Despite a flatlining economy, the UK saw a modest 0.1% growth in November. Chancellor Rachel Reeves, facing pressure to stimulate growth and manage public finances, insists she will continue to fight for economic expansion. While inflation easing and resilient wage growth offer some positives, challenges remain, including stagflation fears and potential tax hikes or spending cuts. The government's focus on infrastructure investment and productivity could take years to yield results.
Rachel Reeves – pictured recording a broadcast in Downing Street on Thursday – has insisted she will ‘fight every day’ to deliver economic growth . Rachel Reeves – pictured recording a broadcast in Downing Street on Thursday – has insisted she will ‘fight every day’ to deliver economic growth ., and breathing room in the bond markets. After a difficult start to the year for Rachel Reeves , there are at last a handful of positives to cling on to.of economic recovery would be a dangerous game.
Even after Wednesday’s cooling inflation figures handed Reeves some breathing room, helping to sink the UK’s borrowing costs on the financial markets, the wider increase over the past few months still puts her in danger of breaking her self-imposed fiscal rules. Turning around a flatlining economy is, though, unlikely to happen quickly. The government is prioritising investment in infrastructure and productivity-enhancing projects, as well as planning reform to kickstart a housing revolution. However, while economists broadly agree this is the right thing to do, they also warn it could take years to bear fruit.
The household savings ratio – a measure of disposable income – remains above pre-pandemic levels. After spooking consumers with gloomy rhetoric ahead of the autumn budget, which analysts say continued to weigh on activity in November’s GDP data, a return to confidence this year could help drive up spending.
Economics UK Economy Economic Growth Inflation Rachel Reeves Stagflation Fiscal Policy
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