Rachel Reeves has “completely lost control” of the UK economy and is steering the country towards a full-blown financial crash, according to a stark warning from The Telegraph’s financial expert, Matthew Lynn.
In a scathing column published this week, Lynn argues that Labour’s Chancellor has squandered the strong economic position she inherited, with spiralling borrowing, soaring public sector costs, and faltering tax revenues pushing Britain into dangerous territory.
“The blunt truth is this,” he writes. “Reeves has completely lost control.”
According to Lynn, the UK borrowed a staggering £151.9 billion over the past 12 months – £20 billion more than the previous year and significantly above the Office for Budget Responsibility’s forecasts. March alone added £16.4 billion to the national debt, the third-highest figure for that month since records began.
He claims the recent economic instability triggered by Donald Trump’s tariffs had masked deeper, structural problems in the UK economy – problems which are now being exposed.
“The borrowing figures are getting relentlessly worse month-by-month,” Lynn writes.
He blames a series of “huge pay settlements” across the public sector for driving up wage bills, along with what he describes as reckless departmental spending – particularly from Ed Miliband’s green energy programmes. Local authorities, he adds, are also feeling the strain, burdened with the cost of rising numbers of asylum seekers.
With the economy now stagnating, Lynn notes that corporation tax and VAT revenues are falling short of expectations as businesses struggle and households tighten their belts.
“Even worse, these are only the ‘provisional’ figures,” he warns. “When the final numbers are tallied up, they will be far worse.”
The situation, he predicts, will deteriorate further in the coming months. A sharp rise in National Insurance costs is expected to hit public sector employers hard, raising the cost of employing 6.1 million government workers. Meanwhile, firms are already making cuts – with Morrisons announcing the closure of 52 cafés and 17 convenience stores as part of wider cost-saving measures.
Lynn also points to new data from the Office for National Statistics showing that the UK borrowed 5.3% of GDP last year – a level he calls “unprecedented” in the absence of any crisis.
“The real figure may well be 6% already, and it will certainly hit that level before the autumn,” he predicts.
While Reeves has unveiled plans for welfare cuts and budget “savings”, Lynn argues these are unlikely to deliver real results.
“So far Reeves has only announced welfare cuts that will prove mostly fictitious, and ‘savings’ that won’t be delivered,” he writes.
With speculation mounting about economic mismanagement and an increasingly volatile fiscal outlook, Matthew Lynn’s column paints a grim picture – and raises serious questions about the Chancellor’s grip on the nation’s finances.
Worth reading in full in the Telegraph here.
