It is the story of the British economy for the last 15 or so years. No matter the ideology of the prime minister, the content of the Budget or the geopolitical conditions, our GDP continues to grow, or indeed shrink, at a snail’s pace.
The UK economy contracted by 0.1 per cent in September, according to the Office for National Statistics, delivering a blow to Rachel Reeves’s plans. Of course, it is important not to place too much stock on a single months’ figures. But GDP grew by just 0.1 per cent – below City expectations – in the third quarter of this year. Meanwhile, the years of robust growth of 2.5 per cent seem like a distant memory.
Labour has made economic growth its top priority. In fact, it has gone further than that, setting out its ambition to make the UK the fastest-growing economy in the G7. It is not immediately obvious what the plan is to achieve that. The Government raised taxes at the Budget and borrowing, to plough money into public services and investment. But long-term growth can only be achieved by politically difficult measures.
This means going big on planning reform, child care, reducing burden on businesses. Boosting economic growth is the only way Labour can afford to put more money into the NHS, education, prisons and the many other parts of the public realm in desperate need of repair. Not least when the market reaction to the additional borrowing, while relatively muted, served as a reminder that the bond markets will pounce if they believe Britain is borrowing unsustainably.
Labour deserves to be judged not on its first set of quarterly economic figures, but on how the economy performs across its entire period in office. But the latest statistics will only underline just how great the challenge is this nation faces: to break away from the era of low investment and low growth. If this Government achieves it, in the face of a volatile Trump administration, it will have made a strong case for its re-election.
