‘Worst Of All Worlds’: Fresh Blow For Rachel Reeves As Businesses Make Gloomy Forecast For 2025

Rachel Reeves has been dealt yet another blow as businesses warned the UK economy is “headed for the worst of all worlds” in 2025.

A survey by the Confederation of British Industry found firms expected to reduce both output and hiring at the start of the New Year.

They said the chancellor’s decision to hike employers’ National Insurance in the Budget in October was one of the reasons for the slump in confidence.

Meanwhile, the Office for National Statistics revealed this morning that the economy flatlined between July and September – Labour’s first three months in power – having previously said it had grown by 0.1%.

Alpesh Paleja, the CBI’s interim deputy chief economist, said: “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.

“Businesses continue to cite the impact of measures announced in the Budget – particularly the rise in employer NICs – exacerbating an already tepid demand environment.

“As we head into 2025, firms are looking to the government to boost confidence and to give them a reason to invest, whether that’s long overdue moves to reform the apprenticeship levy, supporting the health of the workforce through increased occupational health incentives or a reform of business rates.

“In the longer term, businesses will be looking to the industrial strategy to provide the stability and certainty which can unlock innovation and investment – and provide that much-needed growth for the economy which can deliver prosperity for firms and households alike.”

The CBI survey is yet more grim news for Reeves and prime minister Keir Starmer, who have pledged that Labour will have the fastest growing economy in the G7 by the time of the next election.

Lasy week the ONS said gross domestic product (GDP) actually fell by 0.1% in October, just as it did in September, raising fears that the UK could be heading for recession in 2025.

Meanwhile, inflation increased to 2.6%, and the Bank of England governor Andrew Bailey said “uncertainty” caused by the Budget meant interest rates will stay higher for longer.

Shadow business secretary Andrew Griffith said: “Since taking office, the Chancellor has made this country a hostile climate for aspiration, for investment and for growth. Rachel Reeves’s tax-raising spree and trash-talking her economic inheritance are literally killing businesses and jobs.

“If there is a recession – and based on these CBI expectations that seems increasingly likely – it will be one made in Downing Street.

“Labour needs to urgently change course before the damage they are doing becomes even greater.”

Responding to the ONS revising down economic growth between July and September, Reeves said: “The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge. But this is only fuelling our fire to deliver for working people.”

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‘They Are Shameless’: Labour Ministers Accused Of ‘Betrayal’ For Refusing To Compensate Waspi Women

Labour ministers have been accused of “betrayal” after ruling out compensation for women who lost out when the rules over when they received their state pension were changed.

Keir Starmer was among those who gave their support to the Women Against State Pension Inequality (Waspi) campaign when the party was in opposition.

Work and pensions secretary Liz Kendall told MPs on Tuesday that it would not be “a fair or proportionate use of taxpayers’ money” to pay up to £10.5 billion to those affected.

That was despite the parliamentary and health service ombudsman ruling that the women should be compensated due to mistakes made in the way the changes to their pension age were communicated to them.

Women’s state pension age was increased from 60 to 65 so it was equal with men’s between 2010 and 2018.

But the campaigners insisted they were not adequately informed about the change.

Speaking in 2022, Starmer said the Waspi women were the victims of “a real injustice”, adding: “We need to do something about it.”

Kendall herself was also pictured with a sign saying: “I will work with Waspi to identify and deliver a fair solution for all women affected.”

Stephen Flynn, the SNP’s leader at Westminster, re-posted the picture on X and said: “The Labour secretary of state is currently stating that her government will not provide any financial compensation to the Waspi women. They are shameless.”

Waspi chairwoman Angela Madden said: “The government has today made an unprecedented political choice to ignore the clear recommendations of an independent watchdog which ordered ministers urgently to compensate Waspi women nine months ago.

“This is a bizarre and totally unjustified move which will leave everyone asking what the point of an ombudsman is if ministers can simply ignore their decisions.

“It feels like a decision that would make the likes of Boris Johnson and Donald Trump blush.”

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UK Economy Shrinks For Second Month In A Row, Dealing A Blow To Rachel Reeves

The UK economy unexpectedly shrunk again in October in a huge blow for Rachel Reeves.

Figures released on Friday morning by the Office for National Statistics showed gross domestic product (GDP) fell by 0.1%, just as it had done in September.

Labour has made growing the economy its number one priority.

But the ONS data showed the construction sector shrank by 0.4% and the production sector fell by 0.6%.

Reeves said: “We are determined to deliver economic growth as higher growth means increased living standards for everyone, everywhere. This is what our plan for change is all about.

“While the figures this month are disappointing, we have put in place policies to deliver long term economic growth.

“We have put public finances back on a stable footing, capped the rate of corporation tax at the lowest level in the G7, established a £70 billion national wealth fund to drive growth in our towns and cities, launched a 10 year infrastructure strategy and are creating pension mega funds to boost investment in British businesses, infrastructure and clean energy.”

Shadow chancellor Mel Stride said: “It is no wonder businesses are sounding the alarm. This fall in growth shows the stark impact of the Chancellor’s decisions and continually talking down the economy.

“Labour were left the fastest growing economy in the G7 but because of their decisions growth is now under serious pressure. The impact will be felt by families through higher taxes, fewer jobs, higher prices and higher interest rates.”

Lib Dem Treasury spokesperson Daisy Cooper said: “This unexpected fall in GDP shows why it’s so disappointing that the Budget missed so many opportunities and made so many self-defeating decisions.

“Small businesses are the engine of our economy and drive growth. Yet this government has decided to burden them with more costs.

“If the government wants to turn these figures around then they should realise their mistake and reverse their NICs hike on small business.”

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Government Appoints Anti-Corruption Champion For The First Time Since 2022

The government has just appointed a former Labour MP to be the anti-corruption champion.

Baroness Margaret Hodge, who now sits in the Lords, will fill the position which has been vacant since June 2022.

Her predecessor, John Penrose, resigned over Boris Johnson’s role in the partygate scandal after a series of gatherings in Downing Street were found to have breached Covid lockdown rules.

Hodge “will work with parliament, the private sector and civil society to help drive delivery of the government’s priorities to clamp down on corruption and the organised criminals who benefit from it, helping to deliver safer streets and secure borders”, according to the Foreign Office.

Hodge has spent much of her career in the Commons campaigning against both domestic and international corruption.

News of her appointment comes as part of a new crackdown from foreign secretary David Lammy.

He has just announced up to £36m in support for the National Crime Agency’s international corruption unit over the next five years, and sanctions to hit the illicit gold trade.

Lammy said: “This government will make the UK a hostile environment for the corrupt and their ill-gotten gains as we put national security as a foundation of our Plan for Change and decade of national renewal.”

Hodge said: “After years of campaigning on the issue, I feel privileged and delighted to be able to work as the Government’s champion, combatting corruption and the illicit finance that flows from it, both at home and abroad.

“The time has now come to put an end to dither and delay. We must take determined and effective action and I look forward to playing my part in that work.”

Labour MP Joe Powell, chair of anti-corruption and responsible tax all party parliamentary group, said he “warmly welcomes” Hodge’s appointment today.

He added: “Oligarchs, kleptocrats, and those exploiting tax havens will sleep less easily tonight.

“This role is pivotal in the fight against corruption, and Margaret’s decades of tireless work exposing corruption and dirty money bring immense credibility to this effort.”

Neither Liz Truss nor Rishi Sunak appointed a new figure to replace Penrose after his dramatic resignation as the anti-corruption tsar more than two years ago.

In a scathing letter to Johnson, Penrose called on the then-PM to quit after the civil service’s partygate probe concluded that “senior leadership” at the top of government was to blame for the scandal.

The-then Tory MP said: “You have breached a fundamental principle of the ministerial code – a clear resigning matter.

“But your letter to your independent adviser on the ministerial code ignores this absolutely central, non-negotiable issue completely.”

He added: “As a result, I’m afraid it wouldn’t be honourable or right for me to remain as your anti-corruption champion after reaching this conclusion, nor for you to remain as prime minister either.”

Johnson resigned the following month.

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Keir Starmer Warned Labour’s Mandate For Change Is Based On A ‘Time Bomb’

Labour’s majority in parliament is a ticking “time bomb”, according to a brutal new report – and not because a threat from the right.

Keir Starmer’s party may have won by a landslide in July, taking 411 seats while the Tories languish on just 121, but new findings from Labour-linked think tank Compass claims it still offers a weak mandate for change.

After all, it was a shallow victory as Labour actually won just a third of the popular vote, and that poses a major threat further down the line.

On Thursday, pollsters at Find Out Now put Nigel Farage’s populist Reform Party in second place behind the Tories with Labour in third – just five months after voters hit the ballot box.

But, Compass’s new findings, first reported in the Guardian, have found Labour should be more concerned about their lack of voter loyalty – just two in five who backed Labour in July said they would consider themselves to be Labour supporters – than pressure from the right.

That’s because around 48% of Labour’s voters in July said they would be likely to vote Green or Lib Dem in the future, compared to 23% who said they were more likely to go to Reform or the Tories.

Compass’s report Thin Ice claimed: “They won [in Red Wall seats] because they were not the Tories, because Tory voters stayed at home and because Reform split the regressive vote.

“The 2024 general election was a one-off event in which unprecedented Tory ineptitude met almost unparalleled Labour discipline, but without any deep expression of what, if any, change Labour was offering.”

The pollsters said: “The timidity of this strategy, resting on ‘not being the Tories’, is a time bomb.”

Compass’s director Neal Lawson told the Guardian Starmer should look to base a coalition on the progressive majority to bolster support.

Otherwise, he warned, “if Labour fails to deliver in government, its huge but fragile majority will crumble, sending us on a bullet train to the populist right.”

The report comes after a tumultuous first few months in office for Labour, including backlash to cost-cutting policies like changing winter fuel payments for pensions.

Starmer attempted to “relaunch” his government with six new missions last week.

He wanted to turn the focus onto pursuing clean energy, building more homes, recruiting more police officers, putting a greater emphasis on early years education, introducing higher living standards and reducing NHS waiting lists.

But, it looks like it will be a steep hill for Starmer to climb to get back on top, seeing as his net approval ratings are now on -29, according to pollsters at Ipsos.

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Has Keir Starmer’s ‘Plan For Change’ Sown The Seeds For His Own Downfall?

It is just six months since Keir Starmer told HuffPost UK that he wanted politics “to tread more lightly on people’s lives”.

After years of constitutional referendums, scandals, rows and a seemingly never-ending parade of Tory prime ministers, the then opposition leader believed that the government should quietly get on with the job and leave voters in peace.

It is becoming increasingly difficult to reconcile that reasonable aim with the reality of Starmer’s first five months in power.

Since July, the public have witnessed a blizzard of policy announcements, the biggest tax-raising Budget in more than 30 years, high-profile sackings, a No.10 reorganisation and a cabinet minister forced to resign in disgrace.

This hyperactivity culminated in the prime minister unveiling his “plan for change” on Thursday, setting out the six key policies he wants voters to judge Labour on between now and the next election.

Labour will, he said, make people better off, build 1.5 million homes, get more children ready to start school, bring down hospital waits, recruit thousands more neighbourhood police and de-carbonise the electricity grid by 2030.

These promises are definitely not to be confused with Labour’s five missions for government, which Starmer launched nearly two years ago, or indeed the six pledges he made during the general election campaign.

While Downing Street officials were at pains to deny it, it looked and felt like a much-needed reset for a government which has been on the back foot almost from the day it was elected.

Keiran Pedley, director of politics at pollsters Ipsos, said: “It’s not surprising that they’re trying to reassert themselves because, as we’ve seen over the summer and more recently, Starmer’s personal ratings have fallen.

“In July his approval ratings were still net positive, but now he’s on minus 29. We also had polling which showed 53% of voters are disappointed with how Labour have done so far.”

Pedley blamed “a perception that they’ve broken their promises”, ongoing concerns about the state of the economy and unhappiness with policies like removing winter fuel payments from 10 million pensioners for the precipitous fall in the government’s popularity.

“There’s definitely a feeling that it hasn’t started well for Labour, which is reflected in the polling,” he said.

“They’re trying to take charge of the agenda, but the risk is that people don’t actually pay that much attention.

“People voted Labour for a change and to fix the economy and that ultimately is what they will be judged by.”

Pedley also warned that Starmer’s avalanche of promises could end up being counter-productive.

“The problem is you say too much about what your priorities are to the point where it all gets a bit lost,” he said.

“A few weeks ago the PM said illegal migration was one of his top two priorities, but then it wasn’t even one of the six milestones. If you’re going to tell the public ‘judge me on this thing’ you need to be consistent about what those things are.

“You can have six milestones, five missions and a partridge in a pear tree, but the fundamental things they need to do is fix the NHS and turn the economy around.”

The main drivers behind the plan for change have been Morgan McSweeney, the PM’s chief of staff, and Pat McFadden, the chancellor of the Duchy of Lancaster.

Those close to the process insist it has been in the pipeline since shortly after the election, rather than a response to the government’s ongoing woes.

“I get why people are saying it’s a relaunch or a reset, and sometimes that is a valid criticism, but on this occasion it genuinely isn’t,” said one senior No.10 source.

Chris Hopkins, political research director at Savanta, said Starmer’s speech may actually do him some good with the electorate.

He told HuffPost UK: “For regular political watchers, having another technical list to keep track of isn’t ideal, but the public won’t likely care about much of that anyway.

“Labour promised change, and the UK public are utterly clear that means improvement to living standards and public services.

“If Starmer got an opportunity to communicate that to voters, then it will have been seen as a good day in No.10.”

Senior Labour figures are less sympathetic, however.

One said: “Since being PM, Keir’s had four big moments – outside No.10 on day one, the King’s Speech, party conference and now the plan for change. And people still have no idea what he stands for or what the government wants to achieve.”

Others are scathing about the No.10 operation, which only recently underwent a huge shake-up following the sacking of Sue Gray, McSweeney’s predecessor as chief of staff.

A party insider described the prime minister’s speech as “pretty incoherent”, while another said: “I’m afraid Morgan can’t blame Sue forever.”

Even new Labour MPs have started criticising Starmer’s performance, with one asking a colleague: “How do we put him out of our misery?”

But the PM’s supporters insist he and the government are on the right track, and that Labour will eventually reap the reward for decisions being taken now.

One ally told HuffPost UK: “The original five missions were about the long-term direction of a Labour government, but there’s now a real keenness to make them a bit more tangible so that people can see as the parliament goes on what it is we’re trying to achieve. It’s a way of holding ourselves to account.

“Look at the housebuilding pledge, for example. That’s really challenging because over the last couple of years the number of new homes being built has fallen off a cliff.

“But we want to send out a really strong signal to the public and to the civil service that these are our aims.

“We’re hoping that by setting these targets very high it will drive us on and, by the time of the next election, people will feel the difference a Labour government can make.

“If you push yourself hard you can achieve more. And what’s government for if it isn’t that?”

On the same day as the PM’s speech, a shock poll put Reform UK ahead of Labour for the first time.

It remains to be seen whether that was an outlier or a sign of things to come. Starmer had better hope his new targets have the desired effect on those around him, or the next four years will be even more difficult than the last five months.

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Keir Starmer Pledges Labour Will Recruit 13,000 More ‘Bobbies On The Beat’ In Crime Crackdown

Labour will recruit an extra 13,000 neighbourhood police to tackle anti-social behaviour between now and the general election, Keir Starmer will pledge on Thursday.

The prime minister will unveil the plan in a major speech as he attempts to relaunch his government after a turbulent first five months in office.

Every community will have a “named, contactable officer” tasked with patrolling their neighbourhood and who cannot be used to plug policing shortages in other areas, the PM will say.

The new “neighbourhood policing guarantee” is part of a “plan for change” setting out how Labour intends to achieve its five missions for government and will include separate pledges on clearing hospital backlogs, improving education, tackling the cost of living and bringing down energy bills.

But No.10 has denied that the PM has been forced into the reset by the controversies and scandals which have dogged the government since Labour’s landslide election victory in July.

They have included a row over Labour donor Lord Alli buying clothes and glasses for the prime minister, the sacking of Starmer’s chief of staff Sue Gray, and last week’s resignation by transport secretary Louise Haigh.

In his speech, Starmer will say: “The neighbourhood policing guarantee will deliver 13,000 extra neighbourhood police, visible on your streets, cracking down on anti-social behaviour.

“A named, contactable officer in every community. A relief to millions of people scared to walk their streets they call home.”

The extra numbers will be made up of police, community support officers and special constables.

Home secretary Yvette Cooper said the move was “about rebuilding the vital connection between the public and the police”.

“This marks a return to the founding principles of British policing – where officers are part of the communities they serve,” she said.

“Through this visible, responsive police presence in every neighbourhood, we will restore the trust and partnership that lies at the heart of keeping our communities safe.”

Starmer is also expected to address public concerns about high immigration in his speech, as well as announce a major programme of public sector reform.

He will say: “My government was elected to deliver change, and today marks the next step. People are tired of being promised the world, but short-term sticking plaster politics letting them down.

“Hardworking Brits are going out grafting every day but are getting short shrift from a politics that should serve them.

“They reasonably want a stable economy, their country to be safe, their borders secure, more cash in their pocket, safer streets in their town, opportunities for their children, secure British energy in their home, and an NHS that is there when they need it. My mission-led government will deliver.”

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Cabinet Minister Effortlessly Bats Back Tory Frontbencher’s Budget Complaints With 1 Key Answer

A Labour cabinet minister skewered a Tory MP this morning when he tried to lay into the party’s Budget by reminding him of his own role in the last government.

Rachel Reeves announced she was hiking National Insurance contributions for employers in last month’s Budget as part of efforts to fill the £22bn black hole Labour says the Tories left behind in the public finances.

Shadow Commons leader Jesse Norman tried to slam Labour’s decisions today, noting there had been “no compensation whatsoever has been offered for this tax raid”.

He then bizarrely claimed the “desolate, chaotic landscape with wreckage strewn everywhere” of the film franchise Mad Max is the “perfect metaphor for the government’s recent Budget”.

But the government’s Commons leader, Lucy Powell, did not accept his criticisms.

She said: “Mr Speaker I know that the shadow leader is fairly new to opposition, like most of his colleagues, but I might gently say to him that the idea of opposition is to oppose the government not his own record and his own previous government.”

Norman held several ministerial roles in the last government, including in the Treasury under both Theresa May and Boris Johnson.

Powell continued: “When I checked the records Mr Speaker, I did notice that when his government raised NICs [in 2021], not just on businesses, but on workers as well, he was actually the financial secretary to the Treasury.

“When he defended the measure at this very despatch box, Mr Speaker, and I quote, he said it was a ‘profoundly Conservative thing to do’.

“So, he seemed to be for it then and against it now. I’m not quite sure what his position is, I’m quite confused about that.”

Labour have been reminding any Tories who held a ministerial role in the last government of their past whenever they have tried to land a blow on their new policies.

Energy secretary Ed Miliband mocked Tory frontbencher Claire Coutinho on Tuesday by telling her “the job of opposition is to oppose the government, not yourself” after she tried to criticise Labour’s carbon emissions targets.

And earlier this month, deputy PM Angela Rayner dismantled Alex Burghart when he tried to criticise the government after inflation crept up from 1.7% to 2.3% in October.

She replied: “Many people might not know that the honourable member was the minister for growth when under Liz Truss, inflation was 11.1% and growth flatlined. So we’re doing much better than he did!”

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Drink Spiking Will Be Made A Criminal Offence Under Labour Bid To Protect Women And Girls

Drink spiking is to be made a criminal offence under Labour plans to halve violence against women and girls.

Keir Starmer will confirm the move as part of efforts to “reclaim our streets” from criminals.

The prime minister will meet with police chiefs, hospitality industry executives and transport bosses on Monday to discuss how best to crack down on the practice of putting drugs in drinks.

Thousands of staff working in the nighttime economy will be trained up on how to spot it happening.

A pilot scheme will be launched in December and then rolled out to 10,000 bars across the country by spring next year.

Starmer said: “My government was elected on a pledge to take back our streets, and we will never achieve this if women and girls do not feel safe at night.

“Today, I will bring together police chiefs, heads of industry and transport bosses to demand coordinated action to stop women being targeted, whether they are out with friends or simply travelling home.

“Cracking down on spiking is central to that mission.

“We know it can be incredibly difficult for victims to come forward to report this awful crime, and these cases can be very hard to prosecute. We must do more to bring the vile perpetrators who carry out this cowardly act, usually against young women and often to commit a sexual offence, to justice.

“That is why I made a promise that, if elected, I would make spiking a new criminal offence. Today, I am proud to have come good on that pledge.”

Home secretary Yvette Cooper said: “Spiking is a disturbing and serious crime which can have a damaging and long-lasting impact on victims.

“People shouldn’t have to worry about the safety of their drinks on a night out. These changes are about giving victims greater confidence to come forward, and ensuring that there is a robust response from the police whenever this appalling crimes take place”.

Kate Nicholls, chief executive of UK Hospitality, said: “Our pubs, bars, clubs and restaurants are where Brits go to enjoy themselves and our priority is to ensure everyone can do that safely.

“I’m pleased that we’re able to support the Home Office in its plans to roll out a nationwide training programme as part of these efforts, to help ensure all staff know how to prevent spiking and have the skills to act if they suspect someone has been spiked.”

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Exclusive: Voters’ Trust In Labour To Run The Economy Plummets Amid Budget Backlash

Labour’s lead over the Tories on which party is best placed to run the economy has plummeted since the election, HuffPost UK can reveal.

Polling by Savanta shows that just 38% of the public now back Labour over the Conservatives, down from 50% in July.

At the same time, the proportion of the public who prefer the Tories has gone up from 28% to 33%.

That means Labour’s lead has fallen from 22 points to five points in just four months.

The poll also found that Labour’s lead over the Tories on dealing with the cost of living has gone from 28 points to nine points over the same period, while the party’s lead on taxation has fallen from 16 points to just two points.

The findings are another blow for chancellor Rachel Reeves, who has come under fire over a series of controversial decisions she has taken since the election.

They include taking the winter fuel payment off 10 million pensioners, imposing inheritance tax on farms worth more than £1 million and hiking the rate of National Insurance paid by employers.

Reeves’ own personal approval ratings have also fallen from plus seven at the end of July to minus 18, the Savanta poll found.

Chris Hopkins, the pollsters’ political research director, said Labour’s advantage on the economy had “all but faded away since the election”.

“The Conservatives haven’t made up that much ground on the economy, taxation and cost of living, but many voters no longer think that Labour are the most trusted on these issues,” he said.

“Reeves would no doubt argue that she is being forced to take difficult decisions because of the inheritance left to her by her Conservative predecessors. While the public do have sympathy for that point of view, I think it’s fair to say they were expecting more from Labour.”

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