Chancellor Rachel Reeves has been slammed by critics and accused of “going into hiding” after official figures revealed that the UK economy had ground to a halt under the weight of her tax hikes.
According to the figures, the country’s output flatlined in July, prompting many business leaders to hit out at the Government and warn that it “cannot tax its way to growth”.
Following the release of the dismal numbers, a Treasury spokesperson did acknowledge that economy does “feel stuck”, however Ms.Reeves herself has remained conspicuously silent on the matter ahead of her Autumn budget – which could spell further tax hikes in November.
Pulling no punches, Shadow Chancellor Sir Mel Stride hit out at his political opponent and said: “It’s no wonder the Chancellor has gone into hiding while the economy crumbles on her watch.”
Up until now, Ms.Reeves has readily and frequently commented on economic figures, and just last month celebrated the “strong start to the year” after the Office for National Statistics reported growth of 0.4 per cent in June.
However, Treasury officials confirmed she would not be commenting on the latest set of bleak figures, in a stark deviation from her behaviour up until now – and during a week when the public would appreciate stability and consistency more than ever, following the departure of Deputy PM Angela Rayner, and British Ambassador to the US, Peter Mandelson.
The latest ONS figures revealed that the economy has stalled in July, with output recorded over three months having slowed down to a sluggish 0.2 per cent higher.
Ms Reeves raised taxes by £40 billion back in October 2024 as part of her first budget, a move which was designed to plug the £22 billion “black hole” in the nation’s finances.
It is currently feared that this year, she may need to find even more money to plug the growing gap, with estimates ranging between £20 billion and £50billion more this time around.
Public finances have spiralled in recent years, with the country now boasting the unfortunate accolade of highest inflation of all G7 countries, along with UK government borrowing costs sitting at a 27-year high on global bond markets.
Yet while taxation is one option available to try and balance the books, the boss of Barclays yesterday urged Ms Reeves to cut spending instead.
“We need to curb expenditure at the government level,” said the bank’s chief executive C.S. Venkatakrishnan.
And it appears Sir Mel also agrees taxation isn’t the answer, as he added: “Raising taxes again won’t fix Labour’s economic mismanagement.”