Rachel Reeves heads to Davos this week to try to salvage her shaky growth ambitions amid the latest evidence that her taxes on jobs are hurting consumers and businesses at home.
The Chancellor will attend the World Economic Forum in the Swiss mountain resort to try to persuade investors and CEOs to pour money into Britain.
Its mission will be to convince them “that Britain is on the rise”, the Treasury said, even after official figures show growth under Labor has stalled and business confidence is eroding.
The Chancellor will attend the meetings in Davos, which formally start this evening, together with Business Minister Jonathan Reynolds and Investment Minister Baroness Gustafsson.
She will be present on Wednesday and Thursday and is expected to meet with Middle Eastern sovereign wealth funds and US private equity investors in a bid to persuade them to invest in major infrastructure and green energy projects.
But in an apparent criticism of Labor, it emerged that no member of Sir Keir Starmer's cabinet is on the main agenda of the five-day event.
It is a far cry from last year when Ms Reeves, as chancellor-in-waiting, visited the summit to set out her vision for Labour's growth plan.
Now that plan is in tatters after the Chancellor's £40 billion tax budget – including a £25 billion National Insurance raid that stunned businesses – and a bond market sell-off that undermined Mrs Reeves' attempts to balance the books to bring, has destroyed.
Chancellor Rachel Reeves (pictured in Davos in January 2023) will attend the World Economic Forum in the Swiss mountain resort to try to persuade investors and CEOs to pour money into Britain
Staff members prepare the plenary room ahead of the World Economic Forum in Davos
Retailers and the hospitality industry are among the worst hit by the NI increase and have warned of price rises across the board. The tax will also have a disincentive to hiring more people, likely to harm employment.
And a new survey from accountants Deloitte today adds to the gloom, showing that consumer confidence stalled in the final quarter of last year for the first time since 2022.
Households seemed to have warnings about cost increases in mind; 80 percent expected prices to rise by 2025.
There was also a fall in sentiment about disposable income and a sharp drop in confidence about the state of the UK economy, while sentiment about job security and employment opportunities also weakened, the poll of 3,200 adults showed.
“Consumer demand is likely to remain subdued as things settle down in the first half of the year,” said Olivier Vernon-Harcourt, head of retail at Deloitte.
It comes after official figures last week showed an unexpected fall in retail sales in Britain in December, raising fears that the economy may have shrunk by the end of 2024.
Reeves (pictured at Davos in January 2023) will be present on Wednesday and Thursday and is expected to meet with sovereign wealth funds rich in Middle Eastern money and US private equity investors in an effort to persuade them to investing in major infrastructure and green infrastructure. energy projects
The Chancellor will attend the meetings in Davos, which formally start this evening, together with Business Secretary Jonathan Reynolds (pictured)
Well-known names including Next and Currys have warned of price rises this year.
They say they need to offset a rise in staff costs due to higher wages and Labour's increase in employers' national insurance contributions.
Companies have also said they will increase the use of robots and are more likely to hire abroad than in Britain.
And Ms Reeves is also under pressure as it emerged that a record number of millionaires have reportedly left Britain since Labor took control over its plans to replace the 'non-stupid' tax regime.
Global analytics firm New World Wealth says Britain lost a net 10,800 millionaires last year – a 157 percent increase from 2023, with a millionaire reportedly leaving the country every 45 minutes since the election.
