We don’t know much about what taxes she will impose. Nor do we have many clues as to how she will boost growth, or find the money to improve public services. Still, not to worry. It turns out that we can, at least according to her feed on X, trust the shadow chancellor Rachel Reeves to ‘run the economy’ for a very simple reason. She used to work at the Bank of England, and apparently they know about that kind of stuff over there. There is just one problem. In reality the Bank is not as brilliant as Reeves seems to think it is – and it is questionable, to put it mildly, if working for it really qualifies you for anything.
For anyone wondering if the Labour government is likely to improve the UK’s dismal economic outlook, Reeves had some reassuring words this weekend. On her feed on X, formerly Twitter, she posted a clip of herself boasting about her formidable CV. ‘I was an economist at the Bank of England for many years before I became an MP,’ she bragged. ‘I know how to run a successful economy.’
Seriously? In fairness, Reeves is probably familiar with an inflation forecast, and knows what the exchange rate actually means, which may be more than some of her colleagues around Sir Keir Starmer’s cabinet table. And yet, there are two big problems with constantly bragging about her time at the Bank. First, its track record, especially over the past ten years, has been terrible. It pumped too much money into the economy, and cut interest rates too far, allowing inflation to run completely out of control, so that by 2022, prices were rising at 11 per cent, a 41-year-high, and five times the Bank’s legally mandated target. Meanwhile, it failed to regulate the banking system adequately, contributing first to the banking collapse of 2008 and 2009, and then the LTI crisis that hit the insurance companies in 2022. Next, and you would sort of hope its former staff realised this, the Bank does not actually ‘run’ the economy anyway. It is in charge of setting monetary policy to keep inflation on target, which is a slightly different thing, and it is not even very good at that.
In reality, Reeves’s habit of boasting about her CV is becoming increasingly embarrassing. There is an alarming possibility that she actually believes her experience at the Bank means she can ‘run’ the economy better than investors, consumers and companies interacting in a free market can. If so, she is likely to get a rude awakening once she is installed in Number 11 Downing Street – it is just a shame that the rest of the country will have to pay the price for her hubris.
