How Labor persuaded Britain to bottom of G7 growth league

The ONS said the slowdown was broad-based and economists and business groups were placing the blame squarely on Starmer and Reeves.

“Uncertainty ahead of the Budget has likely played a big role, with firms reporting a slowdown in decision-making across the board,” says Ben Jones, chief economist at the Confederation of British Industry (CBI).

“The budget turned off the warning lights for work.”

Lindsay James, investment strategist at money manager Quilter, says of the slowdown: “Much of this will be a result of the gloomy messages that persisted in the run-up to the Budget, causing consumers and businesses to pause spending and wait for what was to come.”

Immediately after winning power, both Starmer and Reeves began belittling public finances and warning of huge tax increases, casting a dark shadow over the country.

Less than a month after coming to power, Reeves warned of a £22 billion black hole in the public finances and immediately canceled winter fuel payments for 10 million pensioners.

Shortly after this, Starmer warned that the October Budget would be “painful”.

In the months before the budget was due to be announced, leading Labor figures, including Ms Reeves, repeatedly warned that tax increases might be necessary.

David Bharier, head of research at the British Chambers of Commerce (BCC), said business confidence had fallen “at a time of rising concerns about tax and employment policy”.

Alongside the budget, Deputy Chancellor Angela Rayner also put forward plans to radically increase the power of unions and workers, despite warnings from senior leaders about the consequences.

According to the government’s own impact assessment, businesses will need to cover costs of up to £4.5bn to adapt.

On a monthly basis, the economy shrank by 0.1 percent in September, recording the first monthly contraction since April. Luke Bartholomew, Abrdn’s deputy chief economist, said the collapse was almost certainly caused by the Budget.