Jeremy Hunt warns Labour could make 'catastrophic' Budget mistakes that hammer growth amid alarm that Rachel Reeves could borrow an extra £60billion and rewrite debt rules to splurge on projects

Shadow chancellor Jeremy Hunt today warned that 'catastrophic' mistakes by Labour at the Budget could hammer UK growth - after the Tories handed them a 'surplus'.

After new sluggish GDP figures Mr Hunt told the Conservative Party Conference that he was concerned that Labour's dour messaging on the economy could put people and businesses off from investing in British firms.

It comes amid fears that Chancellor Rachel Reeves could rewrite fiscal rules she inherited from the Tories to borrow as much as £60billion at the end of the October.

Speaking on the second day of the gathering in Birmingham , Mr Hunt was asked whether he agreed with the Government's belief that the economic picture will worsen before it improves.

He said: 'They will get worse if Labour makes catastrophic mistakes in the budget and hikes up tax in a way that destroys growth.

'I think one of the biggest lies we've had since Labour came to office is this nonsense about having the worst economic inheritance since the Second World War .'

Mr Hunt said no independent economist has supported the Treasury and Government's view on the economic outlook.

He added: 'You don't have to take my word for it, I mean just read this week's Economist where there's an saying that (Reeves) could have actually not have a black hole of £22 billion but a surplus of £39 billion.'

UK economic growth was weaker than thought in the quarter to June, official figures showed today.

GDP expanded by 0.5 per cent over the three months, slightly less than the ONS 's initial estimate of 0.6 per cent.

The manufacturing and construction industries industry were the biggest drag on the headline rate. The news could give both the Bank of England and Chancellor Rachel Reeves pause for thought, as the former considers interest rate cuts and the latter draws up her Budget.

The official figures showed that Brits have been racking up savings at the fastest pace since Covid - potentially a sign of nerves about the prospect for the economy and taxes.

Fears were raised during the election campaign about the burden rising, and since Labour took power in July Keir Starmer and Ms Reeves have been giving stark warnings about pain to come.

Mr Hunt said: 'My worry is that Labour believes its own propaganda and starts taking a whole series of decisions, particularly on things like Capital Gains Tax, which have a massive impact on deterring the investment in the economy that we really need.'

He added: 'Even the Labour Party don't believe it, otherwise we wouldn't be having this massive row over the winter fuel allowance.'

Speaking on the main stage of the Conservative Party Conference, he later said: 'When it comes to the big decisions, we need to secure our economic growth, I think people are beginning to wonder whether Labour actually has a plan at all, because we've had absolutely nothing in the 12 weeks that they've been in office.'