Apart from lifting the idiotic and economically illiterate two-child benefits cap, I found NOTHING praiseworthy in this budget. Reeves had one choice and she refused to make that decision - she had to cut spending.
The UK cannot afford the civil service and there had to be a hiring freeze. There is no way on Planet Earth that the MoD needs 60,000 civil servants and there are no excuses for Universal Credit to cost around £30bn to administer. The NHS does not need ANY call centres and it certainly does not need any quangos, committees and management consultants. It wastes at least £700 per person per year on all that pointless political window dressing.
There was nothing in that budget to boost the economy. Ever-higher taxes dampen economic activity, but there was nothing in that budget to boost anything at all and put money into the pockets of Driver Dave and Forklift Fred and Shelf-Stacker Sheila.
The UK is heading into a financial squeeze that won’t announce itself with a dramatic crash, but with a slow tightening of the screws on household finances. The trigger isn’t one single event, but the convergence of global credit stress, CLO (Collateralised Loan Obligations) failures, collapsing commercial property values, and the end of the yen carry trade - borrow at 0% in Japan, lend in the West) with a domestic housing market already strained by high rates and falling real incomes.
The first impact will be
higher borrowing costs, even if the Bank of England wants to cut. When global credit markets seize, lenders widen margins to protect themselves. So mortgages, car loans and credit cards will stay expensive even as base rates fall. That means the usual relief that households expect during a slowdown simply won’t happen.
Second,
house prices are likely to fall further, driven not by repossessions but by illiquidity: fewer buyers, tougher lending criteria, and elderly sellers clinging to “yesterday’s price”. A 10–20% further decline is likely. Negative equity will rise, reducing mobility and consumer confidence (historically one of the UK’s most important economic drivers).
Third,
pensions and ISAs will take a hit, because UK savers are far more exposed to global equity and credit markets than they realise. A rotation out of AI mega-caps and a shock in CLO markets will flow directly into pension fund valuations. Defined-contribution savers (the majority today) will feel this immediately.
Fourth,
public services will continue to deteriorate. A credit contraction hits tax revenues just as government funding costs rise. With little fiscal room, the response will be spending cuts and stealth taxes. Either way, households pay.
Finally, the job market will soften. Businesses facing higher refinancing costs will freeze hiring, cut investment, and trim hours before cutting staff. Wage growth will fall while prices remain sticky, and that is a quiet form of real-income erosion.
Taken together, this represents the most serious household-level squeeze since 2008, but without the political or financial tools that existed then.
The Political Fallout -
- The government will blame a global recession and lose control of the narrative almost immediately.
- Reeves will lose all credibility.
- The populists will surge.
- The civil service and quangos will become a political target.
- The bond market becomes the real opposition.
- The mainstream media will lose what little credibility it has left.
Economic gravity is about to reassert itself. When it does, the political system will find itself without buffers, without excuses, and without money.
The question is, will the UK go into managed decline, populist rupture, or technocratic takeover?
If the past is our prologue, it will be a managed decline.
