I\u2019ve just returned from my week-long summer holiday and spent the morning catching up on the chaos. The sun may be shining over Blighty, but economic storm clouds are gathering. In just a few days, Reeves has been hit by blow after blow, pushing Britain closer to crisis.<\/p>\n
Unemployment is up<\/a>. Inflation is rising. Debt is soaring. The triple lock<\/a> is under threat. Unions are plotting strikes. The Labour left is demanding more taxes. The wealthy are fleeing<\/a>. Farming is in crisis as rural businesses close at a record rate<\/a>. The public is growing mutinous, and the small boats keep coming.<\/p>\n Our public finances are on the edge. The budget deficit for June hit \u00a320.7billion. That\u2019s \u00a34billion more than forecast and \u00a37billion higher than a year ago. It\u2019s the second-worst June figure on record, surpassed only by the pandemic-era peak in 2020.<\/p>\n Former Bank of England economist Andrew Sentance now predicts the annual deficit will hit \u00a3170billion, more than \u00a350billion above official forecasts. That’s a terrifying figure. The gap will not be plugged.<\/p>\n And it\u2019s piled on top of our \u00a32.87trn national debt, which already costs more than \u00a3100billion a year in interest payments. That\u2019s wasted money.<\/p>\n Worryingly, those interest costs are rising as bond markets realise that Reeves has lost control.<\/p>\n Yet the Chancellor can\u2019t cut spending, the Labour left would revolt. Reeves\u2019s much-vaunted fiscal rules are collapsing. This isn\u2019t a temporary wobble. It\u2019s a full-blown summer meltdown.<\/p>\n Britain\u2019s deteriorating outlook hasn\u2019t gone unnoticed. The International Monetary Fund now warns Reeves may be forced to ditch the triple lock<\/a>, impose charges for NHS services or hit workers with fresh tax hikes.<\/p>\n In response, Reeves issued the usual robotic statement claiming the IMF report \u201cconfirms\u201d her plan is working.<\/p>\n Has her brain taken a holiday too?<\/p>\n Reeves didn\u2019t create the UK\u2019s long-term economic mess. But she\u2019s made it worse.<\/p>\n Last year’s decision to approve inflation-busting pay deals for public sector workers has only emboldened the unions, as resident doctors, teachers and nurses all demand more. Labour\u2019s biggest union donor, Unite, is on the warpath. Backbench MPs are demanding fantasy tax hikes<\/a>.<\/p>\n Reeves’s spring Budget hike in employer national insurance contributions is destroying jobs on a scale not seen for years<\/a>, just as critics warned.<\/p>\n Unemployment hit a four-year high in May. Economic growth is slipping, with GDP down 0.1% in April and 0.3% in May.<\/p>\n Reeves insists she\u2019s making Britain \u201cbetter off\u201d. The numbers say otherwise.<\/p>\n Lloyds Bank boss Charlie Nunn is urgently warning that yet more tax hikes will destroy growth<\/a>. But that\u2019s exactly what we\u2019re going to get.<\/p>\n