Bank of England governor Andrew Bailey has become the latest senior figure to undermine Rachel Reeves’ claims about the true state of the British economy.
Speaking in an interview this weekend, the central banking chief said that their decision this week to cut interest rates for the first time in four years was objectively “good news” and a “reason to be optimistic”.
His words further stymie the Labour Government’s attempt to recast the Tories’ economic legacy, and begin preparing excuses for tax rises in the Autumn Budget.
Mr Bailey was asked directly about the Chancellor’s claims, and while he refused to “get drawn into politics”, he added: “I do think it’s good news – and a reason to be optimistic – that inflation is back at the target’ of 2% after peaking at 11%”.
“We talk to people and businesses up and down the country every day. For quite some time, the cost of living for households and the costs of production for businesses have been the number one concern. Inflation has fallen a lot over the past 18 months.
“So I hope those concerns will begin to fade. It’s our job to make sure they do.”
Despite Ms Reeves, and her sums, being torn apart since she emerged on Monday with the furious allegations about her inheritance, it’s been reported Labour is planning on continuing to press the claim about the Tories’ economic management.
However a new YouGov poll said that while voters narrowly prefer the idea of tax rises to spending cuts to fill any shortfalls in the public finances, more voters say any tax rises would be Labour’s choice and not the blame of the Conservative Party.
Today Shadow Chancellor Jeremy Hunt said he “would have given my right arm to have had the inheritance” he bequeathed to Labour.
Mr Hunt accused the Government of rapidly transforming from the New Labour image they portrayed at the election, to an Old Labour strategy of putting up taxes and redistribution.
He condemned the Government’s decision to ditch road and rail projects, and AI investment, as shortsighted moves that will stymie economic growth.
“I think on the evidence of the last month they are moving very rapidly from being New Labour to Old Labour.”
“What they are revealing is that they are prioritising redistribution of wealth over growth.
“If you choose to stop a lot of those capital projects in order to fund public sector pay, that is basically redistribution and it reduces our long-term growth.”
He renewed criticism on Ms Reeves’ claims about an economic blackhole earlier this week, describing the claims as “outrageous” and wrong.
He also expressed disappointment in Ms Reeves’ personal attacks, after a cordial behind-the-scenes relationship between the pair over previous years.
Mr Hunt rose above her partisan politicking, arguing: “That’s not my sort of politics and I’m not going to respond in kind”.