The government is “gaslighting” the public about the state of the economy, the shadow chancellor will say on Tuesday.

Rachel Reeves is set to attack the Conservatives in a speech in the City of London, as the opposition takes the fight to the government on their own turf ahead of the general election.

Running a strong economy has long been the focus of Conservative election campaigns.

And with a raft of economic data coming out this week, Ms Reeves will be looking to get ahead of the government’s messaging – saying Chancellor Jeremy Hunt and Prime Minister Rishi Sunak claiming the economy is improving is “deluded”.

The Bank of England will on Thursday make its latest decision on interest rates, with expectations that borrowing costs will be held at 5.25%.

The government wants this rate to come down, but the Bank sets the base rate independently.

There is also quarterly GDP data from the Office for National Statistics (ONS) coming this week, which will likely show the UK coming out of the technical recession it has been in.

Taking the front foot in the wake of the drubbing the Conservatives took in the local elections, Ms Reeves will say: “By the time of the next election, we can, and should, expect interest rates to be cut, Britain to be out of recession and inflation to have returned to the Bank of England’s target.

“Indeed, these things could happen this month.

“I already know what the chancellor will say in response to one or all these events happening. He has been saying it for months now: ‘The economy is turning a corner,’ ‘our plan is working,’ ‘stick with us’.

“I want to take those arguments head on because they do not speak to the economic reality.”

She will add “During the local elections I travelled across the country. I spoke to hundreds of people. I listened to their stories.

“And when they hear government ministers telling them that they have never had it so good, that they should look out for the ‘feelgood factor,’ all they hear is a government that is deluded and completely out of touch with the realities on the ground.

“The Conservatives are gaslighting the British public.”

The shadow chancellor will say Labour will fight the election on the economy, point to previously announced policies such as a national wealth fund to deliver private and public investment, reform planning laws to build 1.5 million homes, and create 650,000 jobs in the UK’s industrial heartlands.

👉 Listen above then tap here to follow Politics at Jack at Sam’s wherever you get your podcasts 👈

Conservative Party chairman Richard Holden said: “The personnel may change but the Labour Party hasn’t. Rachel Reeves still hero-worships Gordon Brown, who sold off our gold reserves and whose hubris took Britain to the brink of financial collapse.

“Labour have no plan and would take us back to square one with higher taxes, higher unemployment, an illegal amnesty on immigration and a plot to betray pensioners, just like Gordon Brown did.”

An estate agency group backed by the private equity arm of Lloyds Banking Group is being put up for sale in the latest sign of corporate activity in the sector.

Sky News understands that LDC has hired bankers from Clearwater International to oversee a sale of Lomond Group.

A process is expected to kick off in the coming months, and should value Lomond at well over £100m, according to industry sources.

Lomond Group was created from the merger of Lomond Capital and Linley & Simpson in 2021, a deal which established a business with 22,000 properties under management.

The company has a particularly prominent presence in cities such as Aberdeen, Birmingham and Leeds.

It trades under brands such as Thornley Groves, Braemore and John Shepherd.

The prospective auction comes as speculation grows about a potential bid for Foxtons, the London-listed estate agent.

Foxtons was recently reported to have added bankers at Rothschild as financial advisers in anticipation of a bid.

A number of other chains are also expected to change hands in the coming months.

A spokesman for LDC declined to comment.

The world’s second-largest steel company has warned the government that a planning verdict due this week could lead to a key division quitting the UK.

Sky News has seen a letter sent by ArcelorMittal to Michael Gove, the levelling-up secretary, in which it says that a decision to allow the closure and redevelopment of part of Chatham Docks would have “seismic adverse consequences… [for] the British economy and multiple strategic industries”.

In the letter from Matthew Brooks, who runs ArcelorMittal’s construction solutions arm in the UK, the company urges Mr Gove to issue an urgent order to allow fuller government scrutiny of the redevelopment proposals ahead of Wednesday’s decision by Medway Council.

“This is highly time-sensitive – calling in the application after next Wednesday will not be possible,” Mr Brooks wrote.

He warned that if the proposals were approved, ArcelorMittal would “regrettably be left with no alternative but to leave Chatham Docks and, more than likely, cease operations in Britain, given the lack of suitable alternative sites”.

“This, too, would likely be the case for the majority of businesses at the Docks,” Mr Brooks wrote.

“This would have a significant impact on Britain’s manufacturing and construction industries, delay countless critical national infrastructure projects, come at a significant cost to the economy, and leave Britain vulnerable and exposed to the volatility of international supply chain shocks.”

The application, submitted by Peel Waters, part of the industrial conglomerate Peel Group, would see the site used to build housing and commercial facilities in place of part of the docks.

It has already been recommended for approval by local planning officers, according to reports last week.

ArcelorMittal uses the site in Kent to transport materials produced by its construction materials arm.

If the application was approved, it warned, it would “spell the end of Chatham Docks and have a significant impact on the UK reinforcement industry, leading to serious, potentially irreversible long-term harm, with immediate consequences for the resilience and carbon intensity of the sector”.

ArcelorMittal, which has operations in more than 60 countries, is an integrated steel and mining company, serving the automotive, construction, household appliances and packaging industries.

The company, which is based in Luxembourg, is chaired by Lakshmi Mittal, the Indian businessman.

It is a significant supplier of steels in Britain, and has been involved in construction projects such as Wembley Stadium, Crossrail and the O2 arena in southeast London.

“Our concern is that Peel’s application to redevelop Chatham Docks is not only wrong for Britain but has proceeded with little scrutiny and a lack of public awareness,” Mr Gove was told in the letter.

“Many key stakeholders are therefore unaware of the consequences if it were to proceed.

“As the largest operator in the Docks, we of course believe that the application should be rejected.

“However, our sole request today is for an Article 31 holding direction so you can secure the time to assess whether to call in this application for consideration at the national level.”

According to ArcelorMittal, Chatham Docks – which it described as “a 400-year-old thriving commercial port with a proud naval heritage” – employs nearly 800 people and generates economic value equivalent to £112,000 per worker, which it argued was “considerably higher than the Medway average of £63,900”.

“This is in direct contrast to proposals put forward by Peel, whose economic proposition is unclear,” Mr Brooks wrote.

He added that the redevelopment plan would spell the end for £20m of new investment with the potential to create nearly 2,000 jobs.

“However, none of this can be realised while there is uncertainty about the future of our lease on Chatham Docks,” Mr Brooks warned, adding that £5m of investment had “already been delayed by Peel’s application”.

Peel Waters could not be reached for comment on Sunday.