Austerity, Brexit, and the pandemic are to blame for the UK’s weaker economy: Reeves
Chancellor Rachel Reeves says that the UK can defy gloomy economic forecasts, despite reports she is facing a £20 billion shortfall in her November budget.
Writing in the Guardian, Reeves said that her decisions at next month’s budget “don’t come for free and they are not easy”, but that she was determined to beat the forecasts.
“I’m 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,” she wrote.
“Austerity, a chaotic Brexit and the pandemic have left deep scars on the British economy that are still being felt today. But the task facing our country – facing me as chancellor – is not to relitigate the past or let past mistakes determine our future.
“I’m determined that we don’t simply accept the forecasts but we defy them, as we already have this year. To do so means taking the necessary choices today, including at the budget next month.”
Reeves said the UK’s economic foundations remained strong – citing five interest rate cuts, wages growing faster than inflation and investment in public services and infrastructure to boost growth.
“They are determined to talk of an economy that is broken because that is the only way their politics can breathe. They talk of a Britain that is in a permanent state of decline because that is the height of their ambitions for it. I reject both claims,” she said.
Reeves also ruled out a return to austerity measures, although she indicated that some spending cuts should be expected.
“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, with the cost of living still bearing down on family budgets,” she said.
“I don’t need a graph to tell me that the world has become a more dangerous and uncertain place, pushing up the cost of borrowing for countries across the world. 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.”
