China’s president Xi Jinping discussed cooperation in finance, the green economy and artificial intelligence during his first official phone call with Keir Starmer on Friday, Chinese state media reports.

Xi – who congratulated the prime minister for winning his election landslide last month – told Starmer that the world’s second-largest economy was “willing to maintain exchanges with the United Kingdom at all levels,” the readout added.

The call was reportedly made at Starmer’s request and is the first between Xi and a British prime minister since March 2022, when the Chinese leader spoke with Boris Johnson, the then Conservative prime minister.

Labour has said it will take a “clear-eyed” approach to China and has committed to conducting a cross-government audit of UK-China relations.

The foreign secretary, David Lammy, met his Chinese counterpart, Wang Yi, in July, on the sidelines of an association of southeast Asian nations event in Laos. During their talks, which were painted as constructive by his team, Lammy urged China to stop its companies from supporting Russia’s military.

The statement that the British Foreign Office issued after Lammy’s meeting hints at the strategic positioning towards Beijing the new Labour government is adopting.

The statement said:

He set out that the government would cooperate where we can, compete where needed and challenge where we must.

He made clear the UK would always stand firm in prioritising our national security, as well as supporting human rights.

As we reported in the opening summary, magistrates have been told to consider pushing back the sentencing of some criminals because of mounting concerns about overcrowding in prisons.

The prison population has increased by 341 over the last week, according to the latest statistics released by the Ministry of Justice.

It means there are now 88,234 people in prisons and young offender institutions in England and Wales (84,596 people in men’s prisons and 3,638 in women’s prisons).

The jailing of hundreds of rioters has pushed prisons towards full capacity, with there now being only 1,149 spare places across all jails.

As a result, HM Prison and Probation Service has been forced to prepare Operation Early Dawn, a contingency plan that allows defendants to be held in police cells until prison places become available and could mean their court dates are delayed or adjourned at short notice.

Good morning and welcome back to our rolling coverage of UK politics.

Magistrates have been asked to stop jailing criminals for several weeks in an attempt to ease pressure on Britain’s overcrowded prisons, according to reports.

The Times reported that Lord Justice Nicholas Green, who sits on the court of appeal, has issued a “listing direction” to the managers of magistrates’ courts in England and Wales saying that offenders who are on bail and likely to be jailed should have their sentencing hearings postponed until at least 10 September.

A Ministry of Justice spokesperson said the guidelines did not apply to high-risk offenders who were already on remand.

“Every delay in magistrates’ work adversely affects the timely delivery of justice and impacts victims, witnesses and defendants,” Tom Franklin, chief executive of the Magistrates Association, told The Times.

He said Green’s direction was “the latest sticking plaster to try to get through until the big release of prisoners on 10 September but just highlights the crisis that the justice system is in”.

There were already plans in place, from 10 September, for thousands of prisoners to start being released 40% of the way through their sentence as part of emergency measures announced last month.

Pressure on prisons increased with riots across England – that broke out after the fatal stabbing of three young girls in Southport – which led to more than 1,000 arrests. We will bring you reaction to the Times report throughout the day.

Here are some of the other main headlines:

• The average household energy bill is to increase by £149 from October after Ofgem said it was increasing its price cap as homes approach the winter months. The regulator announced it is hiking its price cap by 10% from the current £1,568 for a typical household in England, Scotland and Wales to £1,717 (about £117 cheaper than the cap last October). You can read more on the energy price cap rise in our business live blog here.

• Another two MSPs – Brian Whittle and Alexander Stewart – have backed the shadow security minister, Tom Tugendhat, as the next leader of the UK Conservative party, bringing his total MSP support to 10. It comes after eight other MSPs backed Tugendhat on Monday, saying he would be a “help, not a hindrance” north of the border.

• Rachel Reeves has insisted there will be “no blank cheques” for public sector unions amid Conservative claims that the government’s attempt to end long-running strikes has made it a soft touch. The chancellor said there had been no caving in to train drivers and junior doctors, and defended her decision to accept recommendations of pay review bodies for real-terms increases for the police, teachers and the armed forces on the grounds that they were needed to recruit and retain staff.

• NHS workers are being urged to accept a 5.5% pay increase offer from the Scottish government, a rise in line with that proposed in England. Unite, one of a number of trade unions which represent NHS staff in Scotland, is to ballot its members on the offer, but is recommending they accept.

It is Yohannes Lowe here with you today. Please do email me on yohannes.lowe@theguardian.com if you spot any typos or omissions.