Rachel Reeves has "failed" in her bid for economic growth, the Tories have warned in her final week as Chancellor. New figures show the economy grew by just by 0.1% in May following a 0.1% dip in April. Conservative shadow chancellor Sir Mel Stride said: “Rachel Reeves said growth was her ‘number one mission’. She has failed."

Sir Mel said: "Two years of higher taxes have choked the economy, and now Andy Burnham wants even more taxes to pay for more benefits. Starmer and Reeves may be on their way out but the problem isn’t just the Chancellor, it’s the Labour Party. Different faces, same failed approach."

The meagre gross domestic product rose (GDP) growth in May came after expansion of 0.3% in the all-important services sector, which was partly offset by falls of 0.5% in production and 0.8% in construction, according to the Office for National Statistics (ONS).

The ONS said the Middle East conflict had been flagged by businesses across a raft of sectors for having hit activity.

It comes as Ms Reeves is set to be replaced in the Treasury, with incoming prime minister Andy Burnham expected to announce a new Chancellor.

Speculation over who he will appoint in No 11 has largely centred on Energy Secretary Ed Miliband.

But Home Secretary Shabana Mahmood is now reportedly the favourite for the role, as Mr Burnham continues to dither.

Earlier this week, Ms Reeves insisted Britain’s economy had “beaten the odds” under her stewardship despite taxes heading towards record highs.

In a major speech at Mansion House, she said: “This Government has shown that change, indeed radical change, is possible, and the record of the last two years makes clear that governments can achieve that change only when they combine radicalism with credibility.

“I had to earn that credibility in opposition, and I have proven it in Government in every action that I have taken as Chancellor.”