London Daily

Focus on the big picture.
Friday, Feb 06, 2026

UK economy made worse by 'own goals' like Brexit and Truss mini-budget, IFS economist says

UK economy made worse by 'own goals' like Brexit and Truss mini-budget, IFS economist says

Paul Johnson, the director of the Institute for Fiscal Studies (IFS), said "we're about to get a lot poorer" due to economic "own goals".
Brexit, slashing investment and Liz Truss's mini-budget are among the "own goals" that have led to the UK's dire financial straits, according to a top economist.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS), has been speaking about what left the UK in a position where yesterday's autumn statement - that will leave more than half of all households worse off - was deemed necessary.

He said: "Let's start with slashing investment spending, that was something announced under the last Labour government and continued by George Osborne.

"Cutting spending on education, particularly huge cuts to vocational and further education, but also to schools over that period."

Mr Johnson added that "very clearly, Brexit was an economic own-goal".

"There may be other reasons for Brexit, but economically speaking that has been very bad news indeed and continues to be bad news, particularly the way that we've done it, the hard type of Brexit we've had, distancing ourselves from the single market," he said.

Mr Johnson also pointed to Ms Truss's tax slashing mini-budget - which inflicted around £30bn worth of damage as it sent the markets into freefall, the value of the pound plummeting, mortgage rates soaring and forced the Bank of England to intervene to stop pension funds collapsing.

"Obviously the mini-budget of a couple of months didn't help. In fact, that was another large own-goal," he said.

While most of the policies of the short-lived Truss administration have now been reversed, Mr Johnson said the political instability of recent months was also not good for the economy.

"There have been three prime ministers and four chancellors in a few months.

"And to be reversing policy here, there and everywhere, to be uncertain about your trading relationship with the rest of Europe, to have corporation tax going up, down and round and round and round, all of that is bad for growth."

The chancellor presented his highly-anticipated autumn statement to parliament on Thursday, littered with stealth taxes and curbs on government spending amounting to £55bn in an attempt to plug the black hole in the public finances.

He sought to blame Russia's invasion of Ukraine for the "global energy crisis, a global inflation crisis and a global economic crisis" and said "we have risen to bigger challenges before".

But Labour has blamed "12 weeks of Conservative chaos" and "12 years of Conservative economic failure" for the bleak outlook.

The independent Office for Budget Responsibility (OBR) warned the disposable incomes of UK households would fall by 7.1% over the next two years - the biggest drop on record.

Mr Johnson warned that this will "hit everyone", adding that "middle England is set for quite a shock".

"The truth is we just got a lot poorer. We are in for a long, hard, unpleasant journey; a journey that has been made more arduous that it might have been by a series of economic own goals," he said.

As a result of Mr Hunt's announcements, the tax burden in the UK will now be at its highest since the Second World War, and there are stark warnings about increased bills and higher unemployment as the recession takes hold - as well as predictions the economy will still shrink 1.4% in 2023.

Speaking to Sky News earlier, the chancellor said it was "a difficult time for everyone" but tax hikes and spending cuts are needed to get the economy "on an even keel".

"Over the next two years it is going to be challenging," he said.

"But I think people want a government that is taking difficult decisions, has a plan that will bring down inflation, stop those big rises in the cost of energy bills and the weekly shop, and at the same time is taking measures to get through this difficult period."
Newsletter

Related Articles

0:00
0:00
Close
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
US and Iran to Begin Nuclear Talks in Oman
Winklevoss-Led Gemini to Slash a Quarter of Jobs and Exit European and Australian Markets
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
China unveils plans for a 'Death Star' capable of launching missile strikes from space
NASA allows astronauts to take smartphones on upcoming missions to capture special moments.
Trump administration to launch TrumpRx.gov for direct drug purchases
Investigation Launched at Winter Olympics Over Ski Jumpers Injecting Hyaluronic Acid
U.S. State Department Issues Urgent Travel Warning for Citizens to Leave Iran Immediately
Wall Street Erases All Gains of 2026; Bitcoin Plummets 14% to $63,000
Epstein Case Documents Reignite Global Scrutiny of Political and Business Elites
Eighty-one-year-old man in the United States fatally shoots Uber driver after scam threat
UK Royal Family Faces Intensifying Strain as Epstein-Linked Revelations Rock the Institution
Political Censorship: French Prosecutors Raid Musk’s X Offices in Paris
AI Invented “Hot Springs” — Tourists Arrived and Were Shocked
Tech Mega-Donors Power Trump-Aligned Fundraising Surge to $429 Million Ahead of 2026 Midterms
UK Pharma Watchdog Rules Sanofi Breached Industry Code With RSV Vaccine Claims Against Pfizer
Melania Documentary Opens Modestly in UK with Mixed Global Box Office Performance
Starmer Arrives in Shanghai to Promote British Trade and Investment
Harry Styles, Anthony Joshua and Premier League Stars Among UK’s Top Taxpayers
New Epstein Files Include Images of Former Prince Andrew Kneeling Over Unidentified Woman
Starmer Urges Former Prince Andrew to Testify Before US Congress About Epstein Ties
Starmer Extends Invitation to Japan’s Prime Minister After Strategic Tokyo Talks
Skupski and Harrison Clinch Australian Open Men’s Doubles Title in Melbourne
DOJ Unveils Millions of Epstein Files, Fueling Global Scrutiny of Elite Networks
France Begins Phasing Out Zoom and Microsoft Teams to Advance Digital Sovereignty
China Lifts Sanctions on British MPs and Peers After Starmer Xi Talks in Beijing
Trump Nominates Kevin Warsh as Fed Chair to Reorient U.S. Monetary Policy Toward Pro-Growth Interest Rates
AstraZeneca Announces £11bn China Investment After Scaling Back UK Expansion Plans
Starmer and Xi Forge Warming UK-China Ties in Beijing Amid Strategic Reset
Tech Market Shifts and AI Investment Surge Drive Global Innovation and Layoffs
Markets Jolt as AI Spending, US Policy Shifts, and Global Security Moves Drive New Volatility
U.S. Signals Potential Decertification of Canadian Aircraft as Bilateral Tensions Escalate
Former South Korean First Lady Kim Keon Hee Sentenced to 20 Months for Bribery
Tesla Ends Model S and X Production and Sends $2 Billion to xAI as 2025 Revenue Declines
China Executes 11 Members of the Ming Clan in Cross-Border Scam Case Linked to Myanmar’s Lawkai
Trump Administration Officials Held Talks With Group Advocating Alberta’s Independence
Starmer Signals UK Push for a More ‘Sophisticated’ Relationship With China in Talks With Xi
Shopping Chatbots Move From Advice to Checkout as Walmart Pushes Faster Than Amazon
Starmer Seeks Economic Gains From China Visit While Navigating US Diplomatic Sensitivities
Starmer Says China Visit Will Deliver Economic Benefits as He Prepares to Meet Xi Jinping
UK Prime Minister Starmer Arrives in China to Bolster Trade and Warn Firms of Strategic Opportunities
The AI Hiring Doom Loop — Algorithmic Recruiting Filters Out Top Talent and Rewards Average or Fake Candidates
Amazon to Cut 16,000 Corporate Jobs After Earlier 14,000 Reduction, Citing Streamlining and AI Investment
Federal Reserve Holds Interest Rate at 3.75% as Powell Faces DOJ Criminal Investigation During 2026 Decision
Putin’s Four-Year Ukraine Invasion Cost: Russia’s Mass Casualty Attrition and the Donbas Security-Guarantee Tradeoff
Wall Street Bets on Strong US Growth and Currency Moves as Dollar Slips After Trump Comments
UK Prime Minister Traveled to China Using Temporary Phones and Laptops to Limit Espionage Risks
Google’s $68 Million Voice Assistant Settlement Exposes Incentives That Reward Over-Collection
×