𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves has blamed Brexit for the UK economy’s “weak” performance ahead of unveiling an expected package of tax hikes in the Autumn Budget next month. The Chancellor said the Budget, in which she will attempt to plug a fiscal black hole of around £50 billion, will tackle “the world as it is, not necessarily the world as I might like it to be”. Speaking at a gathering of business leaders and investors in Birmingham, Ms Reeves pointed to global instability, a hike in defence spending and Britain’s exit from the EU as factors putting “pressure on our economy”.

She quoted data from the Office for Budget Responsibility estimating that Britain had taken a 4% long-term hit compared to if it had remained in the bloc and said Labour “acknowledged this” and was seeking closer foreign ties as a result. “The economy has been weaker and productivity has been weaker [than initial post-Brexit forecasts], despite the fact that [those forecasts suggested] the economy would be weaker because of leaving the EU,” Ms Reeves said.

“I am determined that the past doesn’t define our future and that we do achieve that economic growth and productivity with good jobs in all parts of the country,” she added.

The Chancellor admitted earlier this month that she was considering potential tax rises and spending cuts in the upcoming Budget despite previously promising not to deliver another tax-rising statement.

Ms Reeves hasn’t ruled out raising the rate of capital gains tax, levying national insurance on rental income and creating higher council tax bands, among other measures.

Questioned on the decision, she said: “This year has been particularly volatile in terms of world events, from Ukraine to the Middle East, to the higher trade tariffs that countries around the world including the UK face. We’re not immune to that, despite the fact that we’re doing trade deals with the EU, India and the US.

“Of course, that puts pressure on our economy, as does the increased defence spending to keep us safe in an uncertain world. I’ll set out all my plans based on the world as it is, not necessarily the world as I might like it to be, in the budget on November 26.”

It comes after Bank of England governor Andrew Bailey similarly warned that Brexit would have a negative impact on the UK economy for the “foreseeable future”

“For nearly a decade, I have been very careful to say that I take no position per se on Brexit, which was a decision by the people of the UK, and it is our job as public figures to implement it,” he said at the G30 40th annual bankign seminor in the US last week.

“But I quite often get asked a second question: what’s the impact on economic growth? And as a public official, I have to answer that question. The answer is that for the foreseeable future it is negative.”