Reeves looking at regulatory reforms in search for economic growth

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.

Ms Reeves and Business Secretary Jonathan Reynolds will meet the bosses of the Competition and Markets Authority, Ofcom, Ofwat, Ofgem, the Office of Rail and Road, the Environment Agency and the Civil Aviation Authority in No 11 on Thursday to look at reforms to the way they work.

The Chancellor said: “Growth is the number one mission of this Government so we can put more money in people’s pockets and help fund our public services.

“The economic headwinds we face show the importance of pressing ahead with our programme of reform to kickstart economic growth.

“But that can only happen if we tackle the barriers to investment and deliver the necessary reforms to make Britain the best place to do business.

“That includes looking at regulation across the piece and doing what is necessary to reform it.

“That is the challenge the Prime Minister set regulators last year and today’s meeting will be about taking this agenda forward because we expect every regulator, in whatever sector, to get on board.”

Meanwhile, Nissan and the Japan Automatic Transmission Company (JATCO) announced a £50 million investment deal in partnership with the government to create a new manufacturing plant in Sunderland producing powertrains for the car giant’s electric vehicles.

The deal involved £12 million of taxpayer funding through the automotive transformation fund.

The Business Secretary said: “Not only will this boost our thriving auto industry, but it will help secure hundreds of jobs across the North East.”

Published: 16/01/2025 by Radio NewsHub