Rachel Reeves defends Labour agenda as most Brits ask ‘is that it?’
Chancellor Rachel Reeves has defended Labour’s high tax and spending policies as new OBR forecasts reveal slower UK economic growth and rising unemployment in 2026
It was a bit pointless
Chancellor Rachel Reeves has stood firm on Labour’s high tax and spending policies amidst gloomier economic forecasts for growth and unemployment this year. Addressing the House of Commons, Reeves stated that revised predictions by the Office for Budget Responsibility (OBR) indicated her decisions as Chancellor were “starting to pay off”.
Her emphasis on “stability” was set against a backdrop of escalating tensions in Iran and the Middle East, with Reeves disclosing plans to meet with energy tycoons in the North Sea on Wednesday.
Despite the Chancellor’s confident stance, the UK economy is predicted to grow at a slower rate than previously anticipated this year, with growth expected to hit 1.1% compared to an earlier forecast of 1.4%.
The OBR also projected that unemployment would peak later this year, with the current rate at 5.2%. The watchdog anticipates unemployment will drop to 4.1% by the end of the parliament, as reported by City AM.
Shadow Chancellor Mel Stride accused Reeves of being “in denial” – while most of the reaction on social media consisted of people asking “is that it?”.
In a silver lining for the government, the OBR slightly increased its growth forecasts for 2027 and 2028, whilst inflation is expected to decrease more rapidly this year than outlined in the November Budget.
Reeves also disclosed that due to changes in calculations around government borrowing, the level of headroom had risen from £21.7bn to £23.6bn. Shadow Chancellor Reeves stated, “I know that an economy cannot be working if it is delivering only for a few people, in a few places. I believe that the working people who keep our country moving deserve a fair day’s pay for an honest day’s work.”
Reeves also noted: “Borrowing is down, living standards are up, and the economy is growing.” Montfort and Mizuho economists have argued that some of the OBR’s numbers are becoming “obsolete” and “irrelevant” due to disruptions in Middle Eastern trade routes.
Reeves’ recent Spring Statement was anticipated to be a low-key event, lacking new policy announcements. The aim was to boost businesses’ investment confidence and alleviate government-related tensions.
Despite prolonged speculation surrounding defence spending, the rise in minimum wages, and the challenges faced by students with university loans, Reeves avoided discussing specific policy details.
City researchers have pointed out that pressing concerns, such as the size of public sector debt nearing 100% of GDP, increasing youth unemployment, and commitments to upgrade the UK’s armed forces, remain unaddressed.
This may amplify the stakes at the upcoming Budget, as stronger economic headwinds could hinder government plans.
The Labour Party faces mounting pressure to revise its economic agenda amidst growing public discontent with the government’s actions.
Reeves seems focused on bolstering support and fostering stability in the face of intense economic scrutiny.
For the latest breaking news and stories from across the globe from the Daily Star, sign up for our newsletters.
