Rachel Reeves has already run out of cash

It was easy to mock it as a piece of political grandstanding. On taking office, the Chancellor Rachel Reeves almost immediately discovered a ‘black hole’ in the public finances, and started warning of tax rises in the autumn. To many of her opponents, it looked like pure opportunism. And yet, now it turns out that she was right. The latest data on public finances show that the British government really is running out of cash. There is just one snag. Everything Reeves’s colleagues are doing will make that even worse, and her threatened tax rises won’t raise anything close to enough money to make the numbers add up. 

The public sector borrowing figures published by the Office for National Statistics today made for dire reading. The government borrowed £3.1 billion during July, the highest figure for that month since 2021, during the pandemic, and the fourth highest July figure since records began.