What we’ve seen from the government, how businesses have reacted, and what needs to happen next
Setting the tone: stability, investment, and reform
The government's early days were marked by optimism. The Prime Minister declared that the "work of change begins - immediately," and the Chancellor swiftly laid out her three-pillar growth approach. "Stability" came through firm commitments to fiscal rules and pledges not to increase National Insurance, income taxes, or VAT. "Investment" focused on mobilising private capital via initiatives like the National Wealth Fund, guided by recommendations from Mark Carney. "Reform" targeted long-standing barriers, including a proposed overhaul of the National Planning Policy Framework to restore mandatory housing targets. These early priorities signalled a genuine intent to create a pro-growth environment, and businesses took note. The UK Composite Purchasing Managers' Index (PMI) climbed to 52.8 in July 2024, reflecting expanding private sector output. The CBI's Industrial Trends Survey showed a modest rise in output expectations among manufacturers, underlining a business community hopeful for policy-driven growth
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