Rachel Reeves has announced cuts to welfare spending and a squeeze on Whitehall budgets in her spring statement in a bid to get a grip on the country’s finances. The Chancellor sought to blame global events for the need to change her fiscal plans but failed to acknowledge the part she has played in the UK’s sluggish economy.

Shadow Chancellor Mel Stride on Thursday (March 27) accused Ms Reeves of coming to office without a plan and talking down the economy. The Chancellor defended her spring statement by telling Sky News the Labour Government’s ambition is to make people better off.

Ms Reeves on Wednesday set out savings of around £14billion to ensure she meets her “non-negotiable” goal of balancing day-to-day spending against tax receipts, rather than borrowing.

But she was forced to concede the economy will only grow by 1% this year, half the rate previously anticipated, according to the Office for Budget Responsibility (OBR). Longer-term, the budget watchdog issued forecasts which were a bit more positive for the Government with house-building on course to meet a four-decade high after planning reforms.

Ms Reeves was also able to point to higher growth forecasts for the years ahead which, if accurate, should ease the pressure on her to lower spending or increase taxes in the remaining years of this Parliament.

She also received some welcome news on Wednesday, with official figures showing consumer price inflation fell to 2.8% from 3% the previous month. Though still above the Bank of England’s 2% target, Ms Reeves will hope easing price pressures will lead to further interest rate reductions. This would lower the Government’s whopping debt interest payments.