The Chancellor may finally get lucky tomorrow. She doesn’t deserve it.
Rachel Reeves will act like BoE rate cuts are her doing (Image: Getty)
Rachel Reeves has killed growth and sunk the economy. The economy shrank by 0.1% in October, putting us on course for a recession. On Tuesday, news broke that unemployment had climbed to a five-year high of 5.1%. When Labour took power in July 2024, it was just 4.2%.
That’s just two pieces of news, but there are dozens more and all tell the same story: Labour has been an economic disaster. Reeves inherited a stricken economy that was showing signs of recovery and crushed the life out of it with constant threats of tax hikes.
Businesses stopped investing and consumers stopped spending as they awaited last year’s maiden Budget, and it was even worse than feared, hitting us with £40billion worth of taxes. This year’s Budget was sheer chaos, and ended with another £26billion of tax hikes.
Amid a blizzard of leaks and speculation, the economy ground to a halt. It desperately needs to be revived, but Reeves hasn’t got a clue how to do that.
Instead, it’s fallen to others to save the day. Although typically, Reeves will try to take the credit for it, as she’s repeatedly done before.
Tomorrow, the Bank of England (BoE) will try to reanimate our flatlining economy, using the only weapon it has at its disposal – cutting interest rates.
The fact that we’re relying on the BoE shows what a desperate state we’re in. It doesn’t have a great track record either.
Its dozy governor Andrew Bailey missed the chance to head off resurgent inflation, assuring us it would be “transitory”. When he finally woke from his stupor, the cost-of-living crisis was raging out of control. Bailey never said sorry.
True to form, the BoE has been slow to cut rates too, feeding us a string of 0.25% scraps since base rate peaked at 5.25% in August 2025.
Tomorrow, it seems likely we’ll be served more of the same, with the BoE’s Monetary Policy Committee expected to cut base rate from 4% to 3.75%. News today that inflation fell to 3.2% in November will have helped make up its mind.
Some have suggested the MPC could cut it to 3.5%, but such decisive action seems unlikely from these nervous Nellies.
Lower interest rates would be an early Christmas present for hard-pushed businesses and consumers, and a festive boost for Reeves. It’s her golden ticket and Get out of Jail Free card rolled into one, but she doesn’t deserve it.
We may get that recession whatever the BoE decides to do. While Labour and Reeves remain in power, the economy will remain burdened by high taxes and high spending, and may struggle to grow at all.
As a result, we may see more urgent rate cuts next year, with HSBC predicting base rates could end 2026 at just 3%.
We’re now relying on the BoE to bail out our self-sabotaging Chancellor. And she’ll claim it’s all her work.
