It is rare for a Prime Minister to brief the press on bad news he intends to do nothing about. That is exactly what Sir Keir Starmer did this week, warning that UK inflation could spike above 6 per cent by the second half of the year as Middle East oil disruption feeds through to British petrol pumps and electricity bills. The OECD followed up by raising its 2026 UK inflation forecast from 2.5 per cent to 4 per cent, and cutting its UK growth forecast from 1.2 per cent to 0.7 per cent.

The Bank of England's "Transitory" Trap

This is the second time in five years a British government has been caught on the hop by an external energy shock. In 2022 the Bank of England spent months telling us inflation was "transitory" while it ran towards double figures. The Bank is now repeating the trick. The MPC has held rates while signalling that the inflation peak will be brief and shallow. The MPC said exactly the same thing in October 2021, two months before inflation began its sprint to 11.1 per cent.

The truth is that the British economy is now structurally exposed to energy price shocks in a way that comparable economies are not. We have closed reliable domestic generation. We have run down North Sea production. We have refused to develop shale. We import most of our gas at international spot prices and then layer green levies on top. When the world catches a cold, British households catch pneumonia.

Frozen Thresholds — The Stealth Tax That Keeps Giving

While inflation rises, tax thresholds stay frozen. The personal allowance is now frozen until 2031. Every pay rise that workers receive — including the rise in the minimum wage — is being silently clawed back by the Treasury through fiscal drag. Higher-rate taxpayer numbers have surged to historic highs not because anyone got rich, but because £50,270 is no longer remotely a high salary.

Rachel Reeves likes to point out that she has not raised the headline rates of income tax. She is being slippery. Frozen thresholds during a 4 per cent inflation environment are a 4 per cent tax rise on every working person in the country, every year, compounded. It is the largest stealth tax raid in peacetime British history, and it is being delivered by a Chancellor who promised "no return to austerity."

HMRC Goes After 700,000 People

At the same time, HMRC has announced it is pursuing up to 700,000 individuals linked to historic tax avoidance schemes — many of them ordinary contractors and freelancers who were sold loan-charge arrangements by accountants they trusted. Family businesses, meanwhile, are bracing for inheritance tax changes that will force the sale of working farms and small manufacturers to settle bills with the Treasury.

The signal could not be clearer. Labour has decided that the productive part of the British economy is to be milked, not nurtured. Anyone who built something, saved something or inherited something is now a target. Anyone who took a state cheque is to be protected. This is not a strategy for growth. It is a strategy for managed decline, with a moral framing.

What Reform UK Would Do

Reform UK's economic platform begins with a single, achievable promise: raise the income tax personal allowance to £20,000. That alone would lift millions of people out of income tax altogether and put hundreds of pounds a month back into the pockets of working families. It would be paid for by stopping the asylum hotel bill, scrapping the net zero department, ending the foreign aid budget in its current form, and trimming the consultancy gravy train that infests every Whitehall department.

We would also raise the threshold at which inheritance tax bites, end the loan-charge persecution of self-employed contractors, and reverse the family farm tax raid. None of this is utopian. It is what a normal, competent country would do. Britain has not had a normal, competent government for some time. The polling tells you the public has noticed.