Autumn Budget: Rachel Reeves pledges to beat ‘gloomy’ economic forecasts
Rachel Reeves has insisted that the UK can overcome bleak forecasts that look set to box her into manifesto U-turns and further tax hikes.
The Chancellor wrote in The Guardian that she is “determined not to simply accept the forecasts”, pointing to interest rates cuts and trade deals as examples of Britain on the right track.
Reeves insisted that “the foundations of Britain’s economy remain strong”, with “business after business choosing Britain as a beacon of economic stability and success in a more dangerous world”.
She blamed “austerity, a chaotic Brexit and the pandemic” for the “deep scars on the British economy”, ahead of the Budget on 26 November.
No respite from the OBR
In an intervention hours after reports emerged that Office for Budget Responsibility (OBR) number-crunchers poured cold water on November’s Budget with a fresh £20bn productivity downgrade, the Chancellor wrote: “I don’t need a spreadsheet to tell me that too many working people in Britain feel the economy is unfair and does not work for them.
“And no one needs to be told that the economy has not been as productive as it could have been over the past 14 years.”
Addressing the OBR projection head on, Reeves said: “Those conclusions will be delivered at the budget next month and I am not going to pre-empt them.
“But I am going to be candid now that the productivity performance we inherited from the previous Conservative government and since the financial crisis has been too weak.”
Tough choices ahead for the Chancellor
While Reeves continues to be bullish on growth and the green shoots of investment in the UK, there are incredibly difficult choices for the Chancellor in the weeks leading up to the Autumn Budget.
The fiscal black hole could top £30bn, with Reeves thought to be targeting a roomier fiscal headroom than has been left at the last Budget and the Spring Statement.
Business leaders are increasingly worried about further tax raids on wealth creators, with HMV boss Phillip Halliday telling Morning Wire on Wednesday that the retail sector in particular is in need of a reprieve.