Rachel Reeves accuses Tories of ‘gaslighting’ public over economy

Tory plotters had warned that a poor set of results could be a moment of high peril for Sunak, yet rebels laid down arms after admitting they had not persuaded enough MPs to join them to force a vote of no confidence in his leadership.

The prime minister said he was “absolutely determined” to fight on in the run-up to polling day, expected this autumn, to show that the government was making a difference on issues including the economy, citing tax cuts and falling inflation.

In a speech in the City of London, Reeves will argue that Sunak’s message to voters that the economy is improving is “deluded”, ahead of the release of a raft of economic data that the government hopes will help reverse its fortunes.

Labour plans to fight the election on the economy, believing that the government’s response to global pressures and Liz Truss’s disastrous mini-budget have destroyed the Tories’ reputation for economic competence, while Keir Starmer’s party now offers a more stable alternative.

Labour has sought inspiration from Joe Biden’s plan to tackle inflation and create jobs in the US, as well as a bigger role for government in running the free-market economy, with a focus on supply-side reforms and green industrial strategy.

The Liberal Democrat leader, Ed Davey, will seek to put pressure on Sunak to call a June general election by tabling a motion of no confidence in the government when parliament returns on Tuesday, although this has no chance of passing.