Economic outlook worsens as wars and tariffs hit the UK

In Liverpool, England, on September 29, 2025, Britain's Chancellor of the Exchequer, Rachel Reeves, addressed concerns over the deteriorating economic situation in the U.K. She highlighted the significant impact of ongoing wars in Ukraine and the Middle East on the national economy. Reeves also cited economic challenges stemming from tariffs imposed by the United States, which have created increased barriers to trade. As a result of these external pressures, the economic outlook has significantly worsened since the Labour Party ascended to power last year, complicating efforts to support public services and manage the cost of living crisis. Reeves faced mounting pressure to clarify her plans for the upcoming autumn budget, scheduled for November 26, and the potential for tax increases. During her speech, she emphasized her determination not to raise taxes on working individuals while also hinting at possible levy increases on employers. The Chancellor acknowledged the need for fiscal strategies that align with Labour's commitment to improve economic conditions while navigating the realities of an increasingly challenging global landscape. During the Labour Party's annual conference, which attracts thousands of party members, Reeves sought to offer a message of economic optimism despite the prevailing high inflation rates and stagnant economic growth. She outlined plans aimed at tackling long-term youth unemployment, particularly addressing the significant number of young people who are currently not engaged in education, work, or training. The initiative promises guaranteed paid work for all individuals under 25 who have been unemployed for 18 months, with the goal of fostering greater productivity within the U.K. While the Labour Party has enjoyed a majority in parliament, concerns have been raised about dwindling public support, particularly due to the rising influence of Nigel Farage's Reform UK party. With Labour lagging behind in opinion polls, discussions at the conference reflected a sense of urgency to reclaim the narrative and address intra-party divisions. Reckoning with threats to Labour's position as the leading opposition, Prime Minister Keir Starmer framed the political landscape as a crucial battle over the U.K.'s future, with Reform UK emerging as the primary competitor for trust and support among voters in the lead-up to the next election.