Rachel Reeves faced fresh humiliation after Britain\u2019s growth prospects were downgraded and unemployment soared to a four year high. Critics accused the Chancellor of \u201ckilling growth and crushing jobs\u201d as the International Monetary Fund cut its forecast for UK growth next year.<\/p>\n
Kemi Badenoch said Labour\u2019s economic failures are \u201cmaking all of our lives much harder\u201d. The Tory leader added that neither Ms Reeves or Keir Starmer<\/a> have the \u201cbackbone to do what\u2019s needed\u201d.<\/p>\n Her stark assessment came as the IMF also warned that prices here are rising even faster than in some developing economies, such as Peru and Senegal.<\/p>\n Britain is now expected to see the highest inflation in the G7 over the next two years, whittling away any growth in household incomes.<\/p>\n It is a major blow to Sir Keir\u2019s pledge to raise living standards in the UK.<\/p>\n Meanwhile, unemployment hit a four-year high and wage growth slowed.<\/p>\n The Chancellor will today (Wed) urge top global firms to invest in the UK at a Washington meeting of the IMF, where she will highlight her commitment to \u201ceconomic stability\u201d.<\/p>\n But new figures showed the jobless rate increased unexpectedly to 4.8% in the three months to August, up from 4.7%, to reach the highest rate since March 2021.<\/p>\n There are now 1.74 million people unemployed, up from 1.44 million 12 months previously.<\/p>\n Wage growth fell back to 4.7% in the three months to August, down from 4.8% in the previous three months. This is a real terms increase of 0.9% once inflation is taken into account.<\/p>\n Shadow Chancellor, Sir Mel Stride said: “Since taking office, Labour have allowed the cost of living<\/a> to rise, debt to balloon, and business confidence to collapse to record lows. Taxes are rising to record highs and families are being squeezed from all sides.<\/p>\n “Working people are feeling the impact every time they shop, fill up the car, or pay their mortgage<\/a>.\u201d<\/p>\n Helen Whately, Shadow Work and Pensions Secretary, said: \u201cIn just over a year, Labour has killed growth and crushed jobs and livelihoods, with families paying the price.\u201d<\/p>\n While in Washington, the Chancellor will meet business leaders from top US firms and highlight the Government\u2019s efforts to support major infrastructure projects by slashing red tape.<\/p>\n Ministers have introduced amendments to the Government\u2019s Planning and Infrastructure Bill to cut by six months the time projects can be held up by legal objections.<\/p>\n Lengthy judicial reviews have left over 30 infrastructure projects like the Norfolk Offshore Windfarm and A38 Derby junction improvements in limbo for years, Ministers say.<\/p>\n But the changes are designed to stop local councils and protestors blocking schemes such as roads, reservoirs, airports, and railways.<\/p>\n Experts said jobs figures showed the increase in National Insurance imposed in last year\u2019s Budget and Labour\u2019s new employment rights laws were hurting the economy.<\/p>\n Len Shackleton, Research Fellow at free market think tank the Institute of Economic Affairs, said: \u201cEmployers are extremely wary of taking on untried labour market entrants.\u201d<\/p>\n But Secretary of State for Work and Pensions, Pat McFadden said: \u201cThe numbers of people in work and looking for work are at a record high.\u201d<\/p>\n Fears are mounting that the Chancellor will use her Budget on November 26 to hike taxes to dig herself out of a major black hole.<\/p>\n She is also facing fresh demands to increase the lowest tax threshold to prevent millions of pensioners being hit by a punishing stealth raid.<\/p>\n Campaigners have warned that more than four million OAPs could pay tax on their state pension<\/a> for the first time in 2027 unless the Chancellor takes action.<\/p>\n The state pension<\/a> is now likely to rise by around 4.8% next April after wage figures were revised upwards yesterday (Tue).<\/p>\n But the increase means millions will be dragged over the \u00a312,570 income level at which pensioners would start to pay tax the following year.<\/p>\n Former pensions minister Sir Steve Webb, a partner at consultants Lane Clark & Peacock, said it\u2019s almost inevitable that many pensioners will be forced into paying tax unless changes are made.<\/p>\n \u201cWe can now be pretty certain that the new state pension<\/a> and the basic state pension<\/a> will rise by 4.8%,\u201d he said.<\/p>\n \u201cThis will keep the headline rate of the state pension<\/a> below the income tax threshold for one more year, but it will go above the tax threshold in 2027 if allowances do not rise\u201d.<\/p>\n Dennis Reed, director of the Silver Voices campaign group for the over-60s, accused the Chancellor of trying to undermine the pensions triple lock<\/a>.<\/p>\n \u201cThis situation is now urgent and the Chancellor can no longer duck and dive.<\/p>\n \u201cIf she continues to do nothing on the lower tax threshold the basic state pension<\/a> will be taxed by default and millions of pensioners will have their modest incomes cut.<\/p>\n \u201cI am concerned that this is a conscious plan to means-test the state pension<\/a> by stealth and undermine the triple lock<\/a> by the back door.\u201d<\/p>\n Both the Tories<\/a> and Labour have said they are committed to the triple lock<\/a> while Nigel Farage<\/a> says he hasn\u2019t decided yet whether Reform UK will.<\/p>\n Under the triple lock<\/a> policy, the state pension<\/a> goes up each year by either inflation, 2.5% or average earnings growth – whichever is the highest figure.<\/p>\n New figures from the Office for National Statistics (ONS) yesterday (Tue) revised estimates of the growth in average earnings in the year to May-July 2025 from 4.7% to 4.8%.<\/p>\n