Bank of England tackles government's economic failure ahead of 'austerity budget'

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The Bank of England has criticized the disastrous mini-budget and failure to boost economic growth since the Covid pandemic, as Jeremy Hunt prepares to unveil new huge new spending cuts and tax hikes.

Ahead of Thursday's historic autumn statement - and after inflation hit a 41-year high of 11.1% - its Governor Andrew Bailey denounced Britain's "damaged reputation" , which he said had aggravated the crisis.

Referring to the vast unfunded Kwasi Kwarteng tax cuts, Mr Bailey said he was told 'we didn't think the UK would do this' at the meeting. fall of the International Monetary Fund.

“It will take longer to rebuild that reputation than to correct the curve in government securities [government borrowing costs]. We have to be careful,' he warned the Commons Treasury Committee.

Mr. Bailey also pointed to a "dramatic" contrast between the UK's dismal recovery from the pandemic and growth in the eurozone and the US, which has left the UK economy still smaller than at the end of 2019.

'I'm afraid that's not a good story,' he told MPs, painting the backdrop of Mr Hunt's search for savings for plugging in a £60billion "black hole" budget, widely seen as marking a return to austerity.

The criticism came before the Chancellor announced up to £35billion sterling in cuts to frontline services, despite warnings that schools, hospitals, councils and courts will be unable to cope.

Taxes will rise, including council tax, with the current freeze on income tax and national insurance thresholds likely to be extended until 2028, causing millions to pay more.

< p> Mr Hunt could seek to argue that the wealthy bear much of the burden, lowering the rate at which the top tax rate of 45 pence between effective in f from £150,000 to £125,000 and increasing the capital gain...