Hard-working Brits issued dire pay warning by bosses as Rachel Reeves puts ‘handbrake on economy’
WORKERS face puny pay rises as bosses shut their chequebooks following Labour’s Budget, economists warned today amid sluggish growth figures.
Chancellor Rachel Reeves was accused of putting a “handbrake on the economy” by hiking taxes on employers.
GDP crept up 0.1 per cent in November, marking an improvement on the 0.1 per cent contraction in October.
But Ms Reeves will be hoping for much higher upticks to succeed in her flagship mission of driving the sort of growth needed to offset any more tax rises or borrowing.
Following this morning’s figures, the Confederation of British Industry warned firms were reacting to the Budget by keeping money tight.
Economist Ben Jones said: “In the wake of the Autumn Budget a mood of caution seems to have settled over UK businesses.
“Many firms are entering 2025 with a focus on reducing operational expenditure, which is likely to weigh on pay, hiring and investment in the months ahead.”
Ms Reeves – already under pressure over market turmoil – remained defiant this morning despite the spluttering growth figures.
She said: “I am determined to go further and faster to kickstart economic growth, which is the number one priority in our Plan for Change.
“That means generating investment, driving reform and a relentless commitment to root out waste in public spending, and today I will be pressing regulators on what more they can do to deliver growth.”
The Chancellor’s meeting today to urge watchdogs to cut red tape comes as she also eyes big savings in Britain’s ballooning welfare bill.
A Spring Statement on March 26 could also see departmental budgets squeezed even further.
Tory Shadow Chancellor Mel Stride: “Labour inherited the fastest growing economy in the G7, now we are stagnating. They are killing investment and jobs.
“This is the third month in a row of disappointing growth figures. The Chancellor seems content with burying her head in the sand and blaming the previous government, but this is a crisis made in Downing Street. We need an urgent change of course.”
Lib Dem Daisy Cooper added: “The Chancellor has put the handbrake on the economy with her misguided jobs tax and the consequence is this pitiful rate of growth.”