OPINION
Chancellor Rachel Reeves blamed Donald Trump for the economy contracting (Image: Getty)
Politics has always been a blame game but Rachel Reeves deserves a red card for pointing the finger at for her economic woes. New figures show the economy shrank at the start of the year against the expectations of economists.
Whether economists are actually any good at having expectations is another story. “The only function of economic forecasting is to make astrology look respectable,” one member of the esteemed profession, the late Ezra Solomon, joked.
But the lack of growth is devastating for the country and another black mark on the Chancellor’s already dismal record. So she did what comes naturally to failing politicians – try to pin it on someone else.
“The world has changed and across the globe we are feeling the consequences,” Reeves said. Pressed on whether she was talking about Trump, the Chancellor added: “I believe, this Government believes, in free and open trade, and will continue to make that point.”
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The Donald is an easy target – hated on the left, confusing for the right and in another country.
But while his tariff tombola is harming the global economy with its unpredictability, the impact of that is yet to filter through to growth figures.
The Office for National Statistics said the contraction in January was driven by a notable slowdown in manufacturing, with oil and gas extraction and construction also having weak months.
Analysts were particularly gloomy in their responses, with one saying the figures “will probably disappoint even the pessimists”.
The CBI said it showed the economy remains “fragile” while the Institute of Directors said it is “quite weak and therefore quite vulnerable”.
After Reeves’s suggestion that the US was the cause, rather than her bombshell budget, Downing Street was forced to say explicitly that the troubles are not down to Trump.
Asked if the US president’s trade policy was to blame for a contraction in the economy, a No 10 spokesman said: “No.”
He added: “We know the cost-of-living crisis is not over, and this Government is determined to make people better off, and that’s why economic growth is the Prime Minister’s number one priority.
“Growth is what funds our public services, it is what enables investments in our hospitals and schools and, of course most importantly, raises living standards for everyone, everywhere.”
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It’s not the first time that Reeves has shifted the blame for her own economic ineptitude.
The so-called £22 billion blackhole the Chancellor supposedly uncovered a few weeks into the job when she opened books (even though the figures were all publicly available) set off a chain of events that she has never recovered from.
Aside from the anger over the decision to remove winter fuel payments from pensioners to help fill the gap, the constant talking down of the economy led to a loss of business confidence.
When Reeves said that despite the apparently dire situation, she would not hold a budget for more than three months, business, finance and industry took note and slowed down.
As a result there was zero growth in the first three months of the Labour government.
That time around it was the ’ fault, with the Chancellor blaming the “neglect” of the previous government.
No one has forgotten the turbulence of the Tory years in the wake of the pandemic.
But by the time the election was called had managed to stabilise the economy and it was the fastest-growing among the G7 leading nations.
There was little growth in the last quarter of 2024, which includes the months after the disastrous budget that hiked up taxes by £40 billion.
Farmers are in distress about the cruel death levies that will force families to sell up.
The impact of the national insurance hikes are only just about to be felt in full when they come into force next month, but employers have already stopped hiring.
Shadow chancellor Mel Stride said the latest growth figures show the government’s decision to consistently talk Britain down and raise taxes to record highs showed Labour is a “growth killer”.
In just over a week, Reeves will deliver a spring statement, which is supposed to be a simple economic update rather than a tax raising event.
But spending cuts are being lined up, which will be particularly focused on welfare reforms.
There is absolutely no sign of where the growth that Labour insists is its top priority is going to come from.
Who will Reeves blame next time? She is running out of options, but more importantly the country is running out of patience.