Why Rachel Reeves is on the brink of exit and with any luck Starmer will follow - Kelvin MacKenzie

Reeves Budget was an economic disaster and although she and Starmer talked about growth the fact she took £25billion out of business - the only vehicle which can supply growth - meant it could never happen.

It was a shocking misjudgement. Strangely it took a time for foreign investors to take on board the peril the UK was in. Now they understand it all too clearly and are taking revenge on Reeves and that Budget.

To borrow money to keep the UK afloat she will have to pay 5.21%, higher than the rates that cost Truss her job and the highest for 27 years.

This may sound all rather dull until you realise that our debt is 100% of GDP and the slightest movement means money that we thought would go on better roads, more police, an increased standard of living, disappears out the window.

In her Budget, Reeves forecast that there would be around £9billion of headroom. That has disappeared. In turn the pound fell to its lowest value against the dollar in eight years. It’s all gloom.

The reality is that every financier is putting their spare cash into the United States. The last place you would invest is the UK where the only people driving round in Rolls Royces are train drivers.

Now Reeves has to decide in the Spring whether she will put up taxes or cut government spending. Starmer will then have to decide whether to keep her. His problem is that his MPs are to the Left of him and they will love the idea of heavier taxes on the wealthy whereas they will hate the spending cuts.

But Reeves promised she wouldn’t raise taxes. Said it would break her unbreakable fiscal ‘’rules’’. So something has to go – and hopefully it will be her.

The reality is that there’s even more bad news coming down the line. Trump has made clear he is going to impose tariffs. Neither he or his soul mate Elon Musk have a good word for Socialism. They like the Brits but hate the politics. Don’t blame them.

The effect of tariffs on the UK which has been living beyond its means for decades – our welfare bill is completely out of control where millions are subsidised every day by the taxpayer- will mean more economic pain.

All this would have been bad enough under the Tories I find it hard to envisage how bad it will be under Labour. Reeves will have to pay the price. She was never prepared for the backlash against the Budget.

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She never understood you can’t just impose massive taxes on the nation without there being a push back. My issue is who follows Reeves and possibly Starmer. They were a thin offering back in July. Who else is there? Lammy? Is this a joke? Rayner? Hates the wealthy, unless they buy her a frock. Coopper? She looks knackered now.

The best thing that could happen is an early General Election and we could throw them out. It’s our only hope. We can’t have four more years of this.