31 January 2025

Despatch 🔊: Can Rachel Reeves get growth back on track?

By

Alongside CapX’s new weekly podcast The Capitalist, we’ll also be publishing a series of episodes, titled Despatch, which offer an audio version of some of our favourite pieces from the site.

This week, it’s Julian Jessop’s analysis of the Chancellor’s big speech on growth.

It is important to grasp the scale of the challenge in the short term. Growth has ground to a halt. Indeed, the economy is almost certainly back in recession in terms of output per head, and perhaps in terms of overall GDP as well. Either way, the Office for Budget Responsibility’s forecast of 2% growth in 2025, which was baked into the October 2024 Budget, is now for the birds. We will be lucky to achieve half that number, and growth may even be slower this year than last.

.

Rachel Reeves’ decision to back Heathrow expansion neatly illustrates all of these problems. The Blair, Brown and May governments all backed a third runway as well, and yet nothing happened. There is still substantial opposition, including from within the governing party, given the apparent clash with other objectives, And even if the project goes ahead, it will be many years before it has any significant impact on growth.

Listen on Apple Podcasts.

Listen on Spotify.

And please subscribe and leave us a review, it really helps!

Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Marc Sidwell is the editor of CapX.