Rachel Reeves set to hit UK financial system with ‘double debt mountain’ in 15 hours | Politics | News | EUROtoday

Rachel Reeves dangers “squeezing the British economy to death” together with her tax-and-spend agenda, a monetary knowledgeable has warned forward of tomorrow’s high-stakes spending assessment. The Chancellor’s plans, in line with tax advisor Bob Lyddon, founding father of Lyddon Consulting Services, danger making a “double debt mountain” — a visual authorities debt and a hidden, rising legal responsibility inside state-backed schemes that can in the end burden British companies and households.

Mr Lyddon advised the Express: “Rachel Reeves has squeezed herself. The only question is whether she is going to squeeze the British economy to death before financial markets stop her.” Since taking workplace, Ms Reeves, who is ready to ship her assertion within the Commons at 12.30pm on Wednesday, has confronted mounting stress over the hole between her rhetoric and outcomes. Her October Budget promised to boost important funds from VAT on personal college charges and a crackdown on non-doms — however each insurance policies have run into authorized and technical obstacles and are but to ship the anticipated income.

The financial influence is already being felt, with rising unemployment and falling job vacancies fuelling fears that Ms Reeves’ strategy is starting to choke off development.

Mr Lyddon claimed: “The only ‘growth’ in the economy is in activities like hospital services, social work, and sewage disposal, enabled by increased public borrowing.

“That ‘growth’ fiddles with the numbers but does not produce taxes for the Government or wealth for the nation.

“The only things that stick with Ms Reeves are spending increases, tax increases, and higher public sector pay and job numbers.

“Any spending moderations she will announce under her Spending Review will be illusory, and will in due course be reversed.”

Spending on day-to-day costs will continue to go up, borrowing to meet those costs will go up, and government ‘investment’ spending will also rise — along with borrowing to fund it, the expert believes.

Mr Lyddon said: “Even the government’s own borrowing for investment will not be the total amount borrowed for the government’s schemes, be they for Net Zero, roads, bridges, or whatever.”

The balance, he went on, “will be borrowed from private pension funds, BlackRock” or others.

He added: “The upshot will be a double debt mountain: the Everest you can see and the K2 hidden inside these schemes, and both being repayable by hapless British businesses and individuals.”

The Chancellor has already faced a high-profile retreat this week after backtracking on plans to means-test winter fuel payments, following an outcry from pensioners and MPs.

She is also under growing pressure to reverse proposed reforms to agricultural inheritance tax reliefs, which have angered farmers and triggered a backlash from rural Conservative MPs.

Ms Reeves has positioned herself as a safe pair of hands capable of reassuring markets and restoring confidence after years of turbulence. However, recent data suggests her policies may be having the opposite effect, weakening confidence without delivering meaningful growth.

City analysts warn that if borrowing continues to rise while tax receipts disappoint, the UK could face a repeat of past fiscal crises — particularly if global interest rates remain high. Some have even suggested that only a major financial crash will force a rethink, although few in Government are willing to acknowledge that possibility.

Mr Lyddon stated: “This will only come to an end — and Britain will only escape the worst long-term damage from the heedless incompetents currently in power — if we experience a major financial crash before the end of the summer.”

Tomorrow’s Spending Review is expected to set out multi-year departmental budgets alongside revised projections for borrowing and growth. Ms Reeves has insisted the plans will be fully costed and transparent and pledged not to return to the days of “fantasy economics.”

But Mr Lyddon stated the numbers don’t add up. He added: “This isn’t growth, it’s an illusion built on borrowing. Eventually, someone has to pay — and it won’t be the Government.”