Build up to Reeves’s Budget has been a ‘circus’: top economist
Former Bank of England Chief Economist Andy Haldane has criticised the run-up to Chancellor Rachel Reeves’s upcoming budget, calling it a ‘circus of speculation’.
Speaking to Sky News, Haldane said this speculation is partly to blame for weaker-than-expected economic growth figures, as worries over tax hikes hit business and consumer spending.
“(It’s) a real circus that’s been in town for months and months now. And that by itself has been very bad, as it’s caused businesses and consumers to hunker down.
“One of the reasons we had a very weak growth number last week is because there’s that budget speculation, it’s dampened people’s willingness to spend. First and foremost, we need to stop that speculation.”
Haldane said that there was a clear correlation between this speculation, the government’s inability to get ahead of it, and the country’s poorer-than-expected financial figures in recent months.
“If you speak to businesses, speak to consumers, their fearfulness about where the axe will fall is causing them, not unreasonably, to save rather than spend, to not put their balance sheet to work. And that has taken the legs from beneath growth in the economy.”
Haldane urged the Treasury to decisively end any pernicious speculation that is dampening growth.
“We have this pretty much daily speculation about the next tax rise. And we need to re-engineer that process to either make it watertight, like the Bank of England’s monetary policy decisions, or a genuinely open consultation.
“Right now, we have this halfway house of leaks and speculation, which serves absolutely no one. Least of all the economy.”
He concluded that Reeves has been dealt a ‘bad hand, played, in truth, pretty poorly’.
Low-growth bites
The latest data show that the UK’s economy grew by just 0.1% over the last quarter, as Chancellor Rachel Reeves prepares for a difficult budget that could include tax hikes.
According to data from the Office for National Statistics (ONS), UK real gross domestic product (GDP) is estimated to have increased by 0.1% in Q3 2025, compared with growth of 0.3% in the second quarter of the year.
Last quarter’s subdued growth was driven largely by increases of 0.2% and 0.1% in the services and construction industries respectively.
Lower-than expected growth was driven largely by a cyber incident that paused production at a major vehicle manufacturer in September, contributing to a 28.6% decline in the manufacture of motor vehicles, trailers, and semi-trailers that month.
This drop in vehicle production detracted 0.17 percentage points from monthly GDP, with the Society of motor Manufacturers and Traders categorising the cyber incident as “a Category 3 systemic event”.
ONS data also revealed that there was a 0.2% increase in real household final consumption expenditure in Q3 2025, which is now 0.7% higher compared with the same quarter a year ago.
Growth within household consumption was driven by clothing and footwear, recreation, and culture.
