The Chancellor blew the national budget AGAIN in May. So how do her Treasury officials respond? Incredibly, they claim she’s “stabilising the economy”.
I despair.
I’m not sure what’s more infuriating about the Labour Chancellor – that she keeps getting everything wrong, or that she always finds someone else to blame.
Whenever something goes south, she points the finger elsewhere: the Tories, Brexit, trade tariffs, “global instability”… anyone but herself.
Now, Treasury officials are left defending the indefensible. With nowhere else to turn, they’ve resorted to arguing that black is white.
Every day, the economic picture gets worse. Both for Reeves, and the rest of us.
Yesterday, we learned that inflation isn’t budging. It came in at 3.4% in May, still way above the Bank of England’s 2% target.
Reeves shoulders much of the blame. Her £25billion national insurance raid on employers kicked in in April, and businesses have passed the cost straight to consumers.
Then came a double whammy, as the CBI slashed UK growth forecasts to a meagre 1.2% in 2025, and just 1% in 2026. It also warned that unemployment will rise to 4.8% next year. That’s more people out of work.
Then the Bank of England refused to cut interest rates – and even they blamed the Chancellor’s policies.
And today? Even more bad news.
The Treasury borrowed a whopping £17.7billion in May. That’s £600million more than forecast, and £700million more than the same month last year.
Only once has a chancellor borrowed more in May: during the Covid pandemic.
This isn’t a one-off. It follows April’s £20.2billion blowout. That’s the second-highest April borrowing figure on record.
And this despite record tax revenues. Reeves raked in £82.5billion in May – up £5.3billion on last year – helped by higher income tax, VAT and corporation tax.
But still, it wasn’t enough. Spending continues to surge, driven by welfare bills and public sector pay rises.
Retailers also took a beating. Sales fell by 2.7% in May, as households tightened their belts. Food, clothes and department stores all took a hit.
It wasn’t just the weather. Shoppers are stretched. The public finances are cracking. Yet incredibly, Labour officials claim it’s all going to plan.
Chief secretary to the Treasury Darren Jones claimed today’s figures showed Labour has “stabilised the economy and the public finances”.
Seriously?
Apparently, Reeves has “taken the right decisions to protect working people, begin repairing the NHS, and fix the foundations to rebuild Britain”.
Here’s what he should have said: “We’ve destabilised the economy and the public finances, now we’re scrambling to undo the damage before it’s too late.”
He might have added: “Sorry.”
But no. The official line is spin. As usual.
Meanwhile, Reeves keeps overspending. Her fiscal headroom is vanishing. The books refuse to balance. And the full cost of her spending pledges hasn’t even landed yet.
Brace yourselves. More tax hikes are coming in the autumn Budget. Economists say Reeves has no choice.
If this is stability, I dread to think what instability will look like.
Unfortunately, we may be about to find out.