REEVES BLOW AS PRICES RISE AND GROWTH STALLS

IMF offers bleak verdict on UK economy ahead of Chancellor's tax raid Budget

- By Martyn Brown and Jonathan Walker

RACHEL Reeves faced fresh humiliation as UK growth was downgraded and unemployment hit a four-year high.

The Chancellor was accused of "killing growth and crushing jobs" after the International Monetary Fund cut its forecast for next year.

Despite growth this year set to be slightly better than expected, from 1.2% to 1.3%, the prediction for 2026 is downgraded to 1.3%.

It means cumulative growth over the next two years is now expected to be much lower than forecast in October last year, just before Ms Reeves launched her record £40billion Budget tax raid.

Tory leader Kemi Badenoch said the Government's economic failures are "making all of our lives much harder".

And she added that neither the Chancellor or Prime Minister Sir Keir Starmer have the "backbone to do what's needed".

Mrs Badenoch's stark assessment came as the IMF warned prices here are rising even faster than in some developing economies, such as Peru and Senegal, with grocery price inflation back over 5%.

Britain is now expected to see the highest inflation in the G7 over the next two years - averaging 3.4% this year and 2.5% in 2026 whittling away any growth in household incomes.

It is a major blow to Sir Keir's pledge to raise living standards.