Labour policies pushing the country to the economic brink and potentially worse

06 Mar 2025

On Monday Britain’s most powerful quango, The Office for Budget Responsibility will deliver its latest verdict on the economy. It will make for grim reading on every measure.

The fiscal watchdog is expected to halve growth forecasts for next year, from 2 percent to 1 percent, to reflect the anemic state of the economy under this Labour government.

It will warn that matters are likely to get significantly worse, pointing to the huge global uncertainty caused by President Trump’s tariff crusade and the prospect of a forthcoming trade war.

Rachel Reeves fiscal headroom will evaporate at the stroke of a pen, leaving her with a hole in the public finances of around £20 billion. This leaves the chancellor with no choice but to announce a multibillion-pound squeeze on public spending in the face of a backlash from almost all cabinet members and backbenchers.

The government will also publish the official assessment on Starmer’s £5 billion package of welfare cuts, throwing salt on the wound of many Labour MP’s who are already in a state of ferment. More than two million people will be affected by the cuts, many of whom will be pushed in to poverty.

The announcements will do little to improve the mood on the back benches, where Labour MP’s are publically branding ministers “abhorrent” and accusing them of putting the lives of disabled constituents at risk.

The bad news will keep coming-on April 1st, less than a week after Reeves spring statement-the chancellors £25 billion hike in the rate of employers national insurance will kick in, hitting every business across the UK and even affecting nurseries, universities and hospices.

The impact of the of the tax rise-which is in essence a jobs tax will be highlighted by the OBR, which will point to the fact it is likely to lead to lower wages, higher prices and lower economic growth. For a government that came to power promising growth at all costs. The messaging is a challenge to say the least.

The next day might bring even worse news. President Trump has earmarked the 2nd of April as “liberation day”,although the rest of the world might call it ‘world tariff day’-when the USA imposes reciprocal tariffs of up to 25% on all imports from countries that impose VAT on American imports.

The reality for Starmer, Reeves and Rayner is it is much easier in opposition than it is in government. There is tough decisions to be made in government, the current government is not helped by talking down the country and deploying a suite of reckless socialist economic policies.

The UK is heading for recession and possibly worse unless the government change course and adopt business friendly growth policies.