Macroeconomic Context

Key points

• The United Kingdom's economy has been marred by low growth and flatlining productivity by historical and international standards.
• We project that the growth rate of output and productivity will recover modestly to around 1 per cent per year for remainder of the decade.
• A revised fiscal framework is vital for fostering sustained economic growth.
• Revitalising the UK economy and boosting living standards will depend on supply-side reforms such as raising public investment in key areas like healthcare, infrastructure and housing, as well as helping unlock greater business investment.
• Integrating public sector net worth as a fiscal target can help incentivise higher public investment, which in turn will improve UK growth prospects in the next parliament and beyond.

Funders