The UK may already be in recession as Rachel Reeves’s record tax raid brings “extended agony” for the economy, an investment bank has warned. The Telegraph has more.
National GDP may be shrinking after a swathe of Labour policies that have “notably damaged” economic growth, analysts at Shore Capital said.
The warning came as separate figures showed consumer confidence has plunged to a 12-month low as households worry that they will lose their jobs in the wake of the Budget.
Clive Black, of Shore Capital, said the UK may have entered 2025 in a “technical recession”, which is classed as two quarters of declining GDP.
He added: “The Prime Minister and the Chancellor of the Exchequer have notably damaged the momentum of the UK economy since they came to power through their flawed messaging and policy announcements.
“The relief that the rotten Tories ‘went’ in 2024 has been replaced by a sense of extended agony, which is especially draining for participants in the UK economy.”
Since Labour’s election victory in July last year, Britain’s economy has flatlined after initially recording the strongest economic growth in the G7 during the first half of 2024.
Although monthly GDP rose marginally by 0.1% in November, disappointing retail sales in December has pushed analysts to warn of a “growing risk” that the economy contracted at the end of last year.
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