Chancellor receives chastening rebuke from one of the UK’s most respected economists ahead of next week’s crunch Budget
Rachel Reeves will deliver her Budget on November 26 (Image: Getty)
So there we have it. This shambolic government’s handling of the forthcoming Budget resembles a circus, and Rachel Reeves is the ringleader as it continues its ruinous run into town.
Andy Haldane, the former top economist at the Bank of England, knows a thing or two about economic competence. It’s just a shame the same cannot be said about the Chancellor. Petrified families who continue to suffer because of soaring inflation and the mounting cost-of-living crisis have been forced to pull the handbrake on pre-Christmas spending because of swirling rumours about what her Budget will contain.
We know it will almost certainly be a tsunami of financial misery, but Mr Haldane has accused Ms Reeves of making things worse in an almost unprecedented rebuke, as a series of highly damaging leaks have killed consumer confidence.
As Ms Reeves and the clowns in the Treasury big tent continue to perform a financial hokey cokey, respected Mr Haldane said rumours about what pain would be unleashed on November 26 had, “without any shadow of a doubt”, a direct impact on growth.
In an eviscerating assessment, he said fevered speculation was partly to blame for weaker-than-expected economic growth.
The respected former rate-setter said “repeated mistakes” by the Government have been “sucking all life” from the economy ahead of the dreaded dispatch box set piece.
Businesses and consumers have hunkered down and are refusing to spend (Image: Getty)
Economists are, by nature, measured, sober, and very much not prone to using inflammatory language.
And that is why it is worth taking notice when Mr Haldane, chief economist at Threadneedle Street until 2021, said the build-up to the Budget has been a “real circus that’s been in town for months and months now”.
And not only that, the shambles “without any shadow of a doubt” has had a direct impact on growth.
In a blistering attack on Ms Reeves and her Treasury chums Mr Haldane, who served on the Bank of England’s rate-setting committee for seven years, said: “It’s caused businesses and consumers to hunker down.
“One of the reasons we had a very weak growth number last week is because there’s that Budget speculation… (it’s) dampened people’s willingness to spend.
“And first and foremost, we need to stop that speculation.”
Last week that saw Ms Reeves appear to rule out a manifesto-breaking income tax hike… just weeks after a doom-laden emergency speech from Downing Street in which she tried to soften up the public for such a move.
Confused? You ought to be. But Mr Haldane’s point is the Treasury has been as leaky as Britain’s borders.
None of the pre-Budget shambles should really surprise anyone coming as Ms Reeves shapeshifts and blames the parlous state of the economy on Brexit, austerity, and the Tories – but never herself.
The fact is the economy on her watch has seen inflation soar, wage growth slump, unemployment reach 5%, and business confidence crash through the floor.
Mr Haldane summed up the crisis coursing through the UK perfectly when he said: “If you speak to businesses, speak to consumers, their fearfulness about where the axe will fall is causing them, not unreasonably, to save rather than spend, to not put their balance sheet to work. And that has taken the legs from beneath growth in the economy.”
And on Ms Reeves herself, he said the Chancellor had been dealt a “bad hand, played, in truth, pretty poorly”.
But for families, businesses, and the wider economy, the stakes could not be higher.
