Jeremy Hunt warns Rachel Reeves against catastrophic Budget mistakes

Former Chancellor suggests £39 billion surplus instead of £22 billion black hole

Rachel Reeves has been cautioned by her predecessor, Jeremy Hunt, to steer clear of catastrophic Budget errors that could involve raising taxes and hindering economic growth. Hunt raised concerns about Reeves potentially making mistakes that could harm the economy, pointing out that the recent figures indicating a 0.5% growth in the economy for the three months leading up to June were lower than earlier estimates of 0.6%.

Labour government urged to avoid tax hikes that could stifle growth

Jeremy Hunt emphasized the importance of avoiding tax increases that could potentially impede growth, suggesting that the government may have a surplus of £39 billion rather than the claimed £22 billion deficit. He expressed skepticism about the narrative of inheriting the worst economic conditions since World War II and warned against detrimental Budget decisions.

Ministers face tough decisions ahead of upcoming Budget

As the Labour government prepares for its first Budget, ministers are already bracing for challenging choices related to tax policies, welfare reforms, and government spending. The warning from Hunt comes amidst concerns about the impact of potential tax hikes on economic growth and the need to make strategic decisions to support businesses and investments.

Economic growth outlook remains uncertain

Despite Labour's focus on a pro-growth agenda, recent polls indicate a lack of confidence among private companies regarding the economic outlook for the rest of the year. With manufacturing output expected to decline for the first time in months, there is a growing need for measures in the Budget to instill confidence and stimulate investment in the business sector.