Economic uncertainty seen since the Chancellor's budget continues as analysis suggests an "historic jump" in the number of businesses in financial distress.

Elliott Jordan-Doak of Pantheon Macroeconomics warned the PMI figures show the Bank of England “cannot fully react to slowing growth because price pressures are surging, as firms pass on payroll tax hikes aggressively into prices as well as cutting employment”.

“Rachel Reeves is thinking the right way but she’s in a difficult position,” said a senior UK bank executive in Davos . “Labour in the UK have made a lot of good decisions but it is very hard for them and the [bond market] challenges of last week reinforce that issue.”

UNDER-pressure Rachel Reeves was given a glimmer of hope as inflation fell — raising interest rate cut hopes. The Chancellor saw inflation sink 0.1 per cent to 2.5 per cent in December, the drop

British finance minister Rachel Reeves said on Monday she would meet representatives from key financial services sectors, such as banking and insurance, over the coming months to formulate a new growth and competitiveness strategy.

The disappointing retail data adds to the dim economic picture in the U.K. and to the challenges facing Finance Minister Rachel Reeves.

Truss herself accused the Chancellor of pushing Britain “to the brink of an economic crisis”. Shadow Chancellor Mel Stride said Reeves’ visit to China is “tone deaf” and she should be “reassuring” markets in the UK following turbulence on the gilt markets.

Spare a thought for the Chancellor. She’s going through a tough time. The headlines at the moment are brutal. While Number 10 has now backed her to remain as Chancellor for the rest of the parliament,

The rate of inflation unexpectedly fell slightly to 2.5% in December in a surprise boost to embattled Rachel Reeves ... remains stubbornly above the Bank of England’s target of 2%.

Rachel Reeves may be forced to hike taxes again this year if she is found to have broken her self-imposed fiscal rule.

Falling inflation and borrowing costs are good news for the Chancellor but the Budget watchdog will not make a call on market conditions until next month

Economists believe that the Bank of England’s Monetary Policy ... The figures come after a difficult past couple of weeks for Chancellor Rachel Reeves, after government borrowing costs surged ...