Wednesday morning news briefing: Inflation stealth tax looms – The Telegraph

Also from this AM's Front Page newsletter: Water tankers sent in as village runs dry & pint-sized pooches top dog for dating. Sign up below
As the cost-of-living crisis bites deeper still, there is yet more bad news for household finances. Taxpayers will have to hand over an extra £30 billion a year as soaring inflation drags millions of people into higher income tax bands, according to a leading think tank. 
Rising prices and Rishi Sunak’s freeze on tax thresholds has left workers facing a stealth raid, the Institute for Fiscal Studies said. 
The change is down to so-called "fiscal drag", which pulls people into higher income tax brackets as pay rises. 
Tax allowances usually rise in line with inflation, but were frozen by the former chancellor until 2026. 
As economics editor Szu Ping Chan reports, the £30bn in extra income tax is almost four times as much as the Government was originally expected to raise from Mr Sunak’s policy and will wipe out any gains from tax cuts promised by Liz Truss. 
These are the 10 other hidden taxes that could make you poorer this year.
Both Tory leadership hopefuls are under mounting pressure to offer more financial support. The pair once more traded blows on economic policy during a feisty hustings in Darlington last night. 
Mr Sunak vowed to slash business rates this autumn as he warned that Ms Truss’s economic plans would see the Tories get "absolutely hammered" at the next election. 
Political correspondent Nick Gutteridge examines where the pair stand on key issues. It is not too late to sign up to our own hustings event tomorrow, hosted by associate editor Camilla Tominey.
An Oxfordshire village is the first place in Britain to run out of water in the heatwave, forcing residents to rely on deliveries. 
Thames Water had to send water tankers and hand out bottles. The company has announced a hosepipe ban for 15 million people across its area, which includes London, in the "coming weeks". 
It came as the former head of Natural England said that water firms have sold off reservoirs that could have helped ease drought to housing developers. 
And, four decades on, the same questions are being asked as during the heatwave of 1976. Daniel Capurro looks back at how The Telegraph covered that summer.

Your View: As gardens resemble dust bowls and rivers dry up, we would like your opinion on how water shortages can be tackled in future. Email a short message to YourStory@telegraph.co.uk, with your name and Front Page in the subject. Your view might be included in an article.
Size really does matter, it seems. It is a tactic that has long been employed on dating apps, but now academics have found that a cute little dog really may help men win the affections of women. 
When a man is walking a small dog he is seen as less intimidating and threatening than when alone, a study has found – with women feeling safer, calmer and more in control. 
Science correspondent Joe Pinkstone explains which breeds were found to put people most at ease in the study.
In today’s cartoon, Matt finds some light relief in soaring energy bills. For a weekly behind-the-scenes look at his work, sign up for his newsletter.
Unisex lavatories | Schools that only offer "gender neutral" lavatories are acting unlawfully, Suella Braverman has said, as she uses a major speech to set out the Government’s legal advice on transgender pupils. The Attorney General warns today that teachers who allow their students to "socially transition" to the opposite gender without their parents’ consent could be in breach of their duty of care to the child and open themselves up to a negligence claim. Read her article for The Telegraph.
Explosions rocked a Russian air base in Crimea, killing at least one person, in what appeared to be an unprecedented Ukrainian attack. If confirmed, the strike would represent a dramatic escalation in the five-month conflict. Nataliya Vasilyeva says it fuels speculation Ukraine’s armed forces carried out the bombardment with long-range heavy weapons donated by the United States. The latest is in our live blog.
Emma Raducanu slumped to a straight sets defeat against reigning champion Camila Giorgi at the National Bank Open in Toronto – and admitted she needed to get better at coping with the pace of play at the top level. Molly McElwee says the first-round loss marked less than ideal preparations for world No 10 Raducanu, as she looks towards her US Open title defence. Meanwhile, the Rugby Football Union criticised Eddie Jones’s scathing comments on the role of public schools in rugby.
Heathrow’s Spanish owner is exploring a sale of its 25pc stake in the business amid interest from a French investor, following a bitter row with the regulator over airport charges. Helen Cahill reports that Ferrovial, Heathrow’s largest shareholder, is understood to be in talks with advisers about a potential sale of its stake in Britain’s largest airport. It came as airline tickets soared by a third for British travellers attempting summer getaways, as companies cash in on travel chaos.
Greek-style orzo with baked feta | In this recipe by Pip Payne, the quick cooking time and rice-like size and shape of orzo mean it is perfectly suited to traybakes.
Hoards of Britons flock to the Spanish costas each year – their long-stretching sands and family-friendly resorts have long been staples on the holiday calendar. But many might be surprised to learn that the beloved destination is home to the third largest number of Unesco World Heritage Sites in the world. However, you need not follow the herd to Barcelona or Seville. As Paul Richardson explains, Spain has many other alluring cities to discover… with hardly any tourists.
‘We use our rivers as sewers and it is vile’ | Amy-Jane Beer’s new book explores the pollution and abuse of the nation’s rivers, but also the reverential place they hold in our culture. Joe Shute speaks to the author fighting for the future of Britain’s waterways.
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