Under Rachel Reeves, the news just gets worse and worse. Unemployment has climbed from 4.1% to 5.1% on her watch, as her taxes destroy jobs. The economy failed to grow in five of the eight months to November, with trend growth barely above zero. When GDP rose by 0.3% in November, Reeves desperately grabbed the credit. It's not much to boast about.
Today we got another blow. The great hope for 2026 was that inflation would finally drop back to the Bank of England’s 2% target. Beat inflation, and living standards might at last start to recover. That’s what households are desperate for. Keir Starmer has identified the cost-of-living crisis as the main driver of Labour’s collapsing popularity. That's not going to improve after today's inflation bombshell.
When people feel poorer month after month, they look for someone to blame. Few things anger voters more than spiralling prices. And today they’re rising again.
After falling to 3.2% in November, inflation jumped back to 3.4% in December. That will have gone down like a lead balloon in the Treasury. Reeves wants inflation falling fast, because it would encourage the Bank of England to cut interest rates, easing pressure on borrowers and reviving growth.
Instead, December’s figure has effectively killed off hopes of a February rate cut. Higher mortgage bills and borrowing costs will linger. Reeves repeatedly takes the credit for interest rate cuts but we've have had a lot more if it wasn't for her endless policy errors.
Eurozone inflation fell to just 1.9% in December. The Chancellor's mistakes are a key reason why ours is so much higher, and rising.
Reeves's first Budget in October 2024 was inflationary, most notably her decision to slap a £25billion jobs tax on employers through higher National Insurance. Businesses can’t just swallow that. They pass it on to customers.
Food prices rose a meaty 4.5% in the year to December. While ingredients are more expensive, Reeves isn’t helping. She hit manufacturers with a new packaging tax costing £1.4billion a year, alongside an estimated £410million from higher employer’s NI. Ultimately, we pay.
The big supermarkets like Tesco, which is the UK's biggest private sector employer, also pay that jobs tax. They hike prices. We pay them. What did Reeves expect? Companies don’t magic money from thin air.
She's also borrowed and taxed more to fund higher public spending, which is inflationary. Higher alcohol and tobacco duties have driven up prices too. Again, we pay.
Ed Miliband deserves a share of the blame. His net zero push is driving up household energy bills, and therefore inflation. No prizes for guessing who pays. We do.
Everyone wants the cost-of-living crisis to ease. Thanks to Rachel Reeves, with some help from Ed Miliband, it looks set to drag on and on. And we will pay and pay.
