Rachel Reeves has been handed a "horror show" report card by the Office for Budget Responsibility, which has warned that Labour's string of U-turns has left Britain's finances in a "vulnerable position".
The OBR's fiscal risks and sustainability report this morning explicitly calls out the Government's benefits climbdown and defence spending hike for "creating new pressures on the public finances".
Elsewhere, it projects that debt will rise to a staggering 270 per cent of GDP by the early 2070s.
However, if productivity growth in Britain remains at its current 0.5 per cent rate, the country is on course to hit 647 per cent of GDP by the same time.
Rachel Reeves has been handed a 'horror show'' report card by the Office for Budget Responsibility
TREASURY
"Recent policy commitments create new pressures on the public finances, including the reinstatement of Winter Fuel Payments for some pensioners, the reversal of welfare reforms, and the commitment to further increase defence spending to 3.5 per cent of GDP by 2035," the OBR said.
The office jabs that efforts to correct Britain's public finances have been "met with only limited and temporary success in recent years".
The result, the OBR adds, "has been a substantial erosion of the UK’s capacity to respond to future shocks".
Maxwell Marlow of the free-market Adam Smith Institute think tank said the report was a "horror show" and "emergency level stuff" which proves "the economy needs to be flipped on its head".
READ MORE ON RACHEL REEVES:
Shadow Chancellor Mel Stride issued a scathing swipe at his Cabinet counterpart after the OBR report
PAShadow Chancellor Mel Stride blasted: "While working families are tightening their belts, Labour have lost control of the public finances.
"The OBR's report lays bare the damage: Britain now has the third-highest deficit and the fourth-highest debt burden in Europe, with borrowing costs among the highest in the developed world.
"Under Rachel Reeves's economic mismanagement and Keir Starmer's weak leadership, our public finances have become dangerously exposed - vulnerable to future shocks, welfare spending rising unsustainably, taxes rising to record highs and crippling levels of debt interest.
"Labour's recklessness risks it all - your pension, your job, your home, your savings."
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'Under Rachel Reeves's economic mismanagement and Keir Starmer's weak leadership, our public finances have become dangerously exposed,' Mel Stride fumed
PA
Former Tory Chief Secretary to the Treasury Simon Clarke also warned that Britain now faces "huge structural problems".
The Chancellor, last July, handed the OBR greater oversight over the Treasury, with ministers legally bound to consult it before every major fiscal event as a result.
A Treasury spokesman said: "We recognise the long-standing economic realities the OBR sets out in its report.
"This is why we are committed to ensuring stability in the economy through our non-negotiable fiscal rules, which have allowed us to invest in the UK to drive a decade of renewal and put more money in people's pockets."
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