Analysis: Rachel Reeves Was In Punchy Form – But War In The Middle East Could Ruin Her Economic Plans

Posted on 03/03/2026 by Boris Clair

Rachel Reeves looked as though she was enjoying herself as she took aim at Labour’s political opponents while delivering her Spring Statement.

With no new policies to announce, the chancellor decided to use a decent chunk of her time at the despatch box attacking Reform UK, the Conservatives and the Green Party.

“The Tories left our country, our people and our allies exposed: They had no plan and no intention to fund their pledge to spend 2.5% of GDP on defence,” she said.

“Reform would go one step further by ditching our allies and siding with Russia, while the Green Party wants to take us out of Nato and jeopardise our alliances.

“So let me be clear: It is Labour and only Labour that can provide social justice, national security and fiscal responsibility.”

In another section, she dismissed Reform as “a Tory tribute act” following the defections of the likes of Robert Jenrick and Suella Braverman.

“They may have changed the colour of their rosettes, but the British people won’t forget that they are the exact same people that wrecked our public services and wrecked our public finances in the last Tory government,” she said.

“The same people, the same policies and the same disastrous outcomes for working people.”

But behind the political knockabout, the chancellor must know that the fate of the UK economy – and perhaps even the Labour government – depends on the outcome of the latest war in the Middle East.

The Office for Budget Responsibility (OBR) may have forecast that inflation will come down, but that was before the US and Israel’s bombing of Iran sparked an energy crisis which has seen gas prices soar in the past 48 hours.

If that ends up feeding through into people’s bills, Labour will pay a huge political price.

The same goes for the OBR’s forecasts on economic growth, as well as government borrowing and national debt.

A prolonged conflict in the Middle East, and the accompanying economic turmoil which would ensue, would blow another huge hole in the already-stretched public finances.

With unemployment set to be higher than expected this year and the tax burden set to hit another post-war high, yet more economic uncertainty is the last thing the chancellor needs.

“This government has the right economic plan for our country,” Reeves insisted.

“A plan that is even more important in a world that in the last few days has become yet more uncertain.

“With the unfolding conflict in Iran and the Middle East, it is incumbent on me and on this government to chart a course through that uncertainty, to secure our economy against shocks and protect families from the turbulence that we see beyond our borders.”

She may have talked a good game, but the chancellor knows that events thousands of miles away have the potential to destroy her economic plans and plunge the government into political crisis they may not recover from.

Rachel Reeves Accused Of Misleading Voters Over State Of UK Economy Ahead Of Budget

Posted on 28/11/2025 by Boris Clair

Rachel Reeves has been accused of misleading voters by claiming there was a huge hole in the government’s finances which did not actually exist.

Treasury officials briefed that the chancellor needed to raise around £20 billion in the Budget to balance the nation’s books.

Reeves herself even held a highly-unusual pre-Budget press conference in Downing Street on November 9 in which she refused to rule out putting up income tax – a move which would have broken a key Labour manifesto pledge.

Later that week, she told Radio 5Live that deep cuts in public spending would be needed if she did not increase income tax rates.

But days later the Financial Times revealed that Reeves had decided not to put up income tax rise after all.

Treasury sources said that was because the Office for Budget Responsibility’s (OBR) forecasts showed the economy was in better shape than previously thought.

But figures released by the OBR on Friday showed that fully two weeks before that U-turn, their assessment was that there was no black hole at all.

Reeves hiked taxes by £26 billion in the Budget as she massively increased public spending, including on welfare.

Tory leader Kemi Badenoch said the chancellor had “lied to the public” and should be sacked.

Posting on X, she said: “Her Budget wasn’t about stability. It was about politics: bribing Labour MPs to save her own skin. Shameful.”

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Yet more evidence, as if we needed it, that the Chancellor must be sacked. For months Reeves has lied to the public to justify record tax hikes to pay for more welfare.

Her Budget wasn’t about stability. It was about politics: bribing Labour MPs to save her own skin. Shameful. https://t.co/fR1dNgeUKp

— Kemi Badenoch (@KemiBadenoch) November 28, 2025

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Yet more evidence, as if we needed it, that the Chancellor must be sacked. For months Reeves has lied to the public to justify record tax hikes to pay for more welfare.

Her Budget wasn’t about stability. It was about politics: bribing Labour MPs to save her own skin. Shameful. https://t.co/fR1dNgeUKp

— Kemi Badenoch (@KemiBadenoch) November 28, 2025

Treasury sources denied Reeves had misled the public, and said the OBR calculations had not taken account of things like the government’s decision to reinstate winter fuel payments for pensioners, and the chancellor’s decision to give herself more fiscal headroom, or spare cash.

“I don’t think anyone can suggest she was preparing the country for something that didn’t end up happening,” said one Reeves ally.

A Treasury spokesperson said: “We are not going to get into the OBR’s processes or speculate on how that relates to the internal decision‑making in the build‑up to a Budget, but the chancellor made her choices to cut the cost of living, cut hospital waiting lists and double headroom to cut the cost of our debt.

“We take Budget security extremely seriously and believe it’s important to preserve a private space for Treasury–OBR policy and forecast discussions, so we welcome the OBR’s confirmation that this will not become usual practice.”

However, social media users reacted angrily to the OBR’s figures.

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So…the “blackhole” never existed after all.

There’s spin and then there’s flat-out deception.

Could be a long weekend in No11… https://t.co/5gQdtEpatz

— Tom Swarbrick (@TomSwarbrick1) November 28, 2025

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So…the “blackhole” never existed after all.

There’s spin and then there’s flat-out deception.

Could be a long weekend in No11… https://t.co/5gQdtEpatz

— Tom Swarbrick (@TomSwarbrick1) November 28, 2025

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The OBR’s jaw-dropping revelation this lunchtime puts Reeves on course to go down as the most dishonest Chancellor we’ve ever had

Snap analysis – https://t.co/doMJ0RpKOt

— Calgie (@christiancalgie) November 28, 2025

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The OBR’s jaw-dropping revelation this lunchtime puts Reeves on course to go down as the most dishonest Chancellor we’ve ever had

Snap analysis – https://t.co/doMJ0RpKOt

— Calgie (@christiancalgie) November 28, 2025

Rachel Reeves will deliver her make-or-break second Budget on Wednesday, with voters braced for a wave of tax increases as she tries to fill a black hole of between £20 and £30 billion in the public finances.

The chancellor is under huge pressure to deliver a financial statement that appeals to voters while not spooking the international money markets.

It is not an overstatement to suggest that her job – and that of her next door neighbour Keir Starmer – could rest on whether or not the Budget is a success.

The build-up to the big day has been far from plain sailing for Reeves, who dramatically U-turned on plans to raise billions by breaking Labour’s manifesto pledge not to put up income tax.

That has left her exploring a “smorgasbord” of options to raise the money she needs to balance the books.

Although nothing will be officially confirmed until Reeves delivers her statement at around 12.30pm on Wednesday, here is what we already will be in it.

Rail fare freeze

The government announced over the weekend that rail fares in England will be frozen next year – the first time in 30 years.

The freeze will apply to regulated fares – including season tickets and off-peak returns – until March 2027.

It only applies to services run by England-based train operating companies, but the government said it intends to “directly limit inflation” and hold down a “major component of everyday costs”.

Prescriptions kept to under £10

Patients will be able to save around £12 million next year as the chancellor intends to extend the freeze on NHS prescription charges.

The cost of a single prescription will remain at £9.90.

Minimum wage reforms

Labour will regularly name and shame employers who breach the national minimum wage rules.

A Treasury source said this is meant to protect vulnerable workers and prevent companies from hiding by hitting them with fines.

A boost for children’s playgrounds

More than 200 play areas are meant to be benefitting from this injection of £18m of cash.

It comes after the government’s Pride in Place programme has offered £5 billion for communities to regenerate public spaces.

Seizure of illegal vapes

Budget Force and HM Revenue & Customs will now be able to seize illegal vapes and issue £10,000 fines.

If business owners break the rules, they could face prison time.

From October 2026, all vapes will have to have a digital duty stamp with a QR code so they can be scanned to check which are fake.

Shops will have a six-month grace period to sell any unstamped stock.

Benefit fraud crackdown

Reeves claims she will be able to rack up £1.2 billion of savings as officials continue cracking down on incorrect Universal Credit payments up until 2031.

There is reportedly a team of 6,000 at the Department for Work and Pensions who have reviewed more than a million cases and already saved the taxpayer £1 billion.

Boost for pensioners

The chancellor is set to announce that 13 million pensioners will benefit from an above inflation rise to the State Pension next April, equating to more than £550 a year more.

It’s part of the government’s commitment to the triple lock, which means increasing the State Pension every year according to the highest of one of three figures: inflation, average earnings growth or 2.5%.

From next April, the rate of the full new State Pension will increase to just over £240.

Boost for secondary school libraries

Every secondary school in England is expected to benefit from a £5 million boost for school libraries – which works to around £1,400 per school.

Every child, regardless of their background, would then have access to a wide range of books.

350 new planners

Reeves is expected to put aside an extra £48 million to recruit 350 new planners as part of the government’s plan to “get Britain building”.

The chancellor would reportedly look at hiking up the number of graduate planners and launching a Planning Careers Hub.

Guaranteed student loan support for care leavers

Reeves will promise care leavers up to £13,500 of student loan support – the full amount – to level the playing field.

Only 14% of young people who leave care go to university at the moment, compared to 50% of the wider population. They are more likely to drop out due to financial barriers, too.

The current system limits maximum student support to those on the lowest incomes, under 25, who do not have a partner,

Mansion tax

The Times reported Reeves intends to use the current council tax system as the basis for a new property tax for large properties by revaluing the most valuable homes across council tax bands F, G and H.

Supposedly the government will allow homeowners to defer paying the tax until they move house or die.

This will hit 100,000 properties and supposedly raise £400-450 million from the levy.

Two-child cap

Labour is widely expected to lift the two-child benefit cap, which prevents family from claiming more of universal credit on any children after their second.

This is likely to cost £3 billion. The government did choose to keep the Tory policy in place during their first Budget last year, but subsequent backlash from the left-wing of Labour has likely played in encouraging Reeves to drop the cap.

Threshold freeze

Reeves is widely expected to freeze the income thresholds at which income tax rates start to apply in a move which would raise around £8 billion for the Treasury.

It’s referred to as a “stealth tax” because workers end up being dragged into a higher tax bracket when they get a pay rise in line with inflation.