Rachel Reeves is accused of 'outright falsehood' after claiming she protected 'working people' by not hiking their NI in her Budget
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Rachel Reeves was yesterday accused of ‘outright falsehood’ over her claims about Labour’s handling of the economy. The Chancellor was mauled by former Bank of England official Andrew Sentance over her response to figures showing inflation climbed to 2.6 per cent in November, an eight-month high amid increasing evidence that the party is derailing Britain’s recovery.
![[Former Bank of England money-setter Andrew Sentance said the Chancellor's comments were an 'outright falsehood']](https://i.dailymail.co.uk/1s/2024/12/18/21/93291909-0-image-a-15_1734556008343.jpg)
Elsewhere, a slump in UK manufacturing and the announcement of store closures by retailer Shoe Zone were both blamed on Ms Reeves’s Budget in October. Ms Reeves claimed in response to the inflation figures that she had protected working people by not hiking ‘their national insurance’ - even though she staged a £25bn raid on national insurance contributions by employers.
But Mr Sentance, a former Bank of England rate-setter, said: ‘How can the Chancellor say this with a straight face? It is an outright falsehood. ‘Businesses and economic forecasters have made clear that higher employer NI means higher inflation and a bigger wage squeeze for working people.’.
The row erupted ahead of a Bank meeting today [THURS] expected to see interest rates left on hold in a blow to millions of borrowers. Mr Sentance said hopes of eventually cutting the Bank’s benchmark interest rate - currently at 4.75 per cent - below 4 per cent had been left ‘in tatters’ as inflation remains stubborn.
Rachel Reeves claimed she had protected working people by not hiking ‘their national insurance’. As recently as the start of this month, the Bank’s governor Andrew Bailey hinted that there were likely to be four interest rate cuts in 2025. Now, markets expect to see just two cuts by the Bank’s Monetary Policy Committee (MPC).
