Open Editor's Digest for free
Rula Khalaf, editor of the Financial Times, selects her favorite stories in this weekly newsletter.
Prime Minister Sir Keir Starmer on Monday promised to make Britain the “best country partner” for artificial intelligence companies in the world, as he tries to boost the UK's growth prospects against an ominous economic and political backdrop.
Starmer, writing for the Financial Times, will argue that Britain's “values of democracy, open trade and the rule of law” make the UK a natural location for investment by AI companies, and pledge to remove planning restrictions and create “new growth areas for AI”. “.
“I am determined that the UK becomes the best place to start and scale AI businesses,” he writes. “I know that growth in this area cannot be led by the state. But it is certainly the duty of the government to ensure that the right conditions are in place.
Starmer is hoping to return to the top spot after a week in which his economic plans were hurt by markets, which could leave Chancellor Rachel Reeves facing the need to cut spending or raise taxes to keep her fiscal plans on track.
Reeves, who returns from a visit to China on Monday, will this week turn to regulators to ask them to be more ambitious in removing barriers to growth.
Meanwhile, Starmer faces calls from Kemi Badenoch, the Conservative leader, to… Dismissal of his city minister, Tulip Siddiqwhose situation remains precarious after it was implicated in a real estate scandal linked to the ousted government in Bangladesh.
Last week, borrowing costs in Britain rose to Near 16-year high Against a backdrop of steady inflation and fears that Reeves' budget tax hikes had contributed to stagnant growth.
The sense of economic gloom was exacerbated by a Deloitte survey of UK chief financial officers, which showed that business optimism fell to its lowest level in two years in the fourth quarter.
The survey found that a net 26 percent of CFOs reported feeling more pessimistic about their business prospects than they did three months ago, marking the first time sentiment has headed into negative territory since the second quarter of 2023.
Finance chiefs said cost-cutting would be their most likely response to Reeves' £25bn increase in employers' National Insurance contributions.
Deloitte said British companies expect to cut capital spending and discretionary spending and reported the biggest drop in employment expectations since the pandemic. However, the survey found that confidence is well above the lows recorded in 2020 and 2022.
Mel Stride, the shadow chancellor of the chancellor, told the BBC that “business confidence is falling due to the actions taken by the government” and insisted that Reeves should have canceled the programme. Her visit to China To calm the markets.
But one of the Chancellor's advisers said: “Is he seriously saying she should have canceled the trip to stay home over the weekend to address the closed market? The markets would have seen it as a panic.”
One Starmer ally said any suggestion that Reeves' position was under threat was “total nonsense”.
Starmer still believes Reeves' October budget, which sought to stabilize public finances and support public services through a £40bn tax rise, will be justified in the long term, despite market turmoil.
Reeves plans to give her own speech on growth, but it has been postponed until after her trip to the World Economic Forum in Davos later this month.
On Thursday, it will summon eight regulators to explain what they are doing to boost growth. In it House palace speech In November, she told regulators: “The UK was regulating risk, but not growth.”
