Former Bank of England MPC Member Criticizes Government's Economic Management Ahead of Budget 2025
Andy Haldane, a former member of the Bank of England's Monetary Policy Committee with a seven-year tenure, has sharply criticized the government's repeated economic mistakes ahead of Budget 2025. He argues that these errors are holding back the economy and calls for new rules to prevent what he describes as economic self-harm. Haldane advocates for a re-engineered budget process that would be as watertight as Bank of England decisions or subject to open consultation.
Highlighting official data, Haldane points to a 5% unemployment rate—the highest since the COVID-19 pandemic—and Q3 GDP growth at a mere 0.1%, both of which underscore the challenging economic context. He links these figures to fears about potential tax changes, which he says encourage saving, thereby reducing demand and economic growth.
Haldane also criticizes the existing budget process as elongated and leaky, urging for a tighter and more transparent approach. He references recent political developments including Chancellor Jeremy Reeves' October budget speech and Labour leader Keir Starmer's cautious stance on the budget. Additionally, Haldane cites an incident on the preceding Friday where the Chancellor reportedly ruled out an income tax hike that would have broken Labour's manifesto; Treasury sources attribute this U-turn to better-than-expected forecasts by the Office for Budget Responsibility.
