Britain is on the brink of recession. Revised figures show there was zero growth in the three months from July – when Labour was elected – to September.
If the economy contracted in this last quarter, that means we are close to two consecutive quarters of negative growth and in recession territory.
The UK growth figures also suggest that living standards fell in that period, with GDP per head down rather than remaining flat as originally believed.
What’s more, living standards may be revised lower still as officials update the net migration numbers next month.
If that’s not bleak enough, recruiters warn the UK is already in a ‘hiring recession’, while the Confederation of British Industry says we are facing ‘the worst of all worlds’ with companies reducing output, cutting down on hiring and preparing for higher prices next year.
Making matters worse still, the cost of government borrowing has jumped to levels not seen for over a year as investors lose confidence in the UK. Hopes of further interest cuts have been dashed because inflation is on the move again.
A Budget for growth? Rachel Reeves delayed her statement until October but spend months talking the economy down – the move has backfired
So what do you suppose Rachel Reeves had to say about this cheerful midwinter prognosis? These figures are only ‘fuelling our fire to deliver for working people’.
What planet is Reeves on? And her persistent use of ‘working people’ is not only irritating but deeply patronising.
It takes a particularly dense Chancellor to inherit a pretty poor economy – but one showing healthy signs of growth – and to make it nosedive in just under six months.
Yet that is precisely what Reeves has managed to do since taking office.
First came her constant, and often vindictive, talking down of the economy, a move which has sapped confidence rather than boosted it. Second, came the disastrous Budget with a record £40bn tax hike, higher borrowing and spending.
You reap what you sow. The Chancellor has made mistake after mistake, with many policies simply not adding up. Take the damaging rise in NI employers’ tax which won’t raise as much because firms will stop hiring.
Abolition of business property relief for small businesses and changes in inheritance tax for farmers will be devastating for growth and food security.
VAT on school fees means higher costs for the state. These were all rookie schoolboy errors. Some might say pranks.
In any other administration, they’d have been tossed out by Treasury wonks or economists before the Budget as unworkable.
What’s odd is that Reeves doesn’t appear to have made an effort to bring on board heavyweight economists to help, as Tony Blair and even Gordon Brown did.
Maybe she believed too much in her own myth about being a Bank of England economist? To date, Keir Starmer has left handling the economy up to No 11.
He hasn’t meddled as so many prime ministers like to do, either because he’s clueless or not interested.
But that may change as Reeves’s reputation lies in tatters. In a matter of months, she has gone from being a one-time hit with the business community to potentially going down in the history books as one of the worst Chancellors.
She could still change tack. Yet there’s no sign of that. Quite the opposite.
The question now is whether Starmer is ruthless enough to get shot of the country’s first female Chancellor, and maybe one of its shortest-serving.
The books are now open for bets on how long she will last.