The UK economy is heading for turbulent times as the Bank of England slashes its growth forecasts and warns of rising inflation, fuelling concerns that Labour’s tax policies will exacerbate the cost of living crisis.
Families and businesses across the country are bracing for impact as the latest figures reveal a grim economic outlook, with sluggish growth, increasing unemployment, and higher costs set to squeeze household finances further.
The Bank of England’s latest report paints a worrying picture:
UK GDP growth forecasts for 2025 have been cut from 1.5% to a mere 0.75%, signalling a significant economic slowdown.
Inflation is set to peak at 3.7% by autumn, nearly double the 2% target, adding to the financial strain on families already grappling with rising costs.
The UK economy contracted by 0.1% in the final quarter of 2024, a stark contrast to previous expectations of growth, raising fears of a prolonged economic slump.
Labour’s National Insurance hike will increase the cost of employing low earners by 5%, forcing businesses to pass on costs through higher prices, job cuts, and wage suppression.
Business confidence has taken a hit, with many firms expected to scale back investment and hiring plans, further exacerbating economic woes.
SNP Economy spokesperson Dave Doogan MP has slammed the Labour government for its handling of the economy, warning that its policies are making a bad situation worse.
“The Bank of England’s forecasts are deeply concerning.
“Under Labour’s leadership, the UK economy is moving in the wrong direction, and families in Scotland will bear the brunt as prices soar, jobs disappear, and wages stagnate,” he said.
He accused Labour of failing to deliver economic stability and warned that their policies were exacerbating the fallout from Brexit.
“It’s hard to believe that Brexit Britain’s broken economy could deteriorate further, but the Labour government has managed it through sheer incompetence,” he added.
With energy bills climbing, inflation rising, and economic growth grinding to a halt, Doogan urged Prime Minister Keir Starmer to take immediate action before households and small businesses are pushed to breaking point.
“The Labour government has boxed itself into this position with a disastrous budget, the damaging National Insurance tax hike, and a stubborn refusal to re-enter the EU single market, costing the economy billions,” he said.
The SNP has repeatedly called for Scotland to have greater control over its economic future, arguing that Westminster’s mismanagement continues to harm Scottish families and businesses.
With confidence in the UK economy dwindling, pressure is mounting on the Labour government to reverse course before the crisis deepens.
For now, millions of families will be left wondering how much more they can endure as the cost of living crisis tightens its grip.
