UK stuck in ‘Tory doom loop’ of emergency budgets, Labour says

Chancellor expected to unveil cuts and tax rises following Liz Truss failure

The British economy is stuck in a "doom loop" of emergency Conservative budgets, Labour has said – as Jeremy Hunt prepares to give his autumn statement.

Mr Hunt is expected to enact significant tax rises and spending cuts, which he says will restore economic "stability".

It comes just weeks after Liz Truss and Kwasi Kwarteng unveiled huge unfunded tax cuts, which sent financial markets haywire and led to Ms Truss's resignation as prime minister.

In a video released on Thursday morning ahead of the statement Chancellor Jeremy Hunt says he would be taking "some difficult decisions to restore stability, bring inflation down and balance the nation's books".

But Pat McFadden, shadow chief secretary to the Treasury, said the UK was stuck in a "Conservative doom loop of emergency statements" and that Mr Hunt should begin his autumn statement today by "taking responsibility".

"I think he should acknowledge their responsibility for what's happened. I don't think he should pretend the mini-budget was just a bad dream," he said.

The Labour MP said the Chancellor would have to "overcompensate" for the mistakes of of Ms Truss's administration and suggested he would be "desperate to blame global factors" for the UK's poor economic outlook.

On Wednesday the Bank of England governor Andrew Bailey described the UK's economic record in recent years as "not a good story" and said its performance was dramatically behind that of the US and eurozone.

Speaking on Sky News, Labour's Mr McFadden said the party would be introducing a green investment plan funded "in part by borrowing".

He said this was different to "borrowing for unfunded tax cuts" and for "investments that will have a return for the future of the country".

Mr Hunt is expected to freeze tax thresholds, bringing more people into higher bands – and possibly lower the level at which the top 45p rate is paid.

But around half of the savings are expected to come from cut to public spending, with many public services already seriously stretched thanks to the last round of austerity.