Shadow Chancellor Mel Stride has accused Rachel Reeves of making the "wrong decisions" on the economy, warning they will keep "interest rates higher for longer".
Stride told GB News that inflation remains "too high" due to the Government's approach, as official figures show rates increased to 3.6 per cent in June.
Stride stated: "It's too high, and the reason it's too high is the Government's been out there, borrowing and spending vast amounts of money, and that has been stoking inflation.
"And of course, what that means is interest rates being higher for longer."
GB News
|Mel Stride hit out at Chancellor Rachel Reeves's handling of the economy as inflation rates rise
Noting the impact on Britons, Stride added: "Which is obviously going to be felt through people's mortgages, business borrowing costs, and also the servicing costs of our national debt that this Government is ever adding to, which is running at about £100billion a year, which is twice what we spend on defence.
"So the wrong economic decisions leading to higher inflation, I'm afraid."
Stride also criticised the Chancellor Rachel Reeves for creating what he described as "a summer of absolute uncertainty" ahead of the upcoming Budget, suggesting tax rises are inevitable.
"There has been a kind of excessively cautious culture amongst some of the regulators, and we need to get back to the basics of regulation not getting in the way of growth," he said.
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However, he criticised what he saw as a contradiction in the Chancellor's position: "It's all very well to stand up on the Mansion House and say that whilst at the same time, of course, she's put us in a position where we now have very poor and weak public finances."
He concluded: "That is not an environment in which growth occurs, I'm afraid."
When asked what he would do differently, Stride outlined three key alternatives to the current approach, comparing Reeves's decisions to "somebody driving a car into a brick wall at 100 miles an hour, taking the steering wheel and asking me how I'll get out of that".
He said: "I wouldn't have got where we are in the first place, and there are three principal things I would have done differently. One is on the tax and spending side, I would not be borrowing vast sums of money, and I would certainly not have been taxing business, because that's part of the reason why economic growth has been very, very anaemic.
GB News
|Stride said the UK now has 'very poor and weak public finances' as a result of the Chancellor
"Secondly on productivity, that's output per worker, I wouldn't have been going in and giving 14 per cent pay rises to train drivers, 22 per cent to the junior doctors with no strings attached, no requirement for greater efficiencies."
Stride concluded: "And the third thing is welfare, we had shown in Government that we can make serious savings from the welfare bill, £5billion, due to reforms that I put through.
"We had further plans to bring the welfare bill back under control, and if they had done those three things, we would be in a very different position now."