PROSPECTS FOR THE UK ECONOMY

The March Budget is expected to be focused on ‘levelling up’ income levels across the United Kingdom. • This will require a concerted campaign to raise productivity in the regions after more than a decade of stagnation. • But additional public investment of around £20 billion per year is unlikely to...

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Bibliographic Details
Published in:National Institute economic review 2020-02, Vol.251, p.F4-F34
Main Authors: Hantzsche, Arno, Young, Garry
Format: Article
Language:English
Subjects:
Campaigns
Economic conditions
Economic growth
Economic policy
Employment
EU membership
Free trade
GDP
Gross Domestic Product
Growth rate
Investments
Labor market
Productivity
Prospects
Regions
Stagnation
Standard of living
Trade agreements
Uncertainty
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Summary:The March Budget is expected to be focused on ‘levelling up’ income levels across the United Kingdom. • This will require a concerted campaign to raise productivity in the regions after more than a decade of stagnation. • But additional public investment of around £20 billion per year is unlikely to have more than a modest impact on productivity and is not expected to offset the negative effect of Brexit. • The Chancellor’s aim of raising UK economic growth to around 2¾ per cent a year, though welcome, seems unachievable in the current global economic context. It is not clear that endemic economic uncertainty and incipient trade frictions can be offset very quickly. • The new set of self-imposed fiscal rules may have to be revisited if they are not unnecessarily to constrain growthenhancing public investment.
ISSN:0027-9501
1741-3036
DOI:10.1017/nie.2020.11