Rachel Reeves Has Played ‘a Bad Hand’ with Budget, Says Top Economist

Economic Slowdown: Rachel Reeves Faces Tough Criticism

Top economist Andy Haldane has delivered a stinging critique of Chancellor Rachel Reeves’ handling of the UK economy, describing her approach to the budget as “a bad hand played pretty poorly.” This scathing assessment comes as evidence mounts that the British economy is facing significant challenges in the run-up to the budget announcement on November 26.

Uncertainty and Speculation

Haldane, who served as the chief economist at the Bank of England until 2021 and was recently appointed to a government economic advisory panel, argues that holding the budget relatively late in the year has created an environment ripe for speculation. He believes this atmosphere of uncertainty has contributed significantly to weaker-than-expected economic growth.

Business Confidence Takes Hit

The impact of this economic slowdown is palpable across various sectors. According to a survey by Barclays, more than half of small and medium-sized enterprises (SMEs) are pausing investment plans until after the budget announcement on November 26. This pause in spending reflects widespread concern over potential changes in taxes and policies that could affect their business operations.

Andrew Coombs, CEO of Sirius Real Estate, a FTSE 250 landlord, echoed this sentiment, stating, “We are not intending to invest any more money in the UK until at least June of next year, post the local elections, because we’re not really sure that we can depend on what the baseline of value will be then.” Coombs added, “Whilst we’ve got a government with a majority, I’m not sure we’ve got united government,” highlighting the political divide that exacerbates economic uncertainty.

Consumer Confidence Plummets

The situation is not just limited to businesses. A survey by S&P Global Market Intelligence revealed that British household confidence in their own financial wellbeing has fallen to a four-month low. Maryam Baluch, an economist at S&P, commented on the intensifying concerns across UK households, noting, “A sense of unease permeates across UK households.” Many are grappling with uncertainty regarding potential changes in taxation and public spending that could significantly impact their financial stability.

Joe Vorih, CEO of Genuit, a FTSE 250 construction supplier, also weighed in on the economic backdrop, stating, “We expect the market to remain subdued for the remainder of 2025 and into next year due to the economic and political backdrop.” Vorih further highlighted that Genuit’s outlook is being negatively impacted by the Chancellor’s budget deliberations, which have created a climate of purchasing uncertainty.

Investment Freeze: A Wider Impact

The freeze in investment decisions extends beyond SMEs. Santander’s trade barometer found that 47% of UK businesses are considering taking their business abroad amid weakening economic growth at home and concerns about tax hikes. This represents a significant shift from earlier this year when only one-third of businesses expressed similar sentiments, and it more than doubles the figure reported in autumn 2023.

The financial impacts are also being felt by larger companies like Genuit, where a profit warning was issued due to the Chancellor’s prevarication.

Joe Vorih emphasized the need for greater policy stability from Reeves, stating, “We are hopeful that the UK government budget will confirm policies that are supportive of our industry.” His remarks underscore the broader economic challenges facing both small and large businesses in the lead-up to the upcoming budget.

As the November 26th budget approaches, all eyes remain on Chancellor Rachel Reeves. The economy is under pressure, with businesses and consumers alike bracing for the policy announcements that could shape their future.