Britain’s economic outlook has taken a worrying turn, and the blame is increasingly falling at the feet of Labour’s Chancellor, Rachel Reeves. Revised data has revealed that the UK economy stagnated between July and September, the period following Labour’s election. If the final quarter of the year confirms negative growth, the UK will be officially in recession territory — defined by two consecutive quarters of contraction.
The revised GDP figures also show that living standards declined during this period, contradicting earlier expectations that they would remain flat. Moreover, these figures could be revised even lower once new net migration numbers are released next month, compounding the bleak outlook.
But perhaps the most troubling sign is the current state of the labour market. Recruiters are already warning that Britain is in a ‘hiring recession’, and the Confederation of British Industry (CBI) has expressed concern over a ‘worst of all worlds’ scenario. Companies are slashing output, reducing hiring, and bracing for higher costs in the year ahead.
To add to the financial woes, the cost of government borrowing has surged to levels not seen for over a year. Investor confidence has wavered, and hopes of further interest rate cuts have evaporated as inflation shows signs of resurgence.
So, what has Rachel Reeves, the Chancellor tasked with navigating Britain through these turbulent economic times, had to say in response to this gloomy prognosis? In her typical upbeat style, she claimed that these dismal figures were merely “fueling our fire to deliver for working people.” But one must ask: what planet is Reeves living on?
Her persistent use of the term “working people” has not only become irritating but, more troublingly, patronising. It’s as though she believes her words alone can somehow reverse the damage done to the economy under her watch.
It takes a particularly inept Chancellor to inherit a fragile economy – which, despite its struggles, was still showing signs of growth – and manage to push it into a tailspin in just under six months. But that is precisely what Reeves has accomplished.
The rot set in early. Reeves has consistently talked down the economy, eroding confidence when she should have been trying to bolster it. Her Budget in March was nothing short of disastrous. A record £40bn tax hike, alongside higher borrowing and spending, set the tone for a government seemingly bent on making economic conditions worse. The introduction of VAT on school fees, for example, added unnecessary costs to an already strained public sector. These are all basic missteps, rookie errors that could have been avoided.
In any other administration, Treasury officials and economists would have swiftly intervened to prevent such damaging proposals from making it to the final Budget. Yet, for some inexplicable reason, Reeves did not appear to consult heavyweight economists or financial experts, something that both Tony Blair and even Gordon Brown ensured during their respective tenures. Perhaps Reeves believed her own myth — that of being a former Bank of England economist — and felt she could navigate these treacherous waters alone.
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Meanwhile, Keir Starmer, Labour’s leader, has largely stepped back from the economic management side of things. Perhaps it is because, as many speculate, he is either too uninterested or uninformed to meddle. But, as Reeves’ tenure begins to unravel, Starmer may have no choice but to intervene. Her standing, once strong, has collapsed dramatically in just a few months. She has gone from being hailed as a business-friendly figure to potentially becoming one of the worst Chancellors in modern history.
The question now on everyone’s lips is: how long will Rachel Reeves last in her role? Her reputation is in tatters, and while there is still a chance for her to change course, there are few signs of any real reform or self-reflection. If anything, her rhetoric and policies have grown more entrenched, with no shift in sight.
The clock is ticking for Reeves, and the question is whether Keir Starmer will show the ruthlessness to make the difficult decision and remove her from office. Could she go down as Britain’s shortest-serving female Chancellor? The betting is already on.
