A shackled economy, no long-term vision for growth — and no help for London

With the string of tax raids announced in the Budget, Rachel Reeves is treating the capital like a cash cow yet again.

- By Jonathan Prynn

First the good news. Rachel Reeves did at least manage to avoid crashing the bond market. Admittedly that is an incredibly low bar. Only one of her predecessors — Kwasi Kwarteng three years ago — has managed to wriggle under it in recent years. The small four basis points fall in 10-year gilt yields at the time of writing immediately after this most chaotic of Budgets means that Reeves can pat herself on the back for one thing. There will be no fiscal crisis this week at least.

Headroom has been bolstered to a bond vigilante defying £22 billion. That should be enough. But this has been an odd Budget, from the ludicrously prolonged lead-in time to the farce of the OBR leak. But far more important than ritual noise around her statement was the almost total absence of a long-term growth vision to fire up the animal spirits of the private sector. That was almost entirely lost in a tortured effort to avoid a Truss 2.0 event through yet another clunking tax raid - while at the same time keeping Burnhamite MPs on board with increased public spending, much of it on higher welfare.

The truth is that once Downing Street bottled the 2p basic rate income tax rise — a move that at a stroke could have made room for so much good stuff — this Budget was doomed to being small-scale in ambition.

Those heady hopes for growth-described in the 2024 manifesto as Labour's "first mission for government" - seem to have wilted as stark reality has kicked in just 18 months after polling day. The British economy has so much going for it: the tech innovation, the AI leadership, the world-leading universities, the creative genius, the City of London's global reputation.