18 November 2025
PRESS RELEASE
C for Chancellor Reeves: Investors hand out mixed grade ahead of crunch Budget
With Rachel Reeves’ second Budget statement around the corner, asset managers have issued their report card for her performance in the role thus far – and according to them she must do better.
Research from Quilter’s latest Investor Trends report, a survey of a group of leading financial institutions representing £22 trillion of assets under management, found that over two thirds (69%) of fund groups awarded the Chancellor a C grade, indicating a mixed performance and that she must improve going forward.
Meanwhile, just over a quarter (25%) have graded her as a D or E, highlighting that some do hold significant concerns. No respondents awarded her with an A, while 6% feel she is doing a good job but still has room for improvement (a B grade).
Investors have questioned the decision making of the Chancellor in the steps she took at the Budget last year and subsequently. One respondent said: “The Chancellor has delivered on some aspects of her programme, most importantly a significant increase in capital investment plans. However, the decision to increase employer national insurance contributions has proven much more problematic.
Meanwhile another wanted to see changes made to welfare spending to highlight the government’s ability to control costs. “Those should have been made quickly while they had the mandate,” they said. “Her credibility is being eroded and making it harder now to make the right choices.”
While the survey was carried out prior to Reeves’ speech in Downing Street at the beginning of November setting the scene ahead of the budget, investors remain split on the potential outcome. Of the respondents, 53% believe she will probably not break the commitment and 47% expect that she will.
Despite the economic troubles at home, investors believe the UK economy is likely to grind on as it has done in the year ahead. Real GDP growth is predicted to be 1.2% in the UK for both 2025 and 2026, while inflation is expected to fall but stay above target. Finally, investors are expecting UK interest rates to be in the range of 3% to 3.5% by the end of next year, indicating a rate cut could be due at December’s Bank of England decision, with two to three more expected in 2026.
Lindsay James, investment strategist at Quilter, said:
“As Rachel Reeves prepares for her second budget statement, the verdict is in from investors – she has delivered a mixed performance and must do better. Her final report card will hinge on the detail of the budget. Up to now, the Chancellor’s choices have been constrained by Labour’s manifesto commitment to ‘not increase taxes on working people’. She appears set to remain steadfast to that commitment, however, raising the question if she can get either spending cuts or broad based tax rises past her own party at all.
“Whichever way the Chancellor decides to go, it is likely to trigger some fiscal volatility for the UK. Investors expect UK economic growth to plateau next year, while inflation is expected to remain above the 2% target. With unemployment climbing and interest rate reductions not as forthcoming as would be expected, it creates of cocktail of economic difficulties that the government will find hard to alleviate.
“The upcoming Budget is a crucial test for this government and one where we will find out if they really mean that economic growth is the priority. Any additional or punitive costs placed on businesses risk stalling investment and expansion at a time where both are desperately needed.”
