An economy that was steadily recovering in the spring – indeed, the UK was briefly the fastest-growing member of the G7 – has slowed down sharply since Labour came to power.
Last week, we learned that GDP was completely flat last month, and it looks unlikely there will be any kind of an uptick when next month’s data is published. Earlier this week, we learned that inflation was stuck at 2.2pc, significantly higher than forecast, and well above the target rate, at a time when the rate of price rises is still falling in the United States and the eurozone.
As a result, the Bank of England quite rightly decided to keep interest rates on hold this month, and may well stick at 5pc for many more months to come. And then on Friday we learned that GfK’s Consumer Confidence Barometer fell sharply again last month, with people worried about the state of their personal finances.
With business confidence tumbling as well, there is little prospect of a return to growth any time soon. After all, without the optimism to spend and invest, it is impossible for any economy to expand.
Starmer and Reeves only have themselves to blame for that. They may have thought it was clever politics to talk down the economy: it gives them an excuse for tax rises that they had planned all along but didn’t want to admit were inevitable before the election.
The trouble is, the slump is coming at the worst possible time. Throughout August, the Government yet again had to borrow another £13.4bn to balance the books, £3.3bn more than the same month last year, and £2.5bn more than the Office for Budget Responsibility forecast as recently as March.