PM Announces Economic Growth Strategy

The UK government has today unveiled a refreshed economic growth strategy that focuses on increasing capital investment while maintaining fiscal discipline. Chancellor Rachel Reeves stated that the plan will invest more in infrastructure, technology and private-sector productivity before the end of the Parliament.

The strategy is designed to break the cycle of low productivity and slow growth that has characterised the UK economy in recent years. The Treasury emphasised that additional investment can only be delivered if markets are confident that fiscal rules will be strictly adhered to.

One of the key targets is to raise gross fixed-capital formation and boost business investment. The independent forecaster EY ITEM Club recently upgraded its outlook for 2025 GDP growth to 1.5 % from 1.0 %, though it warned of a slowdown to around 0.9 % in 2026, citing weaker business investment and global headwinds.

The strategy also places emphasis on public-private collaboration. The government plans to establish a growth board comprising ministers, business leaders and advisers. This body will oversee delivery of mission-led projects that drive innovation across key sectors including clean energy, digital finance and infrastructure.

On taxes and borrowing the messaging is clear: extra investment must be funded without jeopardising debt-to-GDP targets. The government has signalled that tax rises and spending discipline will play a role, prompting market unease ahead of the Autumn Budget. The weakness of the pound and concerns about growth reflect investor caution.

In terms of timing, the Chancellor indicated that formal budget proposals will be presented on 26 November 2025. These will include measures to stimulate productivity, streamline regulation and channel capital into growth-oriented frameworks. Analysts warn that unless business investment improves and global conditions hold, the UK may face sluggish growth despite the strategy overhaul.

The overarching aim is to transform the UK into a competitive destination for investment and innovation while protecting public services from austerity. Success will depend on execution, regulatory clarity and a rebound in business confidence. For now, markets will watch closely to see whether the rhetoric translates into tangible results.