Your July guide to the UK economy, giving you a monthly overview of the major trends impacting the UK's main business sectors.
A new government doesn’t necessarily herald a shift in fiscal policy…
With a new government having now been elected, particularly alongside a change in ruling party, it’s natural to think that we may be on the cusp of a shift in economic policy. But it’s not clear that this will be with case with fiscal policy, at least in the near-term. The incoming Labour government has inherited a difficult fiscal environment, and a weak (albeit improving) economy. While they have signalled a different approach to borrowing from the previous Conservative government (committing to borrowing to invest), Labour have stayed closer to their predecessors on public debt, committing to reducing it as a share of GDP by the fifth year of the Office for Budget Responsibility’s forecast. Spending plans also imply sharp cuts to government spending in unprotected areas, such as prisons, courts and councils, by the end of the decade.
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