ANDREW NEIL: If Rachel from Accounts repeats her self-deluded guff about UK plc ‘burning shiny’ at Davos subsequent week, she’ll be laughed out of city…

What a difference a year makes! Last January Rachel Reeves arrived at the annual World Economic Forum in Davos, Switzerland, to be feted by its financial ‘Masters of the Universe’ and world leaders alike.

At a packed breakfast event hosted by Wall Street mega-investment bank, J P Morgan, the then shadow chancellor pledged to ‘restore Britain’s reputation as a place to do business’. And the global moneymen and power brokers couldn’t get enough of her.

A fawning media reported that one-on-one meetings with Reeves were the ‘hot ticket’. Davos movers and shakers assumed (correctly) that Reeves would be the next Chancellor of the Exchequer – the first ever woman to hold that high office, which appealed to the WEF’s woke sensibilities.

Davos, which I have attended several times, is a rather dull Alpine jamboree for global capitalists, politicians of both Left and Right panhandling for corporate investment, prodigious international networkers (aka grifters), media cheerleaders and multiple hangers-on. It softens its hard corporate edges and naked avarice with piously progressive attitudes towards diversity, equality and inclusion, which it rarely does much about.

Reeves felt very much at home. She spoke breathlessly of ‘non-stop meetings’ and ‘incredibly intense’ exchanges of views.

A year ago Davos regarded Rachel Reeves as the future, now, after only six short months in power, she’s more likely to be seen as yesterday’s woman, writes Andrew Neil

Here was the second most important person in the British Labour Party, only recently led by an anti-business hard-Left socialist, who spoke the WEF’s language on economics and society. No wonder Davos lapped her up. Her ‘dance card’ was chock-a-block.

Reeves is off for another Davos twirl this coming week with a high-powered British retinue, including Business Secretary Jonathan Reynolds (who was with her last time).

She plans a repeat performance of last year claiming she’s ‘on a mission to win round the world’s investors’. She should brace herself for hitting mission impossible instead.

A year ago, Davos regarded her as the future. Now, after only six short months in power, she’s more likely to be seen as yesterday’s woman, a lame duck chancellor who no longer excites much interest.

Last time she was in Davos her mantra was that Labour was the party of ‘economic credibility’. If she repeats that message next week she’s more likely to be met with muffled guffaws than rapturous applause – for the simple reason that the claim is no longer, well, credible.

After just a few months in power and one disastrous Budget, Reeves has already taken a wrecking ball to the business- friendly credentials she spent years cultivating among the sort of folks who go to Davos. Whether she realises this is moot since she seems to be in denial about her predicament.

‘I’m going to be in Davos,’ she said this week, ‘to tell some of the world’s biggest companies and investors that UK plc is burning bright.’ This is self-deception of a high order. Nobody at the WEF is going to buy it.

Reeves even indicated to the BBC that she saw herself as an ‘Iron Chancellor’ in the way Margaret Thatcher was the ‘Iron Lady’. Well, to paraphrase the response of a US senator when the hapless Dan Quayle, running for vice president, compared himself to Jack Kennedy: ‘I knew Margaret Thatcher. Chancellor, you are no Margaret Thatcher.’

She inherited the fastest-growing economy in the G7 last July but will arrive in Davos having talked down the UK economy so relentlessly, it has slumped into zero growth.

Her badmouthing of Britain was designed to further Labour’s base political strategy to blame everything on its Tory inheritance, an exercise in which she was ably supported by her very own little Sir Echo, Keir Starmer. Such is their joint economic naivety that it never seemed to occur to them that global markets and investors would take heed of what they were saying – and turn their backs on Britain. Instead of seeing a Britain ‘burning bright’, they fear a Britain burning down.

BNP Paribas, Europe’s second biggest bank, has just cut its 2025 economic growth forecast for the UK from 1.4 per cent to 1.1 per cent – and even that is probably optimistic. The bank says the ‘UK is entering a period of stagnation’ and concerns are growing over whether Britain can sustain its massive mountain of debt without lower interest rates.

Reeves still had the effrontery to claim this week that she’d ‘drawn a line under instability’ and ensured ‘the sums add up’. Neither statement is true. If she repeats them in Davos, she’ll be laughed out of town.

The Chancellor attends a 2023 World Economic Forum meeting in Switzerland alongside Sir Keir Starmer

Even though global debt markets were clearly choking on an explosion of government borrowing by most major economies, Reeves used her first Budget last October to borrow an extra £142 billion over the next five years, despite the Office for Budget Responsibility warning her the result would be a smaller economy by 2030 than if she’d stuck with Tory borrowing plans.

What’s worse, most of this borrowing is not for investment but to placate Labour’s public-sector base with higher wages – without any quid pro quo in terms of higher productivity, without which there can be no sustainable growth.

This borrowing binge – add together new debt and the recycling of old debt and we will borrow close to £300 billion this year – at a time when all governments are having to pay more to entice investors to take their debt, is the reason Britain has found its borrowing costs rising faster than most.

The UK, for example, now pays about 1.3 percentage points more than Italy to borrow over ten years, even though Italy’s national finances have long been precarious. The markets are even less impressed with Reeves-Starmer than they are with President Macron, despite the fact France has no effective government, no Budget for 2025, higher debt and a bigger annual fiscal deficit.

The scale of ineptitude required to achieve this dramatic downgrade in Britain’s international reputation should not be underestimated.

Nor will it have gone unnoticed among those about to gather in Davos. Reeves gave herself about £10 billion of headroom in the Budget to stay within her fiscal rules. Higher borrowing costs have eroded nearly all of that, which is why Reeves is being forced to look at public spending cuts.

JP Morgan, her erstwhile Davos breakfast host in 2024, said yesterday a new £20 billion ‘black hole’ now threatened the UK’s future fiscal stability. Put simply, her sums don’t add up.

If they did, Reeves would not be casting around for cuts in public spending. But nobody seriously believes Labour has the guts or the inclination to cut spending by enough to restore fiscal credibility.

So Reeves will continue to bang the drum for revenue-generating growth, implying that sovereign wealth funds and major private equity players – which she aims to schmooze in Davos – can’t wait to invest in Labour’s infrastructure plans and green initiatives.

She shouldn’t hold her breath. Global sentiment about Britain has soured. Investors see a government which strangled a nascent recovery at birth with a rise in National Insurance contributions costing companies £25 billion a year, a further £5 billion in extra costs coming down the pike with Labour’s pro-union workplace reforms, a minimum wage now two-thirds of average wages and serious questions about Reeves’s ability to keep debt under control.

The Chancellor returned from her trip to China last week ludicrously boasting she’d drummed up £600 million (over five years!) in business for Britain. That’s less than the chump change President Xi finds down the back of his sofa of a weekend. It was almost as if Beijing was toying with us.

She’ll likely come back with even less from Davos, where all eyes will be on Donald Trump, who doesn’t even plan to turn up. But he will address the WEF remotely a few days after his inauguration on Monday.

At a time when Davos-style globalism has never been more under threat from nationalist politicians like Trump, they will be hanging on his every word, desperate to learn what he has to say about tariffs, Europe, Ukraine and China – while our own dear ‘Rachel from Accounts’, briefly last year’s belle of the ball but now bereft of novelty or authority, risks being cruelly relegated to a Davos sideshow.