Is Rachel Reeves the ‘unlucky general’?

Inherited challenges and economic context

My father-in-law likes to call me a ‘lucky general’. Taken from Napoleon’s preference for lucky generals to good ones, it conveys a view that timing can matter more than talent.

The ‘lucky general’ idea has me thinking about the upcoming Budget, specifically whether Chancellor Rachel Reeves is the unluckiest of chancellors, or just not up to the moment. Watching Rachel Reeves prepare for her second Budget, it’s hard to avoid the sense that she couldn’t buy a break.

Reeves inherited an economy that was weak. The many years of underinvestment and drift in key economic competitiveness areas was increasingly clear. While inflation has eased, the scars remain, and food inflation - the inflation element we feel on a weekly basis - has remained exceptionally stubborn. Added to that, debt interest payments have increased and are playing havoc with the Treasury’s fiscal headroom. Growth forecasts from the government’s independent body, the OBR, are anaemic, and productivity hasn’t moved in a decade. That would suggest that the cards are stacked against the Chancellor.

The market’s influence on fiscal decisions

After years of political and economic chaos, her first Budget was pitched as a responsible reset, the sober return of economic grown-ups. But, beyond that, what was it for? The story she’s told of stability, investment and renewal has yet to take shape as a real economic strategy. Businesses aren’t feeling the renewal, and households aren’t feeling the stability.

And perhaps that’s because the Chancellor isn’t really the Chancellor at all. The real power now belongs to the market, that unseen overlord whose moods dictate national policy. Governments no longer fear backbench revolts or public backlash as much as they fear a spike in gilt yields or a drop in sterling. “The market” has become the arbiter of spending decisions.

Reeves knows that better than anyone. The shadow of the 2022 mini-Budget and the bond market revolt that sank it hangs over British politics. Every spending line, every revenue tweak, every borrowing assumption must now be filtered through the question: will the market tolerate it? It is little wonder, then, that Budgets now feel geared towards technical tinkering rather than bold strategies for growth.

Business expectations and Budget outlook

Now, with another Budget looming, the talk is about “hard choices”, political speak for tax rises, spending restraint and very few giveaways. I have even heard mention of this being a “horror Budget”, evoking Denis Healey’s 1975 effort that raised taxes, crushed optimism and branded Labour as managers of decline. The echoes are uncomfortable. Both faced fragile growth, high borrowing costs and the political drag of being seen as technocrats without vision.

Caution may keep Chancellor Reeves out of immediate trouble, but it does seem suffocating. Voters want ambition; investors want ambition, certainty and ease of doing business. We’re far off on all counts. Reeves talks about fixing the foundations but rarely about what will be built on top of them. That isn’t bad luck, this is what happens when you are under constant scrutiny from “the market”.

Implications for Northern Ireland and beyond

For business owners, that matters. Confidence thrives on direction, not just discipline. Investment decisions depend on faith in the future, and that faith is fragile. Firms will be watching this Budget for signs of spark - a credible push on planning reform, innovation incentives, or real action on green infrastructure. Instead, most expect taxes to rise, and yet more blaming of the previous government.

If that’s how it plays out, the question of luck will fade. It won’t be that Reeves can’t catch a break; it’ll be that she’s governing in a system where breaks aren’t allowed. Because when “the market” is the real Chancellor, the scope for novel or ambitious action (ahem… wealth tax… anyone?) is almost impossible.

Either way, the ripple effects don’t stop in Westminster. Northern Ireland’s public finances, investment prospects and infrastructure ambitions remain tethered to decisions made in Westminster, and to the mysterious mood of the market itself. Reeves may be the unlucky general, but her decisions mean we’re all likely to be wading through the economic mire for a while.