Reeves looking at regulatory reforms in search for economic growth
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Rachel Reeves will hope for some more economic good news after a difficult start to the year when the latest monthly growth figures are announced on Thursday. The Chancellor acknowledged the UK was facing “economic headwinds” after government borrowing costs increased and the value of the pound slumped.
But the markets appear to have calmed after official figures showed a surprise fall in inflation in December. She will hold a meeting with regulators in No 11 as she attempts to cut red tape and remove barriers to investment to kickstart sluggish growth.
The Office for National Statistics will publish its estimate of November’s gross domestic product on Thursday. The figures will take in the period after Ms Reeves’ first Budget on October 30, which saw her announce £40 billion of tax rises including a hike in employers’ national insurance.
Experts are forecasting official figures will show the economy rebounded in November, with growth of 0.2%. This would mark a welcome recovery from the contraction seen in October, when gross domestic product (GDP) fell by 0.1%. But there are fears that the economy will have stalled overall in the final three months of 2024, following zero growth in the previous three months.
The Bank of England has pencilled in no growth again for the fourth quarter, leading to worries over so-called stagflation, where there is little or no economic growth combined with persistent inflation. While figures on Wednesday showed inflation edging back to 2.5% last month from 2.6% in November, many economists believe it will rise close to 3% in the coming months.
