Rachel Reeves Gets Brutal Reality Check Just Hours After Claiming Labour Is Making 'Progress' On The Economy
Official figures released by the Office for National Statistics (ONS) revealed that inflation unexpectedly rose last month to 3.6% – its highest point in nearly 18 months.
The ONS blamed rising food and transport costs for the rise, which takes the rate of inflation to nearly double the Bank of England's 2% target.
The grim news was a brutal reality check for the chancellor, who just hours before had been telling the great and the good that Labour was making 'progress' on fixing the economy.
Making her annual Mansion House speech, Reeves said: 'This evening, I want to talk about the progress we have made over the past year – restoring stability, securing investment and delivering reform.
'And I want to talk about the future – the economy we are building, the opportunities we are seizing and the prosperity we are creating.'
Reeves went on to say that she was 'proud of how far we have come in a year of government'.
'I know that the changes we have made will transform our economy and our country, she said.
'And I know that you will waste no time in seizing the opportunities that lie ahead – to build a stronger economy, to deliver the renewal of Britain, to make working people in all parts of our country better off.'
Less than 12 later, at exactly 7am this morning, the ONS brought the chancellor back down to earth with a bump.
Economists had expected June's rate of inflation to remain at 3.4%, so the actual figure of 3.6% was a shock – and yet another blow for Reeves.
ONS acting chief economist Richard Heys said: 'Inflation ticked up in June driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year.
'Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year.'
Shadow chancellor Mel Stride laid the blame fairly and squarely at Reeves' door.
He said: 'This morning's news that inflation remains well above the 2% target is deeply worrying for families.
'Labour's decision to tax jobs and ramp up borrowing is killing growth and stoking inflation – making every day essentials more expensive – and because Labour are too weak to take tough choices on spending, more tax rises are on the way, leaving families facing ever-rising costs.'
Reeves said: 'I know working people are still struggling with the cost of living.'
She insisted Labour policies like increasing the national minimum wage and free breakfast clubs in schools would make a difference.
'But there is more to do ... to put more money into people's pockets,' she added.
With the economy contracting and more tax rises looming, the outlook remains gloomy for the UK – and the chancellor.
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