheffield, Doncaster and Rotherham by 2027 and across the whole of South Yorkshire by 2029.

Liverpool City Region – £1.6bn

• £100million for three new bus rapid transit routes to the Liverpool John Lennon Airport, Everton stadium and Anfield.
• Buying a new fleet of buses for the city region’s franchised bus network, beginning with St Helens and the Wirral in 2026 and then Sefton, Knowsley, and North and South Liverpool in 2027.

North East – £1.8bn

• Metro extension linking Newcastle and Sunderland via Washington, serving one of the largest advanced manufacturing zones in the UK.

West of England – £0.8bn

• £150million to improve rail infrastructure across the region, including funding to support WECA’s ambitions for increased frequency of services between Brabazon and the city centre
• £200million for mass transit development between Bristol, Bath, South Gloucestershire and North Somerset.

Tees Valley – £1bn

• £60million for the platform three extension at Middlesborough station, unblocking the local network.

East Midlands - £2.0 billion

Designing a new mass transit system to connect Derby and Nottingham, encompassing road, rail and bus improvements across the Trent Arc corridor.

The Institute for Fiscal Studies warned that real-terms cuts to some government departments are “almost inevitable” in the spending review on June 11 if Ms Reeves tries to slasg NHS waiting lists by increasing health spending and the Government boosts defence spending.

Polling by IPSOS found only 16% of voters think Rachel Reeves is doing a good job, giving her the same rating as Kwasi Kwarteng when he was chancellor. In addition, 73% of voters think the economy is in a poor state, with 56% blaming Labour, as opposed to the previous Conservative government or world events.

Gideon Skinner, senior director UK politics at IPSOS, said Labour had “a very brief honeymoon period” after last year’s General Election victory. He warned: “We are seeing this growing disappointment with Labour.”

The economy will grow slowly this year, according to an analysis from the British Chambers of Commerce, which represents businesses across the country. It published a new forecast predicting GDP would rise by 1.1%, more than previously expected but low by historical standards.

Head of research David Bharier said smaller employers “are not experiencing investment growth, as they continue to grapple with a range of cost pressures – most notably the rise in National Insurance Contributions, cited as the top concern by firms”.

Relatively high growth in the first quarter of the year will be offset by the impact of Labour’s National Insurance rise and US tariffs on businesses in the rest of the year, the organisation said. The extra costs imposed on businesses will also lead to inflation rising to 3.2%, and it is unlikely to fall to the Treasury’s target of 2% before 2027.

Vicky Pryce, chairwoman of the British Chambers of Commerce Economic Advisory Council, said: “A small growth upgrade for 2025, largely fuelled by a bumper first quarter, is masking some persistent challenges under the bonnet of the UK economy.”

Homeowners were warned not to expect rapid cuts in mortgage payments as Bank of England Governor Andrew Bailey said the speed at which UK interest rates will be lowered is “shrouded in a lot more uncertainty”.

Mr Bailey told MPs on the Treasury Committee: “I think the path remains downwards.” He warned international economic developments, including US president Donald Trump’s tariffs were “negative for world growth and activity”.

UK interest rates were cut to 4.25% from 4.5% in May, but there is no immediate prospect of a return to the cut-price mortgages many homeowners grew used to when the Bank’s base rate remained at 1% or below between 2009 and 2022.