Rachel Reeves Has Just Been Handed An Unexpected (And Much-Needed) Boost

Yahoo

2 days ago

Rachel Reeves has just been handed a major boost after new figures revealed the UK economy has grown more quickly than expected.
Official data from the Office for National Statistics showed that gross domestic product (GDP) grew by 0.4% in June.
That was higher than had been predicted by experts and suggests the UK economy is in a healthier state than had previously been thought.
Overall, the economy grew by 0.3% in the second quarter of 2025 (between April and June).
Although that is down on the 0.7% growth between January and March, it means that the UK economy has grown at nearly twice the rate of America's over the same period – 1% compared to 0.6%.
The new data will be warmly welcomed inside the Treasury after weeks of gloomy economic news, including rising inflation and a slowing jobs market.
Reeves said: 'Today's economic figures are positive with a strong start to the year and continued growth in the second quarter. But there is more to do to deliver an economy that works for working people.
'I know that the British economy has the key ingredients for success but has felt stuck for too long.
'That is why we're investing to rebuild our national infrastructure, cutting back on red tape to get Britain building again and boosting the national minimum wage to make work pay. There's more to do and today's figures only fuel my ambition.'
Liz McKeown, the ONS director of economic statistics, said the UK economy had 'recovered strongly' in June after weaker growth in April and May.
Nicholas Hyett, investment manager at Wealth Club said: 'GDP growth in June was a fair bit stronger than the market had been expecting. Put that together with some significant upward revisions to April's numbers and overall growth for the quarter wasn't bad at all.'
The apparent economic turnaround comes less than two months after Reeves openly wept on the Labour frontbench during prime minister's questions in a sign of the huge pressure she is under.
Nevertheless, the chancellor still faces an enormous challenge ahead of the autumn Budget, when she is widely expected to increase taxes once again to fill a £50 billion gap in her spending plans.
Shadow chancellor Mel Stride said: 'Any economic growth is welcome, but with business leaders saying that all indicators are flashing red, and key economists are warning that Rachel Reeves has created a £50 billion black hole in the public finances, the chancellor's economic vandalism is clear.
'Under Labour, we have already seen taxes hiked, inflation almost double, unemployment rise, and growth stagnate. Looming tax rises will only make things worse and working people will pay the price.'
But Lib Dem Treasury spokesperson Daisy Cooper said 'snails would scoff' at the rate of the UK's economic growth.
She said: 'Businesses are being crushed under the weight of the government's jobs tax, spiralling energy costs and reams of red tape, all holding down wages and the growth needed to rebuild our public services.'
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