A former Bank of England chief economist has told Sky News that “repeated mistakes” by the government have been “sucking all life” from the economy ahead of the budget.

Andy Haldane said the country had to find a new way of treating the build-up to the annual fiscal event, as budget rumour and speculation – initiated in part by ministers and via leaks – had fed acts of self-harm for the past two years.

“It’s been a bad hand played, in truth, pretty poorly,” he said of the chancellor’s stewardship during his appearance on Mornings with Ridge and Frost.

“So mistakes have been made and repeated mistakes. And the worst of that, I would say, is it’s repeated mistakes.”

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The build up to this budget, and Rachel Reeves‘s first speech last October, have each been dominated by talk of crisis for the public finances.

Mr Haldane told Sophy Ridge: “The black hole narrative that you and I discussed a year ago, sucking all life or energy and light from the economy, has been a mistake repeated this time as well.

“So not enough has been done to give growth a chance to create that stability. It’s only 16 months since Keir Starmer said I want to tread more lightly on our lives. That has singularly not happened. That speculation is proof positive of that.”

Mr Haldane, who served on the Bank’s rate-setting committee for seven years, was speaking after official figures last week showed a bigger than expected climb in the UK’s unemployment rate to 5% – a level not seen since the COVID pandemic.

The Office for National Statistics (ONS) also reported weaker than forecast economic growth during the third quarter of the year, slowing to 0.1%.

He argued there was a clear link between the data and the looming budget, which takes place next week.

“If you speak to businesses, speak to consumers, their fearfulness about where the axe will fall is causing them, not unreasonably, to save rather than spend, to not put their balance sheet to work and that has taken the legs from beneath growth in the economy,” he said.

Asked if that was the government’s fault or inevitable, he replied: “The process has become far too elongated and far too leaky, to be honest.

“You know, we have this pretty much daily speculation about the next tax rise… we need to re-engineer that process to either make it watertight, like the Bank of England’s monetary policy decisions or a genuinely open consultation.

“Right now, we have this halfway house of leaks and speculation which serves absolutely no one. Least of all the economy.”

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He made his remarks after the events of last Friday that saw the chancellor apparently rule out a Labour manifesto-breaking hike to income tax.

That was despite Ms Reeves using a speech earlier this month to prepare the ground for such a move – to the horror of many Labour MPs.

Treasury sources insisted the U-turn could be explained by better than expected economic forecasts by the Office for Budget Responsibility (OBR).

The cobbled streets of Newport in Middlesbrough survive from the Victorian era.

The staggering levels of child poverty here also feel like they belong in a different time.

Six out of every seven children in Newport are classified as living in poverty.

The measure is defined by the Child Poverty Action Group as a household with an income less than 60% of the national average.

More than half of children across the whole of the constituency of Middlesbrough and Thornaby East are growing up in poverty.

As a long-awaited new strategy on child poverty is expected from the government, much of the focus on tackling the problem has been placed on lifting the two-child cap on benefits for families.

Researchers say there is direct link between areas with the highest rates of child poverty and those with the highest proportion of children affected by that two-child cap.

Mother-of-three Gemma Grafton said: “Maybe if families do have more than two children, give them that little bit of extra help because it would make a difference.”

Three months ago, she and partner Lee welcomed baby Ivie into the world. With two daughters already, the cap means they receive no additional universal credit.

“You don’t seem to have enough money some months to cover the basics,” said Lee.

“Having to tell the kids to take it easy, that’s not nice, when they’re just wanting to help themselves to get what they want and we’ve got to say ‘Try and calm down on what you’re eating’ because we haven’t got the money to go and get shopping in,” added Gemma.

The couple had to resort to paying half of the rent one month, something they say is stressful and puts their home at risk.

Those who work in the area of child poverty say they are engaged in a battle with child exploitation gangs who will happily step in and offer children a lucrative life of crime.

“Parents are crying that they’re failing because they can’t provide for their children,” said Tracey Godfrey-Harrison, project manager at the Middlesbrough Food Bank.

“In today’s society, it’s disgraceful that anyone should have to cry because they don’t have enough.”

In the shadow of a former steelworks, Dormanstown Primary Academy serves pupils in a community hit hard by the economic collapse that followed.

The school works with charities and businesses to increase opportunities for pupils now and in the future.

Katrina Morley, the academy’s chief executive, said: “A child who hasn’t been able to sleep properly can’t concentrate. They’re tired. We know that the brain doesn’t work in the same way. A child who is hungry can’t access the whole of life.

“When you face hardship, it affects not just your physiology but your emotional sense, your brain development, your sense of worth. They don’t get today back and their tomorrow is our tomorrow.”

The school’s year six pupils see the value of things like the on-site farm shop for families in need.

They are open about their own worries, too.

Bonnie, 10, said: “I think that’s very important because it ensures all the people in our community have options if they’re struggling.

“It can be life-changing for families in poverty or who have a disadvantage in life because they don’t have enough money and they’re really struggling to get their necessities.”

Mark, also 10, said: “I worry about if we have nowhere to live and if we haven’t got enough money to pay for our home. But at least we have our family.”

They also see the homelessness in the area as the impact of poverty. “I think it actually happens more often than most people think,” said Leo, “because near the town, there’s people on the streets and they have nowhere to go.”

The school is one of many calling for the lifting of the two-child cap.

The need for life’s essentials has prompted more than 50 families to register for help at Barney’s Baby Bank in the last 11 months. Nappies, wipes, clothing, shoes, toys, are a lifeline for those who call in.

Founder Debbie Smith said local people “are struggling with food. They’re obviously struggling to clothe their babies as well. It’s low wages, high unemployment, job insecurity and that two-child benefit cap”.

“Middlesbrough does feel ignored,” she added.

A government spokesperson said: “Every child, no matter their background, deserves the best start in life. That’s why our Child Poverty Taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty.

“We are investing £500m in children’s development through the rollout of Best Start Family Hubs, extending free school meals and ensuring the poorest don’t go hungry in the holidays through a new £1bn crisis support package.”

Read more on Sky News:
Progress ‘being made’ on poverty
Warning over ‘great poverty distraction’

But what is the message to those making the decisions from the North East?

“Come and do my job for a week and see the need and the desperation the people are in,” said Ms Godfrey-Harrison. “There needs to be more done for people in Middlesbrough.”

The restructuring firm drafted in to advise Sir Jim Ratcliffe on a radical cost-cutting programme at Manchester United Football Club will this week be put up for sale with a £900m price tag.

Sky News has learnt that advisers to HIG Europe, the majority shareholder in Interpath Advisory, will on Monday begin circulating information about the business to potential buyers.

City insiders said on Sunday that HIG had received a large volume of inbound enquiries from prospective suitors since it emerged that it was in the process of appointing bankers at Moelis to handle an auction.

Blackstone, Bridgepoint, Onex, PAI Partners and Permira are among the buyout firms expected to show an interest in buying Interpath, according to banking sources.

Interpath was spun out of KPMG UK in 2021 in a deal triggered by the changing regulatory climate in the audit profession.

Growing concerns over conflicts of interest between accountancy giants’ audit and consulting arms had been exacerbated by the collapse of companies such as BHS and Carillion, prompting a number of disposals by ‘big four’ firms.

Interpath has advised on a string of prominent restructuring and cost-saving mandates for clients, including acting as administrator to the UK and Ireland subsidiaries of Claire’s, the accessories retailer which collapsed during the summer.

Sources said that Interpath had doubled its earnings before interest, tax, depreciation and amortisation since HIG Europe acquired the business four-and-a-half years ago.

It is also said to be on track to record a 20% increase in annual revenues in the current financial year.

A sale of Interpath is expected to be agreed during the first quarter of 2026.

HIG declined to comment.