𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The Labour chancellor promised her “Plan for Change” would reboot growth, steady the public finances, restore confidence and put more money into working people’s pockets. Which only shows she hasn’t got a clue. In practice, it meant hiking taxes to fresh all-time highs, burying business in red tape, driving wealth creators overseas, and blowing a fortune on welfare, weakening the incentive to work. The result? The economy barely grew in the second half of last year and ground to a halt in January. Unemployment has surged. Almost a million young people can’t find a job. We all feel poorer. That’s some plan, chancellor.

Yet for a brief moment at the start of the year, Reeves looked like she might get lucky. As inflation eased, markets expected interest rates to fall. Lower borrowing costs would ease pressure on households and firms and revive the housing market. Her plan still wasn’t up to much, but the economic cycle was in her favour. Not anymore. Donald Trump’s war on Iran has blown it to pieces. Today, oil prices surged back above $100 a barrel as markets react to the US blockade of the vital Strait of Hormuz. Some fear they’ll hit $150 by the summer, driving inflation sharply higher.

Axel Rudolph, chief technical analyst at trading platform IG, said Saudi oil production is already at a five-year low and the West now faces an energy supply shock. “There’s a serious risk of stagflation.”

Today, the IMF issued a huge recession warning. We import a huge share of our energy and have little buffer against price spikes. Rising prices at the pump will only be the start. Higher fuel costs feed into transport, food, manufacturing, gas and electricity bills, and almost every part of the economy.

We also face interest rate rises as the Bank of England battles inflation. Reeves’s Plan for Change could only survive in the most benign conditions. She’s now facing a bitter economic winter.

The IMF expects UK growth to slow from 1.3% last year to just 0.8% this year. That’s a sharp downgrade and the worst cut of any G7 economy. Susannah Streeter, chief investment strategist at Wealth Club, said the downgrade is a fresh blow. “The economy was already flatlining even before war erupted in the Middle East, and now there is little means of resuscitation available.”

Adam French, head of consumer finance at Moneyfacts, warned the damage will hit every household. “Prices in the UK have already risen more than 28% since 2020. The second energy shock of the decade threatens to further erode spending power and living standards.”

Reeves has now attacked Donald Trump, saying she’s “very frustrated and angry” about his “folly” of a war with no exit plan. The Middle East crisis is real enough. But her Plan for Change was always a fantasy. Now it’s being torn about by cold, hard reality. She surely can’t survive this.