Rachel Reeves is in a hole – she must cut spending and improve public sector productivity
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RACHEL Reeves will return to Britain from her ill-timed trip to China facing the most blinding financial headache. Make no mistake: it’s been a week from hell for the Chancellor. There are worrying signs that forecasts of growth this year of two per cent will be downgraded.
![[Headshot of Rachel Reeves speaking.]](https://www.thesun.co.uk/wp-content/uploads/2025/01/0001-saturday-january-11-file-962835202.jpg?strip=all&w=960)
Businesses are warning her Budget will hit investment, put jobs at risk and cause inflation to spike. Mortgage rates will now stay higher for longer — hitting millions of families. And over the past few days, markets have taken fright at Britain’s massive borrowing — with some traders now mockingly referring to the falling Pound as the “Great British Peso”.
Reeves faces spending billions more on servicing our ballooning debt. Meanwhile, the union barons — whose members were handed £38billion of public money in pay rises last year — are already biting the Left hand that feeds. Teachers want a second inflation-busting rise in a year and, of course, the greedy train drivers are striking again.
The Chancellor is in a hole — far bigger than the £22billion black hole she has repeatedly blamed on the Tories. On the long flight back from Beijing she may mull her limited options. Further tax rises would snuff out any hope of growth, enrage hard-up voters and surely be political suicide.
So the only way out of this mess is for her to embark on wide and deep spending cuts, and a massive drive to improve public sector productivity. The unions would no doubt fight that tooth and nail. But the Government doesn’t now have the luxury of feather-bedding their civil service comrades.
