Chancellor's high tax and cuts 'doom loop' will throttle economy

MORE taxes and spending cuts are set to throttle the economy while inflation remains stubbornly high.

- By Jonathan Walker

Conservatives said the prediction, from global trade body the Organisation of Economic Co-operation and Development, confirmed Rachel Reeves had led Britain into a "high tax, high inflation, low growth doom loop".

The OECD says it expects inflation to be 3.5% across 2025, 0.4 percentage points above its previous forecast, and higher than in any other G7 country. Inflation will fall next year to 2.7%.

But this will leave us with the second highest rate in the G7 behind the US. The Government's target is 2%.

The OECD highlighted the impact of rising food prices, echoing warnings from the British Retail Consortium which said rising employment costs and poor harvests were pushing up checkout bills.

Uncertainty