Chancellor Rachel Reeves promised growth but instead she’s destroyed it and there’s worse to come.
This one’s on you Rachel: how Reeves broke the UK economy (Image: Getty)
This morning, we learned the UK economy contracted by 0.1% in October, according to the Office for National Statistics (ONS).
That’s not a one-off. It shrank by 0.1% in September, too.
It’s a far cry from the start of the year, when the ONS triumphantly described the UK economy as going “gangbusters”.
GDP grew 1.2% in the six months to June 30, the fastest in the G7.
The fun stopped the moment Labour took power on July 6.
PM Keir Starmer’s kicked off his tenure by telling the world how terrible our economy was. Then chancellor Rachel Reeves waded in and warned of brutal tax hikes in her Budget on October 30.
Britons then had four long months to find out just how bad that Budget would be.
Businesses stopped investing. Foreign capital dried up. Wealthy non-doms fled. Consumers stopped spending.
Growth slowed in July and August and went into reverse in September and October. Labour dragged us from best performer in the G7 to second worst after Italy.
I dread to think what November and December will bring.
Rachel Reeves sets out plans for growth in the north
This recession was made by Labour. There’s no pandemic. No energy shock. No global downturn. They can’t even blame this on the Tories, although I’m sure they’ll try.
The Conservative Party created havoc but at least Rishi Sunak left Labour a growing economy.
Starmer and Reeves sank it by whingeing on and on about their £22billion black hole. They behaved more like student activists than people charged with actually leading the country.
The real damage is still to come. Today’s GDP figure pre-dates the Budget, which was held at the end of October.
That means it doesn’t reflect the impact of the biggest peace time tax raid in history, which saw Reeves carpet bomb businesses and consumers with £40billion of tax hikes.
We’ll see the full impact next year, by which time there’s a pretty good chance we’ll be in recession.
Reeves decision to hit employers with an additional £25billion of national insurance (NI) is the real growth destroyer.
Businesses will cover the cost by investing less, hiring less, paying less and firing more. Many firms will go to the wall. How will that encourage growth, chancellor?
Labour’s NI hike will also revive inflation as companies hike prices. That will keep interest rates high, further destroying confidence and grow.
Reeves did this. All of it.
Today, she robotically droned on about how Labour’s Plan for Change will “deliver economic growth as higher growth means increased living standards for everyone, everywhere”.
The only way she’s delivering growth is by spending an additional £30billion, which she will add to our already groaning national debt.
Instead of growth we will get a recession. This means “lower living standards for everyone, everywhere”, in case Reeves doesn’t grasp the economics.
Just when we thought we were pulling out of the crisis, Labour has wilfully dragged us back in. It almost makes me miss the Tories.
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