Treasury chief says wars and tariffs are harming the UK's economic
outlook
[September 29, 2025] By
JILL LAWLESS
LIVERPOOL, England (AP) — Britain’s Treasury chief warned Monday that
wars in Ukraine and the Middle East and economic headwinds sparked by
U.S. President Donald Trump’s tariffs have worsened the U.K.'s economic
outlook since the governing Labour Party won power last year.
Chancellor of the Exchequer Rachel Reeves is under pressure to say
whether she will raise taxes in her autumn budget on Nov. 26.
“In the last year the world has changed, and we are not immune to that
change," she told the BBC. “Whether it is wars in Europe and the Middle
East, whether it is increased barriers to trade because of tariffs
coming from the United States, whether it is the global cost of
borrowing, we’re not immune to any of those things.”
Reeves hopes to deliver a touch of economic optimism when she addresses
the Labour Party’s annual conference in Liverpool later on Monday.
Since ending 14 years of Conservative rule in July 2024, the Labour
government has struggled to deliver the economic growth it promised.
Inflation remains stubbornly high and the economic outlook subdued,
frustrating efforts to repair tattered public services and ease the cost
of living.
Labour pledged during last year’s election not to raise taxes on working
people, but has since hiked levies on employers, and Reeves has not
ruled out increasing other forms of tax in her budget.
“I’m determined not to increase those key taxes that working people
pay,” Reeves said.
The Treasury said Reeves' speech will include a pledge to end long-term
youth unemployment, and kickstart the U.K.’s sluggish productivity.
Under the plan, everyone under 25 who has been unemployed for 18 months
will be offered guaranteed paid work. One in eight 16–24-year-olds in
Britain — about 1 million people — is currently not in education, work,
or training.
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British Chancellor of the Exchequer Rachel Reeves takes part in the
early morning news rounds during the Labour Party Conference at the
ACC Liverpool, England, Monday Sept. 29, 2025. (Peter Byrne/PA via
AP)
 Thousands of Labour members from
around the country are in Liverpool, in northwest England for the
party conference – a mix of policy forum and pep rally that this
year is lacking in pizazz.
Labour lags behind Nigel Farage ’s hard-right Reform UK party in
opinion polls, and some party members are losing faith in Prime
Minister Keir Starmer – even though there may be four years until
the next election.
Many are rallying around Andy Burnham, the ambitious Labour mayor of
Manchester, who said Sunday that the party is in “peril” and needs
to change direction.
The threat posed by Reform is top issue among Labour delegates at
the four-day conference that ends Wednesday. Farage’s party has only
five lawmakers in the 650 seat House of Commons, and Labour has more
than 400. Nonetheless, Starmer said Reform, and not the main
opposition Conservatives, is now Labour’s chief opponent.
Starmer has described the fight between Labour and Reform as “a
battle for the soul of this country.” On Sunday he accused Farage of
sowing division with plans by Reform to deport immigrants who are in
the U.K. legally. Starmer said such a policy would be “racist” and
“immoral.”
The U.K. government has toughened its own language about
immigration, though. Home Secretary Shabana Mahmood is expected to
announce plans on Monday to raise the bar immigrants must meet to
gain permanent residency. Under the proposals, people will have to
have a “high standard” of English, “a spotless criminal record” and
give back to their communities to get the right to settle in the
U.K.
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