Talk about UK economy or Farage’s risk, Treasury tells business leaders

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Chancellor Rachel Reeves urged business leaders to start talking about Britain or risk letting Nigel Farage into Downing Street, as the Treasury issued comments from Microsoft boss Brad Smith describing the UK as a “force for stability in an uncertain world”.

UK business leaders told the Financial Times that pressure from Reeves and her team to put forward a positive narrative about the UK economy has intensified in the run-up to the November Budget, when the Chancellor is expected to raise taxes.

They added that the Treasury had warned businessmen that Farage’s right-wing populist Reform Party, which leads in opinion polls, would only benefit from economic gloom.

“We were told that if you wanted to lower the economy that would only help reform, and would you want that as an alternative?” said one business leader.

One CEO said he was at a recent roundtable where Treasury aides explicitly asked leaders to publicly welcome government initiatives that could be seen as supportive of their industry and economy.

One Reeves ally confirmed the message to business: “If you want to join the chorus of talking about Britain, we know where this road leads. It’s not a good place.”

Labor officials claim Farage would undermine institutions such as the Bank of England, lose control of public finances and break up trade deals, including Prime Minister Sir Keir Starmer’s attempt to rebuild trade ties with Europe after Brexit.

Reform did not immediately comment, but the party has been courting business in the past few months, insisting that policies such as cutting government spending and taxes and boosting oil drilling in the North Sea would be welcomed by the corporate world.

Many business leaders have accused Reeves of stalling the economy, particularly with a £25bn increase in employers’ National Insurance contributions and a package of new workplace rights.

They also point out that Reeves herself spoke of the downturn in the economy after she became chancellor, claiming she had to take emergency measures to fill a £22bn financial gap. Starmer and other ministers claimed that aspects of Britain were “broken”.

“Businesses have an absolute right to express concern or concern,” Ally Reeves said. “But they also have a chance to say when things are going well and they agree with us.”

The OECD expects Britain to achieve the second-fastest growth among the G7 in 2025 overall, although the pace slowed during the year, with GDP growing by just 0.2 per cent in the three months to July.

Inflation remained well above the Bank of England’s target of 3.8 percent as of August, weakening households’ purchasing power and reducing the chances of further interest rate cuts.

Business investment rose 3 percent in the second quarter compared to the previous year.

Last week, the Treasury Department engaged in a magic attack on the city and shared videos of its bosses Including Conor Hillery, co-CEO of JPMorgan’s EMEA businesstouting the UK as an “increasingly attractive” place to allocate capital.

“And this, as you know, comes largely off the back of government policies that support growth, pro-business and investment,” he adds in the video, which the Treasury shared on LinkedIn.

Reeves also said on LinkedIn this week that she had met Microsoft’s Smith, saying it showed that the UK “continues to attract the most innovative companies to our shores. We are putting Britain at the forefront.”

The Treasury said on Friday that Smith told Reeves he believed Britain had become a “force for stability in an uncertain world”.

Microsoft said last month that it intends to invest £22 billion over the next four years in the UK. In 2023, Smith publicly denounced the UK competition regulator’s decision to block Microsoft’s acquisition of Activision, Saying The EU was a better place to start a business. The deal was later approved.

Reeves recently bragged of “disposal“The head of the Competition and Market Authority, Markus Bökerinck, was ousted by the government in January.