Chancellor Rachel Reeves inherited a bad economic hand from the Tories – but in her darkest moments, she has seen a string of fortunate breaks allowing her breathing space
Nobody seriously disputes that Rachel Reeves inherited a bad economic hand from the Tories, but might she be a lucky Chancellor?
The question is heard in Westminster because, at her darkest moments, she has had a string of fortunate breaks. Soaring borrowing costs, driven largely from the US, were wreaking havoc with her spending numbers when inflation unexpectedly eased 0.1%.
The economy grew by the same smidgen and then the IMF predicted that the UK would be the fastest-growing major European economy over the next two years. None of those shifts were seismic and may be reversed or the prediction proved optimistic, not least because Britain might do relatively better only because our neighbours do worse.
But imagine if the inflation rate had nudged up, not down, the economy had flatlined or shrank a tad and the IMF soothsayers were gloomy. Hell would have engulfed the Chancellor, leaving Reeves gasping for breath rather than enjoying a bit of breathing space.
She jets off to Davos in Switzerland for the World Economic Forum in pursuit of Gulf gold to invest in Britain without the daft Tories stupidly calling for her to stay in Britain, which they did ahead of her trip to China. Nobody underestimates the challenges ahead, not least those created from April by the hikes in National Insurance for employers to fill a Tory blackhole and fund an NHS revival.
A third interest rate cut since the election, plus potentially another two, and wage increases continuing to outstrip price rises will improve living standards. Speculation about Keir Starmer axing Reeves appear baseless, at the moment anyway, when their fates are linked.
Economics is called the dismal science, but a poor hand and low expectations could, just could, with a dose of luck enable Reeves to defy her critics. Funny old business, politics.