UK Finance Minister Advocates for Structural Reset to Boost Economic Growth
UK finance minister Rachel Reeves aims to prioritize higher economic growth through structural changes in the finance ministry. Despite setting aside an additional £113 billion for investment, the plan faces challenges from existing fiscal rules and calls for redefining the Treasury's role in driving long-term growth.
Rachel Reeves, the UK's finance minister, emphasizes the need for structural reform in the finance ministry to enhance economic growth, a priority she insists on despite fiscal constraints. Her revised fiscal rules allocate an extra £113 billion for investment, yet a comprehensive plan could still be insufficient for ambitious progress.
The government's recent spending plan includes allocation of funds for defense, housing, and infrastructure, peaking at 3.9% of GDP by 2027/28. However, the deficit in long-term public investment persists, with UK capital spending poised to decline post-peak according to the Office for Budget Responsibility.
Reeves seeks other growth strategies, like easing regulation and boosting investment from British pension funds, amid a tightly controlled fiscal environment. The IMF has echoed the call for a pragmatic approach, while UK's Institute for Government and other stakeholders propose a recalibration in governmental investment mechanisms and the finance ministry's operation to foster sustained growth.
(With inputs from agencies.)
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