Economics expert Liam Halligan has launched a scathing attack on Chancellor Rachel Reeves following her spending review, declaring her "out of her depth" in an interview with GB News.

"She's out of her depth because she's driven above all by ideology and party politics," Halligan said, adding that "she is absolutely petrified of being removed from her post."

The economist warned that Britons face a "long, cruel summer of wondering if the tax axe will fall" as uncertainty grips the economy.

Shadow chancellor Sir Mel Stride echoed these concerns, calling Reeves's plans a "spend-now, tax-later review" and predicting a "cruel summer of speculation" after what he described as months of economic chaos.

Liam Halligan was scathing in his assessment of the Chancellor

The Chancellor unveiled her spending plans in the House of Commons, announcing an additional £29 billion annually for the NHS alongside significant investment in housing and other public services.

Reeves revealed plans to allocate nearly £40 billion for building affordable homes to address the UK's housing crisis, with the announcement made during a visit to a housing development site in Nottinghamshire.

The spending review also included funding increases for defence, schools and transport, with Reeves acknowledging that "too many people in too many parts of our country" were yet to feel the benefits of the change they voted for when Labour came to power.

Despite these spending commitments, Halligan dismissed the review as a "nothing burger," criticising the lack of reassurance for financial markets.

Nigel Farage spoke to Liam Halligan on GB News

Halligan expressed particular alarm about government borrowing costs, noting that gilt yields have exceeded the levels seen during the Liz Truss mini-budget crisis.

"Back in October 2022, at the peak of that Liz Truss mini crisis, the gilt yield, the amount of money the Government must pay to borrow, was about 4.6 per cent at its peak. Panic. End of the world. BBC in meltdown," he explained.

"That yield, the Government borrowing costs, the amount the markets charge the Government, which is all to do with how credible they think the plans are, have been way above that peak for months."

He criticised Reeves for failing to reassure financial markets about controlling public sector spending, warning that "the numbers don't add up at all."

Liam Halligan says he expects Reeves to be ousted

Halligan said “every instinct in Rachel Reeves’s body” will tell her to “keep jacking up taxes”.

He explained: “My concern is Labour is doing things that are ideological rather than things that are rational.

“Faced with a problem in the fiscal accounts, faced with a gap in the public finances, every instinct in Rachel Reeves’s body will tell her to just keep jacking up taxes.

“We’re now at the point where the more you put up tax rates, the less tax revenue you get because you will just kill activity.

“Plus we have the exodus. Last time we saw the figures, it shows 10,800 very rich people had left the country. Those figures are yet to be updated.

“Next year it could be 20,000, the statistic is an incredible number. The top one per cent of earners pay 30 per cent of income tax. A lot of the people we’re talking about who are leaving are those one per cent.

“There’s another kind of 1/10 of one per cent of people who don’t earn income, they earn dividends and wealth. They also account for a massive slug of taxation. Labour, with their sixth form politics, are waving ‘bye bye rich people’.

Halligan suggested that Deputy Prime Minister Angela Rayner might be positioned to replace Reeves as Chancellor, noting that "Big Ange is behind this Employment Rights Bill" and had "deftly leaked her memo about all these tax rises she wanted, enticing the Labour backbenches."

When asked about Reeves's political longevity, he speculated: "I think politics of her own party may oust her soon, but maybe she will stay there to take the flak for tax rises."

"But then she will be replaced by, strap yourself in, someone even more left-wing," he warned.

Halligan also criticised Labour's broader economic approach, stating: "I am generally optimistic about this country but I think Labour is killing enterprise in this country."