Former Chief Economist of the Bank of England, Andy Haldane, has criticized Chancellor Rachel Reeves, stating she has mishandled her economic responsibilities. Haldane’s remarks came during an interview on the program “Mornings with Ridge and Frost,” where he assessed Reeves’ performance in light of upcoming financial challenges.
Haldane expressed concerns over Reeves’ leadership, saying she has been dealt a “bad hand” but has played it “pretty poorly.” He noted that repeated mistakes have hindered economic growth, particularly referring to the ongoing “black hole narrative” that he believes has drained vitality from the economy. Haldane emphasized the need for a change in approach to foster stability and growth.
As Reeves prepares for her autumn budget scheduled for November 26, 2023, the economic landscape remains uncertain. Haldane pointed out that the prolonged speculation surrounding the budget has negatively impacted both businesses and consumers, leading to a reluctance to spend. He highlighted a recent weak growth figure as evidence of this caution, linking it directly to the uncertainty surrounding fiscal policies.
In a significant shift, Reeves is reportedly set to freeze tax thresholds for an additional two years after abandoning plans to increase income tax. This decision comes as she grapples with a substantial gap in her spending plans, a situation that had previously led to speculation of significant cuts to public investment. The Chancellor’s change in strategy follows more favorable economic forecasts from the Office for Budget Responsibility.
Despite the move away from raising income tax, other potential tax increases remain on the table. Analysts are awaiting details of a possible levy on high-value properties, which could be introduced as part of the upcoming budget measures.
Haldane’s comments underscore the challenges Reeves faces as she navigates complex economic issues while trying to fulfill Labour’s commitments. He observed that Keir Starmer previously stated a desire to “tread more lightly” on citizens’ lives, a sentiment that has seemingly not materialized.
The political and economic environment is set for scrutiny as Reeves’ budget approaches, with stakeholders keenly observing how her policies will shape the future economic trajectory of the country.
