The chair of Thames Water has admitted he may have “misspoken” when he told a parliamentary committee that large bonuses to be paid to senior bosses out of an emergency £3bn loan were insisted upon by creditors.Sir Adrian Montague told the environment, food and rural affairs (Efra) select committee last week that the lenders “insisted” that “very substantial” bonuses of up to 50% of salary should be paid to company executives from the controversial loan in order to retain key staff. The proposed bonuses provoked fury as the company has said that its finances are “hair raising” and that it had come “very close to running out of money entirely” last year.However, the Guardian revealed that sources with knowledge of the details of the agreement, the term sheet for the loan, and court documents suggested that while the bonuses were agreed to by the creditors, they were not necessarily proposed by them.After the Guardian approached Thames to ask why its chair claimed the lenders “insisted” bonuses were paid, Montague wrote to the Efra committee to clarify his comments.“Following the session we have been approached by the Guardian who we understand intend to write a story suggesting that we misled the committee in relation to the company’s management retention plan,” he wrote in the letter made public by the Efra committee.“I appreciate that in the heat of the moment I may have misspoken when I stated that the creditors insisted on the management retention plan.”He added that the management retention plan, which included the bonuses, “rose from our discussions related to our liquidity extension transaction”, adding: “It was agreed that a retention plan was important to retain the people best placed to deliver the improved outcomes our stakeholders rightly expect during this current period of uncertainty and this was reflected in the term sheet we agreed with our creditors.”The Guardian understands that the committee is considering recalling Montague.In a judgment in February approving the loan, Mr Justice Leech cited evidence by Thames’s then finance director, Alastair Cochran, that the retention plan “was a matter for the board and the retention committee”. Leech said there was no evidence that it had to be approved by the lenders.skip past newsletter promotionafter newsletter promotionThe Guardian revealed last week the bonuses could be the first to be blocked under the government’s water (special measures) bill, which gives the regulator Ofwat powers to ban financial rewards for executives presiding over a failing company. Thames Water could be classed as such, as it is presiding over record sewage spills, heavily laden with debt, and on the brink of financial collapse.Thames is trying to argue that as the bonuses would come out of the loan rather than customer funds, and are retention payments rather than performance-based bonuses, they will not fall under the scope of the ban. Ministers say this is not the case and they can still ban them.

The artificial intelligence giant OpenAI recently announced that its ChatGPT platform now provides free image generation, prompting an online flood of images imitating the styles of the animator Hayao Miyazaki and other well-known artists. This has been heralded as the next step in the death of art and artists, joining the impending death – or zombification – of the writer, as AI-generated novels are slated to flood the market. But a peculiar feeling, or rather lack thereof, arises when trying to engage with AI art objects.It is not simply that AI lacks originality; after all, so too does most human art. The problem runs far deeper: the essence of art is lost in the process of its machinic invention and, with it, the very possibility of a democratic society is put under threat.Art is a defining human endeavor, not just for those formally called “artists” but for everyone. It is not merely about arranging colors, forms, sounds or words into pleasing products. The essence of art inheres in its making: the belief that, in the act of creating art, one imbues an object with something ineffable from within one’s own being. This belief, in turn, allows for another person to project their own sense of themselves onto the work and, in doing so, to commune with the artist at a level words cannot access.What grants art its infinite value is not the art object itself but rather what it allows by representing human experience and a singular being behind it: the way it is imagined to carry traces of an artist’s interiority, their unique feeling of being in the world. The process of making art is an act of transmission. It offers some unspeakable truth of oneself to another. In turn, the viewer finds in the artwork a reflection of their own inner sense, their inarticulable fears and desires. Art is a means of probing the gap between and within human beings through a shared but indirect language.But art also connects audiences with each other. When two strangers are struck by a work of art and each invests it with a sense of their innermost being – perhaps involving trauma, memory or impossible desires – they relate to one another at a level of intimacy and vulnerability that is otherwise inaccessible. The artist and the artwork function as a mediator, allowing for connection with others not as simply consumers but as fellow beings who, like each of us, feel themselves to be more than they can ever express. It’s why we watch films with lovers, paint murals with neighbors or read novels alone on rainy weekends.View image in fullscreenThe loss of this connectedness has profound consequences not only for our relationships but also for the broader social and political fabric. A democratic ethos depends on these ties: the recognition that, precisely because of our differences rather than in spite of them, we share fundamental aspects of being. Without shared experience that affirms and protects difference, the ties that hold democratic life together begin to fray. In their place emerge homogenizing substitutes – tribalism, homo- and transphobia, authoritarianism, fascist fantasies – that promise belonging through exclusion, hatred and violence.AI-generated images, music and prose disrupt the aesthetic dynamic upon which democracy depends. The machine does not desire, does not live in a body that imposes discomforts and misrecognitions, does not press against the limits of its own interiority. The work produced by machines is, in an important sense, uninhabited. There is no self – or rather, no being struggling and perpetually failing to be the ideal “self” it believes it should be – within the machine, and so there can be no transference or community with the other at the level of being.What remains is a kind of spectral mimicry, a simulacrum that may deceive the eye but not the soul. Or perhaps the problem is that, under the alienating conditions of contemporary capitalism, it does deceive our increasingly fragile souls, causing them to wither by taking on the lifelessness of the machine as if interchangeable with our deepest truth.Machines are things that make other things. Under their expanding influence, we too risk becoming nothing more than another thing – a process of thingification by which we forget what it feels like to be human and to connect not just as employees, workers, consumers or citizens but as beings capable of feeling and being felt in return.Walter Benjamin, in his 1935 essay The Work of Art in the Age of Technological Reproducibility, warned that fascism aestheticizes politics, offering the masses the illusion of expression while stripping them of material power. AI art functions in a parallel way: it offers the appearance of freedom and abundance while further consolidating control in the hands of those who own the means of production – not only of goods, but increasingly also of culture, imagination and language. AI is not democratizing art and knowledge; it is privatizing and automating it under the control of billionaires who, like the personality cults enforced by the führers of Benjamin’s era, demand that we view them as geniuses to whom we owe deference – and even, in the age of ChatGPT and social media, our very words and identities.Elon Musk, whose apparent public flirtations with Nazi ideology have become increasingly overt, exemplifies this dynamic. His AI ventures, like those of other tech billionaires, aim not at expanding human creativity but enclosing it within profit-driven, automated systems designed to concentrate power. For instance, since the Musk-backed xAI released its Grok chatbot and paired it with a deluge of AI-generated content across X, the effect has not been to foster creativity but to drown out dissent, amplify mimicry and disseminate Musk’s preferred political content. And, as we’ve seen at other major AI companies such asl Stability AI, Midjourney, and Deviant Art, users and artists report that their personal content and work are being scraped without their consent to train all these AI models. The result is that artificial abundance suffocates human expression and connection rather than expanding or freeing it. Just as fascism turns the masses into spectators of their own subjugation, AI art transforms us from creative participants into passive consumers of algorithmic spectacle – all while falsely persuading us we’ve been empowered.The implications of this process for humanity and our political future could not be greater. The philosopher Immanuel Kant described the encounter with beauty – whether in art or nature – as a vital force that animates human perception, desire and community. Beauty, Kant argues, cannot be captured by words or concepts; it cannot be explained, only felt. What we feel in the encounter with beauty, then, is a breakdown of our capacities for understanding and representation, and the emergence in their place of a “feeling of life” itself that defines our very being. This feeling pushes us to seek out others with whom we can share this sense of ourselves as absolutely unique individuals who, like beauty, cannot be reduced to any possible representation or identity. By doing so, beauty provides an experience by which we connect with one another in and through our differences rather than in spite of them. Kant called this shared experience of beauty the sensus communis. It is what makes art a fundamentally social and political force. It is also what makes art essential for resisting our own thingification today – and why AI art constitutes, as Miyazaki has put it, “an insult to life itself”.Art both creates and relies upon a community of feeling, an unspoken understanding between people who may otherwise be separated by time, geography or circumstance. This led the famed political theorist of authoritarianism Hannah Arendt, and Elaine Scarry after her, to identify Kant’s sensus communis and the cultivation of an openness to beauty as foundational to the possibility of democratic political life, and also fundamental to effective opposition to fascism. AI art cannot participate in this tradition; in fact, it militates against it.As AI art becomes ubiquitous, we are at a crossroads. Soul-diminishing substitutes for art, which reduce it to mere objects while erasing us as human subjects, threaten to destroy the social relations that real art sustains. Alternatively, they could spur us to reclaim art and aesthetic sensibility from their erosion under capitalism and to refuse the billionaire-controlled production of artificial culture.To do so, we must reject the temptation to turn to machines for art and language, and also – as people such as Mark Zuckerberg have been trying to entice us to do – for friendship, psychotherapy, wisdom or critical thought. We must refuse to entwine our deepest sense of ourselves with illusory objects that exploit rather than enrich us.While AI art poisons the soul, real art-making is a form of caring for the soul, both our own and others’. Art has always been a way of revealing ourselves to one another – of ceaselessly generating new meaning in response to the impossibility of capturing feeling – and of honoring the distance and differences between each of us without erasing them. In an era plagued by loneliness, alienation and a thinning sense of the real, we should be wary of anything that further erodes our capacity for human connection.AI can generate images, manufacture compositions and feign a stylistic fingerprint. But it cannot reach toward the other and their otherness in order to affirm and nurture our own. And without that, there is no art – only the sterile echo of an absent maker serving vampiric billionaires consumed by a need for power in place of connection.

Eric Reinhart is a political anthropologist, social psychiatrist and psychoanalytic clinician. Based in Chicago, he works with artists and art collectives around the world via remote connections

What’s big, beautiful and kept a lot of Republicans up late on Sunday night? There might be various responses to that question, but the answer I’m looking for is the One Big Beautiful Bill Act. Coming in at 1,116 pages, the bill isn’t quite War and Peace but it’s definitely big. Whether the mega-package of tax breaks and spending cuts is beautiful, however, is up for debate.And there has certainly been a lot of debate. The bill has been in limbo for a while because a few Republicans who consider themselves “fiscally conservative” are happy with the package’s extension of Trump’s 2017 tax cuts and increased spending for the military and immigration enforcement, but don’t think enough social and climate-related programmes have been slashed to pay for it all. In particular, they want deeper cuts to food stamps and Medicaid, which is a government programme providing health care to low-income people. Late on Sunday, however, in an unusual weekend vote, the hardliners relented a little and the House Budget Committee revived the bill. It still faces some challenges, but it is now closer to becoming law.If you are in a masochistic mood you can read all 1,116 pages of the bill. But the TLDR is that a more accurate name for the package would be the Screw Poor People and Make the Rich Richer Act. Or the Kick Millions Off Medicaid So a Billionaire Can Buy Another Yacht Act. This isn’t to say that every single element of the package is bad. There is one part, for example, where children under eight are given $1,000 for “Money Accounts for Growth and Investment”, AKA “Maga” savings accounts. In general, though, it’s pretty on-brand for Republicans.The deceitful name is on-brand too. The right is very cunning when it comes to legislative framing: it loves hiding nasty intentions behind noble-sounding names that are difficult to argue with. Emotive words such as “protect” tend to come up a lot. If a bill has “protect” and “women” in its name, you can be sure it’s not about protecting women, but about bullying transgender people. The Protection of Women and Girls in Sports Act of 2025 (which was blocked by Democrats in the Senate in March), for example, focused on banning transgender athletes from women’s sports. As the National Education Association said at the time, however, it “does nothing to promote equity in resources, funding, or opportunity, or to tackle the sexual abuses of athletes and subsequent cover-ups that have occurred in women’s sports”.Another thing Republicans love to do is to pass entirely unnecessary bills with highly emotive names, in order to amplify misleading information. Take, for example, the rightwing lie (repeatedly amplified by Trump) that Democrats want to execute newborn babies. This is obviously nonsense – infanticide is very much illegal in the US – and is a willful misinterpretation of the fact that doctors may sometimes give palliative care to dying babies. This didn’t stop cynical lawmakers from coming up with the Born-Alive Abortion Survivors Protection Act (a bill that has gone through a number of iterations but was passed by House Republicans earlier this year) requiring doctors to provide care for children born alive during an attempted abortion. Again, there are already laws in place that cover this. The bill was completely unnecessary but it gave Republicans a great opportunity to conflate abortion and infanticide. “Tragically, House Democrats opposed the bill, voted for infanticide, and opted to deny medical care to crying newborns on operating tables struggling to live,” Republican House Speaker Mike Johnson said after most Democrats voted against the legislation.Republicans have always understood how to use language to manipulate people far better than the Democrats. You may have forgotten the name Newt Gingrich but the former Republican House Speaker has been an integral part in the rise of Trumpism and the current culture wars. Back in 1990 his political action committee distributed a pamphlet called “Language: A Key Mechanism of Control” that instructed Republican candidates to learn to “speak like Newt”. Gingrich was very keen on exploiting emotive language and saying outlandish things that would make headlines and get the media inadvertently amplifying a preferred narrative. The Republican party may now be full of toadies – but you can’t deny they’re all fluent in Newt. Arwa Mahdawi is a Guardian columnistDo you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here.

The Reserve Bank of Australia has cut the cash rate by a quarter point to 3.85%, easing pressure on mortgage holders grappling with high living costs and elevated interest repayments.Economists view the RBA decision as a sign that Australia’s central bankers believe inflation is being tamed and that there is no longer a need for a borrowing rate over 4% to constrain households, especially as Donald Trump’s tariffs cast a shadow over the global economy.The Reserve Bank governor, Michele Bullock, said inflation was coming down, and the jobs market was robust.“So I think that’s so far, so good,” Bullock said.“We have got just a little more comfortable that things are going in the right direction, so we can take our foot off the brake just a little bit.”

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The cut, representing the second reduction this year, was partly designed to protect indebted households from Trump’s tariffs, which have spooked consumers and businesses, and created the potential for a protracted trade war.Bullock said the global situation was “not just uncertain, but unpredictable”.“It’s been a complete rollercoaster, I have to say,” she said.Australia’s economic outlook has generally soured in the past few months, putting downward pressure on interest rates.Employment growth was expected to ease more than previously forecast, while wages growth in the private sector will stabilise at a lower rate than previously forecast, according to the RBA.The subdued domestic outlook and global trade challenges sparked a discussion among the rate-setting board members over whether they should cut the cash rate by a bumper half-percentage point.“We did debate it and you’d expect us to debate it, quite frankly, but it wasn’t the strongest argument in the room,” Bullock told media.Bullock said while she didn’t expect Australia to fall into recession, the RBA was alert to the possibility if economic conditions deteriorate.While the quarter point reduction from 4.1% was widely anticipated, some market watchers had anticipated a half point cut and a few expected no rate cut.Financial markets have upped their bets on another quarter percentage point cut at the next RBA rate meeting in July.The decision to cut was supported by recent consumer price data, showing a key measure of inflation had dropped below 3% for the first time in three years. A strong jobs market and easing global tensions undermined calls for deeper RBA cuts.Economists view the rate cut as a shift back towards a neutral rate setting that neither ignites nor constrains the economy after a prolonged period of elevated borrowing costs.Mortgaged households would save an additional $114 a month for a $750,000 loan, according to Canstar, after the cash rate reduction flowed through to lending products.skip past newsletter promotionafter newsletter promotionAll of the major banks promptly declared after the rate announcement that they would decrease their standard variable home loan rate by 25 basis points in the coming weeks.The drop in borrowing rates was expected to drive homebuyer activity but Bullock said the onus was on federal and state governments to resolve housing shortages.“I acknowledge that some people are worried that as interest rates come down, housing prices will rise, but other policies have really got to step up here,” she said.Jim Chalmers said on Tuesday the cut was “welcome relief for millions of Australians”.“We are really pleased to see more help is on the way. And that’s what this decision today is all about,” the treasurer said.He said the RBA had noted there was “a lot of unpredictability and uncertainty in the global economy” which is “casting a dark shadow”.The Trump effectThe RBA focused its attention in its monetary policy on the deterioration in global trade caused by Trump’s tariff regime, marking a change from past statements that heavily focused on domestic matters.It even modelled an escalating “trade war” scenario, in which an ensuing global confidence shock could send unemployment soaring in Australia. In that scenario, the RBA would need to cut rates heavily to stimulate the economy.If a trade war escalated around the world, almost 300,000 Australians could lose their jobs, according to central bank forecasts.Permanent global increases in tariffs would halve Australia’s growth over the next two years, leaving the economy about $80bn smaller, and unemployment at nearly 6%.A protracted trade war would also force prices up if more businesses were forced to manage tariffs by lifting their prices, the RBA predicted.“Multinational corporations whose margins are compressed in markets where tariffs have been raised might [put] upwards pressure on prices in other markets such as Australia,” analysts wrote.If the trade battle eased faster than expected, however, a quick global recovery would mean the RBA “may be required” to keep the cash rate higher than markets now expect.

Sales at Greggs have picked up after the UK’s biggest bakery chain branched out into iced drinks, pizza boxes and a macaroni cheese that has gone viral on social media.The bakery, which is headquartered in Newcastle upon Tyne, reported a 2.9% rise in comparable sales in the first 20 weeks of the year, with an improving trend in the last 11 weeks helped by warm, sunny weather.New beverages and food on the shelves also helped step up sales growth, including a peach iced tea and a mint lemonade. Greggs said that a newly launched mac and cheese “went viral on TikTok”, with a video of the snack played more than 3m times.Roisin Currie, the chief executive of Greggs, said consumers’ disposable income was on the rise, helped by the April increase in the legal minimum wage, but the evidence was that households were “saving, not spending, even though they have got more money in their pockets”.She said Greggs had been helped by the good spring weather, which had “encouraged people to come out of their home more”, but added that consumers remained “cautious”.Currie said the whole retail industry was in a “heightened state of alert” after the cyber-attacks on Marks & Spencer, the Co-op and Harrods, and Greggs had continued to invest in improving the security of its systems. Peter Green Chilled, a small food distributor to supermarkets, said it had been hit by a cyber-attack this week. “The industry is coming together to share learning,” Currie said.Shares in Greggs rallied on Tuesday, rising 6%. However, the stock has suffered this year, losing about a quarter of its value since January, amid broader concerns around slowing sales growth.The near 3% sales rise marks an improvement compared with its recent performance – sales rose by 1.7% in the first nine weeks of the year and by 2.5% in the final quarter of last year.John Moore, a senior investment manager at the wealth manager RBC Brewin Dolphin, said that while Greggs had been going through a tougher period recently, there were optimistic signs in the update. “Recent price increases … suggest the company is trying to right-size in the aftermath of the national insurance increases, recalibrating its rollout and growth ambitions,” he said.This year Greggs increased the price of its sausage rolls by 5p to £1.30, blaming wage, tax and food cost rises. It formed part of an average 4% price rise on key items including coffee and doughnuts.skip past newsletter promotionafter newsletter promotionCurrie defended the decision to increase prices at the time, saying the company had to pass on the rising cost of its wage bill after two-thirds of Greggs’s workers received a 6.1% pay rise in January.The chain, which now has more than 2,000 shops, opened a record 226 last year, closed 28 and relocated 53. It said on Tuesday it had opened 66 new shops this year and closed 46, which included 21 relocations. It expects between 140 and 150 net openings this year.Elsewhere, its rival SSP, the owner of food outlets such as Upper Crust and Camden Food Co, reported a 5% increase in comparable sales in the first half of its financial year. Shares in the business rose 6%.

Hundreds of former post office operators will be compensated by the Post Office after it accidentally leaked their names and addresses in June 2024.The Post Office has confirmed that individual payouts will be capped at £5,000, although higher claims may still be pursued.It comes almost a year after 555 victims of the Horizon IT scandal had their personal details published on the Post Office’s corporate website.The Post Office said victims would receive £5,000 or £3,500 depending on whether the address published was current.In a statement, it said: “We have written to all named individuals either directly, or via their solicitors.“If there are any individuals whose name was impacted by last year’s breach, but who have not received information about the payment for some reason, they can contact us or ask their solicitors if they have legal representation.”The law firm Freeths said that 348 clients, out of the total 420 it represented, who had their data breached had already received payment. Freeths said it had been told most of those affected would receive a “significant interim compensation payment”.“We welcome the progress we have made with this case, but there is still a long way to go to recognise the devastating impact of this breach for those affected,” said Will Richmond-Coggan, a lawyer at Freeths.Chris Head, a former post office operator, told the BBC that while he welcomed the Post Office admitting the data breach error, it had taken “far too long to right this wrong”.“We cannot underestimate the level of pain, anxiety, stress and worry that so many people have had to suffer through this new episode,” he told the broadcaster. “The impact on myself and my family has been profound on top of an already traumatic past 10 years due to the Horizon scandal.”skip past newsletter promotionafter newsletter promotionNews of the data breach first emerged in June last year. The Post Office apologised at the time and said it was working in cooperation with the Information Commissioner’s Office, the regulator for data protection and information rights.Nick Read, who was chief executive of the Post Office, said at the time that the leak was a “truly terrible error”.The incident has angered post office operators, many of whom suffered hardship after more than 900 were wrongly prosecuted in what has been described as the worst miscarriage of justice in British legal history.Last October, the chancellor, Rachel Reeves, said in her debut budget that the government had set aside £1.8bn to cover all compensation claims. The government is the sole shareholder of the Post Office and is therefore responsible for paying out. Compensation payments have so far ranged from £10,000 to more than £1m.