Growth figures give boost to Reeves – but it’s too early to get carried away
At the end of last year, Rachel Reeves was under fire for the impact of budget speculation on Britain’s economy.All of the noise about fiscal holes, tax increases and spending cuts before her late November budget was having a real-world effect on the spending decisions of households and businesses.The latest official figures will therefore come as a boost for the chancellor.Britain’s economy grew more strongly than expected in November, up 0.3%, despite the fog of uncertainty in the lead up to her critical tax and spending speech at the end of the month.
Much of the increase was outside Reeves’s direct control.After manufacturing output was crushed by the Jaguar Land Rover cyber-attack earlier in the autumn, a recovery was always anticipated.With the return of its production lines close to capacity, factory output in November raced ahead.Elsewhere there were signs of the budget speculation hitting output.Real estate activity slumped in November, as property owners and house hunters put things on hold while awaiting the outcome of the chancellor’s tax decisions.
Consumer-facing businesses also struggled, partly fuelled by the uncertainty sapping household confidence,However, the UK’s dominant service sector was stronger than anticipated despite these headwinds,Within the Treasury there is acknowledgment that too much speculation has throttled growth,As a result, the chancellor has promised a no-frills spring statement,Leaving a significantly larger buffer against her fiscal rules and removing a requirement for the Office for Budget Responsibility to check whether they are being met in the spring is all designed to limit the chances of a repeat.
Having come through this period of pre-budget speculation in better shape than feared, the hope now for Reeves is that Britain’s economy could strengthen further in the coming months.So far surveys show a small uptick in December.The latest figures from the purchasing mangers index – a closely watched barometer of business activity – show private sector output improved as firms put the chaotic months of tax speculation behind them.There are also positive tailwinds.Inflation is expected to fall significantly – helped by Reeves’s budget measures.
The Bank of England predicts the headline rate could drop by as much as 0.5 percentage points, enabling it to hit its 2% target by the spring.There are tentative signs of the jobs market stabilising, workers are benefiting from real wage growth and households are sitting on elevated levels of savings.If consumer confidence improves, this could translate into stronger retail, hospitality and leisure spending.However, economists say there are reasons not to get carried away.
Business leaders warn cost pressures remain high.A rising minimum wage, tax increases, elevated borrowing costs, and the cumulative impact of past increases on all of these fronts is likely to weigh heavily.In its 2026 outlook, the Resolution Foundation said this could finish off many so-called “zombie firms” that have been able to just about keep paying the bills – leading to a sharp uptick in unemployment.Geopolitical concerns have risen up the agenda.Donald Trump’s increasingly interventionist approach to world affairs could chill the world economy and business investment.
Meanwhile, on the domestic front Labour has a tough round of May elections to overcome – raising the spectre of fresh political instability.November might have been a stronger month than anticipated.But there is considerably more work still to be done for the chancellor to lift the clouds over the UK economy in 2026.
Treachery and stupidity to the fore as Robert Jenrick defects to Reform | John Crace
One is too many and 1,000 never enough. Addiction is a tricky business. What starts as fun inevitably, insidiously, tears away the soul. And there are signs that Nigel Farage’s press conference habit is getting out of control. He started off at one a week
Robert Jenrick: from remainer to rightwinger with ruthless reputation
For a long time, Robert Jenrick’s transformation from a David Cameron-supporting remainer to an anti-immigration rightwinger did not convince many of his political peers – least of all Nigel Farage.Only last year, the Reform UK leader was describing him as a “fraud” and saying he was sceptical that Jenrick was genuine, dubbing him “Robert the Generic, Robert the Remainer and Robert the I Don’t Stand Particularly for Anything at all”.“There are people in politics who are there through conviction and there are people in politics who are there because they want to reach rank, position and all that comes with that,” he said at the time.“I’m really still not sure about Jenrick, to be honest with you, I’m really not sure.”Now, the verdicts of some of Jenrick’s Tory colleagues on his political behaviour are similarly damning and centre on his unbridled ambitions
Tory defectors: who has already joined Reform UK and who may follow?
With Robert Jenrick’s defection, the number of current or former parliamentarians to have joined Reform from the Conservatives has risen to 18. Some of the best known are likely to be prominent voices for Nigel Farage’s party in the run-up to the next election.There are others within the Conservative party thought to have considered their position in recent months. But Farage has claimed that the value of such additions to his ranks is dropping – and said he would accept no further defectors from the Tories after the May elections, arguing that by then his party’s strength would be so clear that they would have little to add.Here are some of the most prominent figures on both sides of that divide
‘The mask has slipped’: What have Jenrick and Farage said about each other in the past?
Like other Conservative recruits to Reform UK, Robert Jenrick’s defection has come with no shortage of lacerating past comments about Nigel Farage and his other new colleagues.When Nadhim Zahawi defected to Reform on Monday, Conservative headquarters were quick to unload the former chancellor’s previous comments about Farage on to social media.In the case of Jenrick, below is just some of the ammunition they have been drawing on once again.Today I took forward a bill to stop the two-tier sentencing rules that come into force in just 18 days. While Nigel Farage swanned off to Cheltenham to forget his troubles
More than 20 England council elections likely to be delayed until 2027
More than a third of local authorities in England have asked to postpone their elections in May, saying they are unable to deliver them effectively during an overhaul of local government, according to administrators.The requested postponements have sparked unrest and fierce criticism in some councils, with police being called to a council meeting in Redditch this week after insults were traded and members of the public decried a delay as “arrogant”.Sixty-three council areas could opt to postpone elections until 2027, after some were already delayed until May 2026, as two-tier authorities are being combined into single unitary councils.According to data compiled by the Association of Electoral Administrators, 27 of the 63 eligible local authorities – more than a third – have sought a postponement to either district or county council votes this year.Others were yet to make a decision on whether to ask for a delay before the request deadline at midnight on Thursday
Multimillionaire leader of Reform in Scotland refuses to reveal net worth
The multimillionaire financier who has been made leader of Reform UK in Scotland has refused to say how wealthy he is, claiming that is a private matter.Malcolm Offord, formerly a Conservative party life peer, was announced by Reform’s leader, Nigel Farage, as the party’s first Scottish leader, 10 weeks before a Scottish parliament election in which Reform is expected to win up to 18 seats.Offord is a yachting enthusiast who wins races at Cowes, collects classic cars and recently bought a mansion on the banks of Loch Lomond for £1.6m without a mortgage. He previously endorsed suggestions the public could be charged to use the NHS
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