Rachel Reeves makes desperate gamble to save her job – we're back to Labour boom and bust!

The UK economy is flatlining on her watch. After shrinking 0.3% in April and 0.1% in May, Reeves now faces a bleak summer of speculation over which taxes she’ll raise next. Despite insisting yesterday that working people will not face fresh tax hikes in her autumn Budget, few believe it.

The last time she said that, she quietly hiked employers’ national insurance, raking in an extra £25billion and hammering jobs in the process. The damage is real. More than 275,000 jobs have disappeared since she entered Number 11, with younger workers suffering most.

Graduate positions are vanishing fast as AI wipes out entry-level roles, and the Chancellor’s tax raid has only made hiring more expensive.

Her hands are tied. State spending is politically untouchable after backbench rebellion over benefit cuts, and she’s pledged to stick by her “non-negotiable” fiscal rules.

Another wave of tax hikes are inevitable. Now she's got another trick up her sleeve and it’s straight out of the Gordon Brown playbook: pump up property prices and deregulate finance.

We’ve seen how that ends.

Reeves wants banks to hand out more high-risk mortgages to young people on lower incomes. Under her so-called Mansion House reforms, unveiled tonight, lenders will be allowed to issue more loans at five or six times salary, in a major loosening of the post-crisis rules.

She also wants tenants’ rental records to count towards affordability checks, and may even scrap the need for a deposit. Labour claims this will unlock 36,000 extra home loans in the next year.

At the same time, Reeves is ripping up red tape in the financial services sector in a bid to make London more “competitive”, language that will ring alarm bells for anyone who remembers 2007.

This is textbook Gordon Brown, New Labour’s original “Iron Chancellor” (who later became a plywood PM). Brown repeatedly claimed to have buried the cycle of what he called “Tory boom and bust”.

He then stoked an almighty banking and property bubble, and blew the proceeds. Brown was running a 3% budget deficit at the height of an economic boom, racking up debt when he should have been paying it down.

When it burst, he left Britain exposed. Brown didn’t cause the global financial crisis, but he made sure Britain was among its biggest victims.

Now Reeves is taking the same mad punt.

Why is she doing this? Because nothing else is working. Her winter fuel cuts triggered howls of protest and an embarrassing U-turn. Her welfare crackdown collapsed.

Her strategy is all over the place. To take just one example, she’s trying to woo the wealthy and big business with “concierge services” while driving out wealthy non-doms and letting rumours of an upcoming wealth tax fly.

It’s like pumping up a leaky tyre and slashing it at the same time.

Sky-high house prices, stagnant wages and a soaring population have locked a generation out of homeownership.

But encouraging people to overstretch themselves with risky loans isn’t the answer. It may give the illusion of progress but if interest rates rise or house prices fall, thousands of young buyers could lose their homes.

And letting the banks off the leash again? That didn’t end well last time. Reeves hopes this gamble will revive the UK and save her job. There will be no boom while her other policies stand. Instead, she's risking another Labour bust.