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The author of the former treasury
Chancellor Rachel Reeves made a clear attempt this week to change the narration on the UK economy and the power of the Starmer government's assistance. This was necessary. Relaxing the negative background mood, after hopes appeared before the elections and immediately after that, after the October budget to one of the repeated disappointment, low expectations and dismay from the clear lack of narration.
The UK has reinforced a period close to economic growth. The budget's business confidence, through concerns about the high revenues of global bonds and the restrictions that these places place on the government's ability to spend, and with them, are borrowed.
In her speech, Reeves admitted the cost of business to increase national insurance – and tried again to explain that she felt that it was necessary to control financial resources. But when it was central to talking about the supply aspect, the image became more hopeful.
Instead of excessive stress on the application management, I think this focus on the offer is correct. First, because a lot of demand will be determined by the Bank of England: If interest rates are reduced by the way many expected, this must be an important engine. So Reeves will not want to take steps to compensate for this possibility – not least because it is likely to help reduce bond returns in the UK.
Second, since the ministers were keen to tell anyone who will listen, the government is bound by its financial rules, which is the first to limit the current spending. If she wants to avoid more tax increase, she will have to adhere to it – or anything close to it.
Third – This is especially important – the UK problem was to the 2008 financial crisis, and before that, it was always aspect of the show. It is our sad productivity and our private and public public investment. Since the crisis, the average weak growth of 1.5 percent has been completely driven by the growth of very strong workforce. Productivity growth remained very weak. If we want to have a stronger growth with our being less likely to inflation, we need more investment and more productivity-this is really simple.
Therefore, Reeves needs to make sure that the government 10 -year infrastructure strategy It is the lead center from now on.
The consultant talked correctly about excessive organization, approval of planning and lack of adherence to growth -enhanced investment projects. It promised to support a large group of projects to address the continuous delay and barriers that prevent infrastructure, including the OX-Cam project, to support a third runway in Heathrow in addition to a number of plans in northern England.
What was missing was the frame. There was no place in her novel for institutions that would be decisive in providing transparent and high investment investments-which is not in reality yet. But this focus will be necessary if the government wants to instill confidence in investors.
Advisors always want to announce large investments that draw attention even if, like Heathrow expandedIt is controversial. Often, though, the new government capital is not accompanied by it and is announced on the basis of “trust for us” in terms of permanent real benefits.
In this, Reeves is not an exception. She referred to the border economy research that indicates that the third runway will have positive complications outside the London region – this should become part of each major initiative. But this must be done systematically, especially since the government will need to monitor its second financial base and borrow for investment. Without such a framework, “Trust us” may not get a positive response from the doctrine or stock market.
The new national infrastructure body will not be established and the service is transformed until April. But this entity, along with the National Bureau of Auditing and others, will be completely essential to encouraging business, inside and outside the United Kingdom, to increase the capabilities of economy growth with investments. I am surprised that the advisor chose not to talk about it: In fact, this will lead to the addition and support of the partition that focuses on growth in the treasury promised by both Reeves and Mr. Kerr Starmer.
In this spirit, I hope that Reeves Nesta can be completely transparent about investment projects that will have positive complications. Because this is also a way to indirectly enhance the demand aspect of the economy, which releases long -term animal lives in business and consumers alike.
