UK Unemployment Surges to Four-Year High: Reeves’ Budget Blamed for Jobs Crisis

In a stark blow to the UK economy, the latest figures from the Office for National Statistics (ONS) reveal that unemployment has climbed to 4.7% in the three months to May 2025, marking the highest level in nearly four years. This alarming rise, reported on July 17, 2025, continues a troubling month-on-month increase in joblessness since Chancellor Rachel Reeves’ controversial autumn budget, with critics pointing to her £25 billion tax raid on businesses as the primary culprit.

The ONS data paints a grim picture: payroll numbers have plummeted by 178,000 in the 12 months to June 2025, with a further 41,000 jobs lost between May and June alone. Since Reeves’ budget took effect in April, the UK has seen a staggering 276,000 jobs vanish, including a single-month drop of 109,000 in May—the largest since the 2020 Covid lockdown. The hospitality sector has been particularly hard-hit, with 69,000 jobs lost in pubs, restaurants, and hotels since the budget’s introduction, a sharp reversal from the 18,000 jobs created in the same period last year under the previous government.

Reeves’ budget, unveiled in October 2024, included a £25 billion increase in employer National Insurance Contributions (NICs) and a 6.7% hike in the national living wage, measures that business leaders and economists have branded a “jobs tax.” The impact was immediate, with companies scaling back hiring, freezing recruitment, or cutting staff to offset the sharply rising payroll costs. Julian Jessop, an economics fellow at the Institute of Economic Affairs, described the slump as a “painful lesson in basic economics,” arguing that making it more expensive to employ people inevitably leads to fewer jobs. The British Chambers of Commerce echoed this sentiment, noting that “warning lights” on recruitment and employment were already flashing before the budget’s full effects were felt.

The month-on-month rise in unemployment since April—when the NICs hike took effect—tells a clear story. The unemployment rate rose from 4.4% in the three months to December 2024 to 4.5% in the first quarter of 2025, then to 4.6% in the three months to April, and now to 4.7%. Job vacancies have also continued to slide, dropping by 63,000 in the three months to May, signalling a broader slowdown in the labor market. ONS economic director Liz McKeown underscored the severity of the situation, stating, “The job market continues to weaken. The number of job vacancies is still falling and has now been dropping continuously for three years.”

Critics, including shadow business secretary Andrew Griffith, have been quick to pin the blame on Reeves’ fiscal policies. “Unemployment is the only thing growing under Labour,” Griffith remarked, highlighting the government’s failure to deliver on its pre-election promise of “growth, growth, growth.” Posts on X reflect similar public frustration, with users like @CutMyTaxUK stating, “Tax something more and you get less of it. That’s also true of jobs as Rachel Reeves has proved with her tax hikes on jobs.” Shadow chancellor Mel Stride has warned that the economic fallout from Reeves’ budget is undermining tax revenues, potentially forcing further tax rises or spending cuts to balance the books.

The broader economic context only amplifies concerns. The UK economy shrank by 0.3% in April 2025, following a 0.1% contraction in May, defying expectations of growth and adding pressure on Reeves as she prepares for the upcoming autumn budget. The Institute for Fiscal Studies has cautioned that any further economic downturn could necessitate additional tax hikes, with Reeves’ fiscal headroom already described as hanging by a “gnat’s whisker.” Meanwhile, inflation has climbed to 3.8%, further squeezing businesses and consumers alike.

Reeves has defended her budget, arguing that it aims to “fix the foundations” of the economy and boost long-term growth. However, the immediate fallout—rising unemployment, falling job vacancies, and a shrinking economy—has fueled accusations of economic mismanagement. As one X user put it, “Reeves and her Budget have brought the economy to the cliff edge of catastrophe.” With businesses closing, wealthy individuals reportedly fleeing, and fears of further tax rises looming, the Chancellor faces mounting pressure to reverse course or risk deepening the UK’s jobs recession.

As the nation braces for the next budget, the question remains: can Reeves deliver on her promise to put “more money in people’s pockets,” or will her policies continue to drive jobs and growth into the ground? For now, the unemployment figures serve as a stark reminder of the real-world consequences of her tax-heavy approach, leaving many to wonder if Labour’s economic vision is unravelling before it even takes hold.

UK Inflation Soars to 3.6% - A Predictable Fiasco Ignored by So-Called Experts

In a development that should surprise absolutely no one with a functioning grasp of economics, UK inflation spiked to 3.6% in June 2025, according to the Office for National Statistics (ONS). This marks a jump from May’s 3.4% and a significant leap from December 2024’s 2.5%, cementing the UK’s ongoing struggle with rising prices. Yet, financial pundits and self-proclaimed experts are clutching their pearls, calling this surge “unexpected.” The real shock here isn’t the inflation figure—it’s the collective amnesia of analysts who somehow missed the neon-lit warning signs, particularly those flashing since Chancellor Rachel Reeves’ budget.

Actual vs. Estimated vs. Previous: The Numbers Don’t Lie

The Consumer Prices Index (CPI) inflation rate for June 2025 hit 3.6%, up from 3.4% in both April and May, and a far cry from the 2.5% recorded in December 2024. Economists, in their infinite wisdom, had forecasted inflation would hold steady at 3.4%, a prediction that now looks laughably optimistic. The Bank of England’s own May 2025 forecast expected inflation to climb to 3.5% by Q3, while the Office for Budget Responsibility (OBR) projected a peak of 3.7% around the same period. Both were closer to the mark than the City’s analysts, but even they underestimated the pace of the rise.

Core inflation, which strips out volatile food and energy prices, climbed to 3.7% in June, up from 3.5% in May, signalling persistent underlying pressures. Services inflation, a key metric for the Bank of England, remained stubbornly high at 4.7%. For context, inflation was at a 41-year high of 11.1% in October 2022, and while we’re nowhere near that level, the steady climb from the 2% target is rattling nerves—and wallets.

The Obvious Culprits: Reeves’ Budget and More

Let’s cut through the noise: this inflation spike was as predictable as rain in Manchester. The main drivers are clear, and they’ve been brewing for months, if not years. First, energy and housing costs continue to bite. The ONS highlighted that transport costs, particularly airfares and rail tickets, surged due to smaller-than-expected declines in fuel prices compared to last year. Food prices also rose at a brisk 4.5%, the highest rate since February 2024. Private rents, meanwhile, climbed 6.7% in the year to May, and house prices ticked up by 3.9%. These aren’t random blips—they’re structural pressures exacerbated by policy choices.

Enter Rachel Reeves’ autumn budget, a masterclass in fiscal recklessness. Her £25 billion increase in employers’ National Insurance contributions and a 6.7% hike in the minimum wage from April 2025 have sent shockwaves through businesses. These costs don’t vanish into thin air; they’re passed on to consumers through higher prices. Add to that the Ofgem energy price cap increase of 1.2% in January, with more rises expected in April, and it’s no wonder inflation is climbing. The budget’s tax hikes and borrowing spree have also fuelled domestic inflationary pressures, as businesses grapple with higher costs and a weaker economic outlook.

Then there’s the global context. Donald Trump’s tariff threats, though partially walked back, have rattled markets and raised fears of imported inflation. Supply chain disruptions lingering from the post-COVID era and the Russia-Ukraine conflict continue to keep energy and food prices volatile. These factors aren’t new, yet the “experts” seem perpetually caught off guard.

The “Unexpected” Farce: Experts in Denial

The chorus of financial pundits crying “shock” at these figures is almost comical. The Independent reported that analysts expected a steady 3.4%, while posts on X echoed the same bewildered tone, with one user lamenting the “huge blow” to Reeves as if this wasn’t written on the wall. The Spectator’s Ross Clark nailed it, pinning the 3.5% spike in April squarely on Reeves’ “economically illiterate” policies, yet the broader analyst community seems to have missed the memo.

Let’s be clear: anyone paying attention could see this coming. Reeves’ budget was a textbook recipe for inflation—higher taxes, increased business costs, and a borrowing binge that spooked markets and pushed up gilt yields. The OBR slashed its 2025 growth forecast to 1%, warning of stagflation risks as early as March. Yet, City economists and talking heads act like this 3.6% figure fell from the sky. Did they miss the ONS reports on rising rents? The Ofgem announcements? The minimum wage hike? Apparently so.

The Bank of England, too, deserves a side-eye. Its “gradual and careful” approach to rate cuts now looks like a tightrope walk over a volcano. With inflation climbing, the odds of an August rate cut from 4.25% to 4% are fading, as higher interest rates may be needed to tame prices—bad news for mortgage holders. Yael Selfin of KPMG UK warned that inflation could hit 4% by autumn, a view echoed by the ONS’s Richard Heys, who pointed to persistent tax-driven pressures.

Reeves’ Response: More Spin Than Substance

Chancellor Reeves, ever the optimist, insists her “number one mission” is “putting more pounds in people’s pockets” through growth. In her Mansion House speech, she doubled down on deregulation and investment to “kickstart” the economy. But with the UK teetering on stagflation—low growth paired with high inflation—her promises ring hollow. The economy shrank by 0.3% in April and again in May, and her fiscal policies are squeezing households and businesses alike. Shadow Chancellor Mel Stride called her budget “economic vandalism,” and for once, the hyperbole isn’t far off.

Reeves’ claim that she’s fighting the cost-of-living crisis is hard to swallow when her policies are directly fuelling it. The Lib Dems’ Ed Davey warned of a “new era of stagflation,” and even Treasury Minister James Murray admitted families are “still finding it hard to make ends meet.” Yet, the government’s response is to double down on spending plans with a razor-thin £9.9 billion surplus projected by the OBR—hardly a buffer if growth stalls further.

The Road Ahead: No Easy Fixes

This inflation spike isn’t a one-off; it’s a symptom of deeper systemic issues. The UK’s economy is caught in a vice of high costs, weak growth, and policy missteps. While Reeves talks up growth, the reality is that businesses are passing on higher costs, households are stretched by rising rents and bills, and the Bank of England is stuck between a rock and a hard place. The 2% inflation target looks increasingly like a distant dream, with forecasts suggesting a peak of 4% later this year.

The pundits’ surprise at these figures is a damning indictment of their tunnel vision. When you raise taxes, hike wages, and ignore global pressures, inflation doesn’t just creep up—it gallops. Instead of feigning shock, these experts should be asking why they didn’t see it coming. The answer? They’re too busy reading their own headlines to notice the real world. For UK households, the cost of this oversight is measured in higher bills, pricier groceries, and fading hopes of relief. Reeves may want “more pounds in pockets,” but right now, those pounds are buying less every day.

Reeves’ Mortgage Rule Loosening: A Recipe for Disaster

Today, Chancellor Rachel Reeves is set to announce a significant relaxation of mortgage lending rules, a move heralded as part of the “Leeds Reforms” aimed at boosting homeownership and economic growth. This policy, which includes increasing access to high loan-to-income (LTI) mortgages—loans exceeding 4.5 times a borrower’s annual salary—and a government-backed guarantee for 95% mortgages, is being sold as a lifeline for first-time buyers. However, this approach is not only reckless but dangerously reminiscent of past financial missteps that fuelled the boom-and-bust cycles of the UK property market. Far from solving the housing crisis, Reeves’ reforms risk inflating an already strained market, endangering borrowers and the wider economy

A Dangerous Echo of the Past

The UK housing market has a long history of volatility driven by lax lending practices. The 2007-08 global financial crisis, triggered in part by subprime lending in the US, was exacerbated in the UK by overly generous mortgage policies that encouraged borrowers to take on unsustainable debt. High LTI mortgages, like those Reeves is championing, were a hallmark of that era. Lenders, emboldened by loose regulations, extended credit to borrowers who could barely afford repayments, inflating house prices to unsustainable levels. When the bubble burst, homeowners faced repossession, banks teetered on collapse, and the economy plunged into recession.

Reeves’ plan to allow banks to increase high LTI mortgages—potentially pushing the proportion of such loans from 9.7% to 11% by the end of 2025—ignores these lessons. The Bank of England’s own data shows that high LTI loans are riskier, as they stretch borrowers’ finances to the breaking point, especially in an environment of volatile interest rates. The 2008 crisis demonstrated that encouraging reckless lending doesn’t just harm individual borrowers; it creates systemic risks that can cripple the financial system. By loosening these caps, Reeves is betting on short-term economic stimulus at the cost of long-term stability, a gamble that history suggests will end badly.

Inflating the Bubble, Not Solving the Crisis

The UK’s housing crisis is fundamentally a supply problem—too few homes for a growing population. Yet Reeves’ reforms focus on demand, pumping more credit into an already overheated market. By enabling buyers to borrow more, the policy will likely drive house prices higher, as increased purchasing power chases a limited number of properties. The Guardian reported in April 2025 that similar loosening of affordability tests by lenders like Santander led to borrowers accessing £10,000 to £35,000 more, but critics warned this could “push up house prices even faster.” Jonathan Moser, CEO of Mo’Living, cautioned that such measures risk “skyrocketing” prices, making homeownership even less attainable for those Reeves claims to help.

The government’s “Freedom to Buy” scheme, which guarantees 95% mortgages, further exacerbates this issue. By covering banks’ losses on these high-risk loans, the Treasury is incentivising lenders to prioritise volume over prudence, echoing the reckless lending practices that preceded the 2008 crash. This artificial boost to demand does nothing to address the root cause of unaffordability—insufficient housing supply. Instead, it risks creating a new generation of homeowners trapped in negative equity if prices collapse, as they did in the early 1990s and post-2008.

The Human Cost of Risky Lending

Reeves’ reforms are being sold as a boon for first-time buyers, with the Bank of England estimating that 36,000 more high LTI mortgages could be issued annually. But this ignores the harsh reality for borrowers. High LTI loans mean higher monthly repayments, leaving households vulnerable to even small interest rate hikes. With the Bank of England’s base rate at 4.25% as of May 2025, and inflation rising to 3.5%, the risk of future rate increases is real. Borrowers stretched to their limits could face default and repossession if economic conditions worsen—a scenario made more likely by global uncertainties like US tariffs and geopolitical tensions.

Posts on X reflect growing public concern, with users like @nickdebois warning that “with increasingly volatile interest rates and unemployment levels, this is risky … and we have been here before.” Another user, @boblister_poole, highlighted fears that Reeves’ push could “end in more people losing their homes.” These sentiments underscore a critical truth: loosening lending rules may offer short-term relief but exposes borrowers to long-term peril.

Economic Folly in a Fragile Global Context

The timing of Reeves’ announcement could not be worse. The UK economy faces headwinds from global trade disruptions, particularly US tariffs under President Trump, which could weaken demand and increase costs for UK businesses. The Bank of England has already noted increased financial instability due to these global shifts, with a weaker US dollar and higher borrowing costs adding pressure. Encouraging households to take on more debt in this environment is akin to pouring fuel on a smouldering fire. If global demand falters or supply costs rise, UK borrowers could face a perfect storm of higher repayments and economic stagnation.

Moreover, the Financial Conduct Authority’s (FCA) earlier moves to relax affordability stress tests in March 2025 have already set the stage for riskier lending. Reeves’ latest reforms double down on this approach, prioritising growth over stability. The FCA’s own data shows that 68% of first-time buyers are taking out mortgages with terms of 30 years or longer, a sign of how stretched finances already are. Further loosening rules risks pushing borrowers into even longer terms or interest-only mortgages, which the FCA is now considering, trapping them in debt for decades.

A Better Path Forward

If Reeves truly wants to tackle the housing crisis, she must shift focus from demand-side gimmicks to supply-side solutions. Increasing housing construction—through streamlined planning permissions, incentives for developers, and investment in social housing—would address the root cause of unaffordability. The Bank of England itself noted that 80% of potential first-time buyers lack the savings for a 5% deposit, highlighting the need for policies that reduce upfront costs rather than inflate borrowing.

Additionally, maintaining prudent lending standards is essential to protect consumers and the economy. The post-2008 regulations, while imperfect, were designed to prevent another crisis. Scrapping them risks repeating past mistakes. Instead, Reeves could explore targeted support for first-time buyers, such as shared ownership schemes or deposit assistance, without destabilising the financial system.

Conclusion

Rachel Reeves’ decision to loosen mortgage rules is a reckless gamble that prioritises short-term political wins over long-term economic stability. By flooding the market with high-risk loans, she risks inflating a property bubble that could burst with devastating consequences for homeowners and the economy. History shows that lax lending fuels boom-and-bust cycles, and today’s fragile global context only heightens the danger. Rather than repeating the mistakes of the past, Reeves should focus on building more homes and supporting buyers without endangering their financial future. The UK housing market deserves better than a policy that bets the house on borrowed time.

UK Economy Shrinks in May 2025: A Shocking Blow to The Expectations of The Ignorant

On July 11, 2025, the Office for National Statistics (ONS) reported that the UK economy contracted by 0.1% in May, marking a second consecutive month of decline following a 0.3% drop in April. This unexpected downturn has stunned economists and media experts, who widely anticipated a modest 0.1% expansion. The failure to predict this contraction raises serious questions about the foresight of economic analysts, particularly in light of mounting pressures from domestic policies and global uncertainties. This article examines the reasons behind the GDP fall, with a focus on Chancellor Rachel Reeves’ budget, and highlights why the quarterly GDP figures may be overstated due to significant ONS adjustments.

A Missed Forecast: Why Economists and Media Got It Wrong

The consensus among City economists, as reported by Reuters, was for a slight rebound in May, with expectations of 0.1% growth following April’s contraction. Yet, the ONS data revealed a continued decline, catching analysts off guard. Posts on X echoed this sentiment, with some users arguing that the shrinkage was foreseeable given the economic headwinds. One user remarked, “Nobody in business believes the U.K. economy ‘unexpectedly’ shrank. We knew it was coming,” pointing to Labour’s policies as a key driver. This disconnect suggests that economists and media have underestimated the immediate impact of recent policy changes and global trade disruptions, focusing instead on earlier positive quarterly data that masked underlying weaknesses.

The failure to anticipate this downturn is particularly striking given the clear signals of economic strain. Businesses have been vocal about the pressures from higher taxes and global uncertainties, yet these were seemingly overlooked in mainstream forecasts. This raises concerns about the reliability of economic modelling and the media’s tendency to over-rely on optimistic projections, potentially ignoring on-the-ground realities.

Reasons for the GDP Fall

The May contraction was driven by several factors, with the ONS pinpointing sharp declines in manufacturing and construction as primary culprits. Here’s a breakdown of the key reasons:

1. Rachel Reeves’ Autumn Budget and Tax Rises: - 

The Labour government’s £40bn tax-raising budget in October 2024, particularly the £25bn increase in employer National Insurance contributions (NICs) effective from April 2025, has significantly impacted businesses. Companies have responded by cutting jobs and scaling back investment, with HMRC data showing a loss of 109,000 jobs in May—the largest monthly drop since the 2020 COVID lockdown. Shadow Chancellor Mel Stride labelled this “economic vandalism,” arguing that the budget has dented business confidence and stifled growth. - The budget’s impact was compounded by other measures, such as changes to stamp duty thresholds, which led to a slump in real estate and legal activity in April and May. This contributed to a 0.4% contraction in the services sector in April, with lingering effects into May.

2. Global Trade Uncertainty and Trump’s Tariffs: - 

The global economic environment has been rocked by US President Donald Trump’s tariff announcements, which began impacting UK exports in early 2025. The ONS reported a £2bn drop in exports in April, the largest monthly decrease since 1997, as companies faced uncertainty and higher costs. While a US-UK trade deal has mitigated some of the steepest tariffs, the broader “tariff war” has dampened business investment and consumer spending. Reeves herself acknowledged that “uncertainty about tariffs” contributed significantly to the April and May contractions.

3. Sector-Specific Weaknesses: - 

Manufacturing output fell by 0.9% in May, driven by declines in oil and gas extraction, car manufacturing, and the volatile pharmaceutical industry. Construction also contracted by 0.6%, reflecting poor weather and reduced investment. Although the services sector grew by 0.1%, driven by legal firms recovering from stamp duty changes, it was not enough to offset the broader declines. - Retail sales were “very weak,” further signalling subdued consumer demand amid rising inflation and economic uncertainty.

4. Fragile Business and Consumer Confidence: - 

Business surveys, such as the Confederation of British Industry’s growth indicator, have shown firms expecting to cut hiring and raise prices in early 2025 due to increased costs from NICs and a 6.7% rise in the national living wage. Consumer confidence has also waned, with households dipping into savings and real GDP per head falling by 0.2% in Q3 2024. This fragile sentiment has amplified the economic slowdown.

Overstated Quarterly Figures: The ONS Adjustment Issue

While the monthly GDP figures for April and May 2025 paint a grim picture, the quarterly figures tell a different story—one that may be misleadingly optimistic. The ONS reported that the economy grew by 0.5% in the three months from March to May 2025 compared to the previous three months, following a strong 0.7% growth in Q1 2025. However, this quarterly growth is overstated due to significant ONS adjustments and seasonal factors.

- Frontloading in Q1 2025: 

The robust Q1 growth was driven by temporary factors, such as manufacturers rushing exports to beat US tariff deadlines and homebuyers completing purchases before stamp duty tax breaks expired. These activities artificially boosted early-year figures, creating a “bumper” effect that has since unwound, contributing to the April and May contractions. Economists like Paul Dales from Capital Economics suggest that this frontloading has skewed quarterly data, making the economy appear healthier than its underlying trajectory.

- Seasonal Adjustment Issues: 

The ONS has noted a pattern since 2022 where GDP tends to be stronger in the first quarter and weaker in the second half, raising questions about the accuracy of seasonal adjustments post-COVID. These adjustments may exaggerate quarterly growth, masking the true extent of the slowdown in monthly data. For instance, the 0.5% growth in the March-to-May period contrasts sharply with the monthly declines, suggesting that the quarterly figure is not fully reflective of current economic momentum.

- Volatility in Monthly Data: 

Monthly GDP figures are notoriously volatile and subject to revisions, but the consistent downturns in April and May indicate a genuine weakening. The ONS’s reliance on broader quarterly metrics can obscure these short-term trends, leading to an overestimation of economic health. Economists like Sanjay Raja from Deutsche Bank have revised Q2 2025 growth expectations downward to 0.1% from 0.25%, aligning more closely with the monthly data.

Implications and Outlook

The unexpected GDP contraction in May, coupled with the overstated quarterly figures, poses significant challenges for Chancellor Rachel Reeves, who has made economic growth her “number one mission.” The data underscores the fragility of the UK economy, with analysts like Hailey Low from the National Institute of Economic and Social Research warning that growth remains “fragile” amid global and domestic uncertainties.

The Bank of England is now widely expected to cut interest rates from 4.25% in August, as the weak GDP figures outweigh concerns about inflation, which has risen above 3%. However, with forecasts for 2025 GDP growth downgraded to 0.5–1.2% by institutions like Capital Economics and Goldman Sachs, the outlook remains subdued. Reeves faces pressure to balance her fiscal plans, with speculation of further tax rises in the autumn budget adding to business and consumer unease.

Conclusion

The 0.1% GDP contraction in May 2025, following a 0.3% drop in April, has exposed the vulnerability of the UK economy and the shortcomings of economic forecasting. Far from being “unexpected,” the downturn reflects the tangible impacts of Reeves’ tax-heavy budget, global trade disruptions from US tariffs, and sector-specific weaknesses in manufacturing and construction. The quarterly growth figures, while positive, are inflated by earlier frontloading and questionable ONS adjustments, masking the economy’s underlying struggles. As Reeves prepares for the autumn budget, the government must address these challenges head-on to restore confidence and deliver on its growth promises. For now, the UK economy remains on shaky ground, with businesses and consumers bracing for a turbulent second half of 2025.

Gilts Breach The Tears Ceiling

The £50BN Tears of Rachel Reeves

 

Yesterday's financial fiasco, triggered by Chancellor Rachel Reeves' tearful press conference, saw a staggering £50 billion wiped off the value of UK gilts, with yields spiking by 0.25 percentage points to levels unseen since early 2025. This catastrophic market reaction is a damning indictment of the Labour government's economic incompetence and a dire warning to its "student politicians" about the perils of meddling with the economy.

The Cataclysmic Fallout

The immediate aftermath was a bloodbath for gilt investors. The 10-year yield rocketed, erasing £50 billion from the market cap of government bonds in a single session. Reeves' emotional display, questioning the government's fiscal strategy, sent shockwaves through the markets, signalling uncertainty and panic. This wasn't just a blip; it was a full-scale assault on investor confidence.

The Devastating Consequences

This debacle is not just a numbers game; it's a disaster with far-reaching implications:

1. **Soaring Borrowing Costs**: With yields at nose-bleed levels, the government's borrowing costs have skyrocketed. This is a body blow to public finances already teetering under a £100 billion debt mountain. Every percentage point increase in yields translates into billions more in interest payments, starving other critical public services of funds.

2. **Shattered Investor Trust**: The gilt market is the backbone of the UK's financial system, crucial for pension funds, insurers, and global investors. Yesterday's meltdown has obliterated trust, risking a prolonged sell-off that could keep yields elevated and stability elusive.

3. **Economic Sabotage**: The volatility has unleashed a storm of uncertainty, deterring foreign investment and throttling growth. Businesses are hitting the pause button on expansion, and consumers are tightening their belts, fearing a downturn. This is economic self-sabotage on a grand scale.

4. **Political Suicide**: For a government already under fire for its economic missteps, this is political dynamite. It exposes the glaring lack of experience and competence within Labour's ranks, turning "student politicians" into a liability rather than an asset.

The False Dawn of Recovery

By this morning, the markets had marginally stabilised, with yields retreating slightly. But don't be fooled—this is no victory. It's a temporary respite that masks the deeper damage done. The £50 billion loss is a scar that won't heal quickly, and the lesson for Labour is clear: markets don't forgive, and they don't forget.

The Brutal Lesson

This isn't just a market correction; it's a wake-up call for Labour's inexperienced cabal. The £50 billion gilt wipeout is a textbook example of how not to handle the economy. Clear, consistent communication and a solid understanding of market dynamics are non-negotiable. Yesterday's blunder shows that interfering with market expectations without a plan is economic heresy.

Conclusion

The £50 billion gilt disaster yesterday is a catastrophic failure of Labour's economic strategy, a £50 billion lesson in the dangers of incompetence. While the markets have calmed slightly, the damage is done, and the cost will be borne by the UK for months, if not years. For Labour's "student politicians," this is a brutal initiation into the realities of economic governance. The message is unequivocal: stop fucking with the economy, or face the consequences. The UK's economic stability—and Labour's political future—depend on it.

Advice To The Head of Russia's Central bank

 

The head of Russia’s Central Bank, Elvira Nabiullina, gave quite candid take: growth over the past two years came from tapping idle resources - unused labor, spare capacity, bank capital, and the Wealth Fund. Her warning: “Many of these resources are now truly exhausted.” pic.twitter.com/IU4SlkpenY

— Tatarigami_UA (@Tatarigami_UA) June 25, 2025

 

Don't go anywhere near windows, or accept offers of cups of tea!

Reeves’ Tax Hikes Tank Retail and Balloon Borrowing

Today’s economic data paints a grim picture for the UK, with public sector borrowing surging to £17.7 billion in May 2025 and retail sales plummeting by 2.7%—the sharpest drop since December 2023. These figures, released by the Office for National Statistics, lay bare the catastrophic impact of Chancellor Rachel Reeves’ economic policies. Far from stabilising the nation’s finances, her tax-heavy approach has throttled consumer spending, crushed business confidence, and sent borrowing soaring to the second-highest May figure on record. This is not just a blip—it’s a policy-driven collapse, and Reeves is squarely to blame.

 

The borrowing numbers are staggering. Despite a record £30.2 billion tax take in April and May, driven largely by punitive hikes in business taxes and national insurance, the government still borrowed £17.7 billion last month—£0.7 billion more than May last year. Economists had forecast a more modest £17.1 billion, but Reeves’ profligate spending, coupled with her failure to stimulate growth, has blown those projections out of the water. The UK’s net debt-to-GDP ratio now stands at 96.4%, up 0.5 percentage points from a year ago, creeping dangerously close to unsustainable levels. This is the legacy of a Chancellor who promised fiscal responsibility but has delivered a borrowing binge to fund Labour’s bloated spending commitments.

 

Retail sales, meanwhile, are in a nosedive. The 2.7% drop in May reflects a collapse in consumer confidence, with shoppers cutting back on everything from food to clothing. Supermarkets, clothing retailers, and furniture stores all reported dismal performance, as households reel from higher taxes, rising household bills, and an economy that shrank unexpectedly by 0.3% in recent data. This isn’t just a seasonal slump—it’s a direct consequence of Reeves’ tax raid, which has sucked disposable income out of households and left businesses grappling with increased costs. The Rightmove data underscores the gloom, with new seller asking prices dropping by £1,277 to £378,240, signalling a housing market teetering on the edge.

 

Reeves’ defenders might point to the slight dip in borrowing from April’s £20.2 billion or the boost from higher business taxes as signs of progress. But this is cold comfort when the broader picture is so dire. The extra tax revenue hasn’t closed the deficit—it’s merely propped up a government addicted to spending, with no clear plan to restore growth. Her decision to raise national insurance and business taxes has backfired spectacularly, choking off the very economic activity needed to balance the books. Retail sales don’t just fall 2.7% because of bad weather; they collapse when people can’t afford to spend, and businesses can’t afford to operate.

 

On X, the public’s frustration is palpable. Users have branded Reeves’ policies a “doom loop,” with one post slamming her for “crashing the economy” and another pointing out the absurdity of borrowing more while retail sales— a key revenue driver—tank. These aren’t just numbers; they’re the livelihoods of millions, squeezed by a Chancellor who seems oblivious to the damage she’s causing.

 

Reeves’ fiscal strategy is a masterclass in self-sabotage. Her tax hikes were supposed to plug the deficit, but instead, they’ve killed demand and driven borrowing higher. Her refusal to rule out further tax rises, as reported by the BBC on June 12, only deepens the sense of dread. Adjusting fiscal rules to allow an extra £113 billion in investment over five years sounds ambitious, but it’s reckless when the economy is already on its knees.

 

The Chancellor’s economic vision is a mirage—promising stability while delivering chaos. If she continues down this path, the UK faces a future of spiralling debt, stagnant growth, and a retail sector on life support. Reeves must reverse course, slash taxes to restore confidence, and prioritise growth over ideological spending sprees. The clock is ticking, and Britain can’t afford another month of her disastrous stewardship.

Reeves’ Budget Disaster: Employment Plummets as Tax Hikes Crush the Private Sector

 

In a devastating blow to the UK economy, today’s employment figures from the Office for National Statistics (ONS) reveal a catastrophic drop of 109,000 jobs in May 2025, marking the largest single-month decline in five years. This brings the total jobs lost since Chancellor Rachel Reeves’ tax-heavy budget to a staggering 276,000. Unemployment has now climbed to 4.6%, with payroll employment falling for seven consecutive months—a trend unseen outside the pandemic era. To make matters worse, the ONS has admitted to yet another blunder, revising last month’s figures downward due to their own incompetence, further exposing the fragility of the economic landscape Reeves has created.

 

For the first time in decades, barring the unprecedented disruption of COVID-19, UK employment levels have not just stagnated but actively contracted. This is no accident—it’s the direct result of Reeves’ ill-conceived budget, which piled punishing tax increases on businesses and workers alike. Her decision to hike employer National Insurance contributions has proven particularly toxic, strangling small and medium-sized enterprises (SMEs) and forcing widespread layoffs. The hospitality sector, already battered by rising costs, has been hit hardest, with businesses slashing jobs to survive the Chancellor’s fiscal onslaught.

 

The ONS’s latest embarrassment—revising April’s employment figures downward—only compounds the sense of chaos. This isn’t just a statistical hiccup; it’s a damning indictment of an institution failing to keep pace with a crumbling economy. The revised data shows an even bleaker picture than previously thought, with job losses accelerating at an alarming rate. Yet Reeves continues to peddle her budget as a “growth plan,” a claim that now borders on delusional.

 

The Chancellor’s tax policies are grinding the private sector to dust. By raising taxes on jobs and investment, Reeves has created a vicious cycle: businesses cut back, unemployment rises, tax receipts fall, and the deficit grows. Posts on X capture the public’s fury, with one user noting, “Tax something more and you get less of it. That’s also true of jobs as Rachel Reeves has proved.” Another warned of a brain drain, with “a millionaire leaving every 45 minutes” as the wealthy flee her punitive regime.

 

The future looks grim. Reeves’ budget has not only obliterated jobs but also crushed business confidence. Record business liquidations and slowing wage growth signal a deepening crisis. Her refusal to prioritise growth—dismissing the need for a coherent plan in favour of “stability”—has left the economy rudderless. As one X user put it, “Raising employers NI was the worst tax to increase. Businesses are cutting back investment and employment. Entirely predictable.”

 

Reeves’ tenure as Chancellor is shaping up to be a masterclass in economic mismanagement. Her tax hikes have sparked an employment crisis, exposed the ONS’s incompetence, and set the stage for a prolonged private-sector collapse. With inflation creeping up and tax receipts dwindling, the UK is hurtling toward a fiscal cliff. The question isn’t whether Reeves will face the sack—it’s when.

 

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Legal & General’s Net Zero Obsession: A Recipe for Wrecking Your Pension

 

Legal & General (L&G), one of the UK’s largest asset managers, oversees more than £1.2 trillion in assets, including the workplace pensions of millions of Britons. If you have a pension, there’s a good chance L&G manages it. Their decisions shape your financial future, so you’d hope their sole priority is maximising returns to ensure a comfortable retirement. But last week. However, their aggressive commitment to net zero is putting your pension at risk. Here’s why.

The Net Zero Pledge: Ideology Over Returns

L&G has pledged to achieve a net zero asset portfolio by 2050, with interim targets like a 50% reduction in carbon emissions intensity by 2025 and 65% by 2030. This sounds noble—reducing carbon emissions to combat climate change—but it’s a dangerous gamble with your retirement savings. Their Climate Impact Pledge pushes companies they invest in to align with a 1.5°C net zero transition, using their £1.2 trillion clout to pressure firms into compliance.

This isn’t about prudent investing; it’s about ideology. L&G’s focus has shifted from maximising returns to enforcing environmental goals, even when they conflict with financial performance. By prioritising net zero, they’re making decisions that could erode the value of your pension, and here’s how.

The Economic Fallout of Net Zero

1. Divesting from Profitable Sectors: L&G’s net zero strategy involves shunning or pressuring high-carbon industries like oil, gas, and mining. These sectors, while not trendy, have historically delivered strong returns. Energy stocks, for instance, outperformed many “green” investments during the 2022 energy crisis, with oil and gas companies posting record profits. By divesting or limiting exposure to these sectors, L&G risks missing out on gains that could bolster your pension. A 2025 report noted that UK pension providers, including L&G, scored poorly on phasing out fossil fuels, suggesting they’re already restricting investments in these still-profitable areas.
2. Overpaying for Green Hype: L&G is funnelling billions into “clean infrastructure” like wind farms, solar parks, and net zero-ready homes. While renewables have potential, many green investments are speculative, heavily subsidised, and prone to underperformance. For example, offshore wind projects in the UK have faced cost overruns and delays, with companies like Ørsted slashing profit forecasts in 2023. Betting big on unproven technologies or overhyped green stocks—often trading at inflated valuations—exposes pensions to unnecessary risk. If these investments flop, it’s your retirement that takes the hit.
3. Engagement Over Performance: L&G’s Climate Impact Pledge emphasises “engaging” with companies to improve their net zero alignment. This means spending resources to pressure firms into costly transitions rather than focusing on those delivering the best returns. Forcing companies to prioritise emissions over efficiency can lead to higher costs, lower profits, and weaker stock performance—directly impacting your pension’s growth.
4. Transition Risks: A 2025 report warned that UK pension funds could see investment returns decline by over 20% by 2040 due to climate-related transition risks. L&G’s aggressive push for net zero accelerates these risks by forcing rapid shifts away from reliable revenue streams toward untested green ventures. If markets or policies shift unexpectedly—say, if net zero mandates ease or green subsidies dry up—your pension could be left holding overvalued, underperforming assets.

The Numbers Don’t Lie

L&G manages £1.2 trillion, a sum so vast it could fund the UK’s NHS for a decade. Yet, their 2025 target of a 50% emissions intensity reduction is already shaping their investment choices. This isn’t a distant goal; it’s affecting decisions now. In 2023, they reported being “on track” for this target, meaning they’re actively reshaping portfolios to prioritise emissions over returns.

 

Pensions rely on compound growth over decades. Even a 1% annual underperformance due to net zero-driven decisions could shave hundreds of thousands of pounds off your retirement pot. For example, a £100,000 pension growing at 5% annually would reach £265,000 in 20 years. At 4%, it’s only £219,000—a £46,000 loss. Multiply that across millions of savers, and L&G’s net zero obsession could cost billions in lost retirement wealth.

The Bigger Picture

L&G’s not alone. Other UK pension providers like Aegon and Aviva are also chasing net zero, but L&G’s scale makes its decisions seismic. Their influence can reshape entire markets, forcing companies to adopt costly green policies or risk losing investment. This creates a ripple effect: higher business costs, lower profits, and weaker pension growth. Meanwhile, savers—ordinary workers relying on these pensions—have little say in the matter.

 

The push for net zero assumes a smooth transition to a green economy, but reality is messier. Energy prices spiked in 2022 when renewables couldn’t meet demand, and similar shocks could hit again. L&G’s bet on a flawless green revolution ignores these risks, leaving your pension vulnerable to market volatility and policy failures.

What Can You Do?

If you have a workplace pension with L&G, your retirement is at stake. Here’s how to protect it:

• Check Your Pension: Find out if L&G manages your workplace pension and review its investment strategy. Look for heavy tilts toward green funds or divestment from traditional energy.
• Demand Transparency: Contact your pension provider or employer and ask how net zero policies affect returns. Push for clear answers, not greenwashed platitudes.
• Explore Alternatives: If L&G’s priorities don’t align with yours, consider transferring your pension to a provider focused on returns over ideology. Seek independent financial advice first.
• Speak Up: Engage with L&G directly or through your pension trustee. They’re managing your money—make sure they know returns come first.

Conclusion

Legal & General’s net zero commitment might win applause at climate conferences, but it’s a reckless experiment with your pension. By prioritising emissions targets over financial returns, they’re betting your retirement on a utopian vision that’s far from guaranteed. Divesting from profitable sectors, chasing overhyped green investments, and pressuring companies to prioritise climate over profit could cost savers billions. At the AGM, I saw a company more concerned with its ESG credentials than your financial security. If L&G doesn’t refocus on maximising returns, the dream of net zero could turn your retirement into a nightmare.

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