Forecaster says extra spending revealed by Rachel Reeves will give only a short-term lift to economy

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Labour has embarked on a “large, sustained increase in spending, tax and borrowing”, according to the government’s economic forecaster, as it judged that Labour’s first budget for 15 years is unlikely to increase economic growth over the next five years.

Assessing Rachel Reeves’s policies, the Office for Budget Responsibility (OBR) said the economy will expand at the same rate as predicted in March by the end of the parliament, despite a £70bn-a-year rise in spending.