Andrew Neil Critiques Rachel Reeves' Budget as "Disastrous" for UK Economy

Andrew Neil has expressed strong disapproval of Rachel Reeves’ budget, labeling it as "disastrous" for the UK's economic landscape. In his column for the Daily Mail, he observed that the Chancellor seemed anxious during Prime Minister's Questions, which he interprets as a sign that more tax hikes or cuts to public spending may be on the horizon.

Neil pointed out concerning trends such as rising inflation and persistently high interest and mortgage rates, which are prompting companies to halt hiring and investment. He noted that confidence in business is significantly shaken, suggesting that a renewed feeling of economic decline is emerging. Furthermore, after discussions with major financial stakeholders, Neil conveyed that Reeves' management of the economy could jeopardize Labour's future.

He raised alarms about bond market reactions, indicating that the government may struggle to borrow money effectively due to rising yield demands from investors. The recent surge in the government's 10-year bond yields to 4.82% has marked the highest point since the financial crisis of 2008. With increasing borrowing needs and a tightening fiscal space, Neil warns that Reeves is nearing her limits, having initially set aside £10 billion in her budget but now potentially left with only £1 billion for future expenditures.

Looking ahead, he cautions that if the economy remains stagnant in the coming months, further tax increases might be necessary to stabilize finances. Despite the broader global context of rising borrowing costs, Neil asserts that Labour has exacerbated the situation, shifting from an initially growing economy to one struggling significantly. Instead of boosting the private sector—the key to sustainable growth—he contends that the government has instead dealt a harsh setback to the economy.