[Infographic] ECONOMIC UPDATE SEPTEMBER 2024

The UK economy under the Labour government faces considerable challenges, marked by low productivity and deteriorating public services. Labour has responded with major policy initiatives, including a £9.5 billion commitment to public sector wage increases, funded through cuts to capital projects and means-tested benefits like the winter fuel allowance. Economic growth remains a challenge. Contrary to popular belief, higher taxes don’t necessarily stifle growth; rather, the UK’s real GDP growth is limited to 1.8% due to underinvestment.

Labour aims to overcome these challenges with its ambitious housebuilding target of 2.5 million homes on “grey belt” land near urban centers, though a shortage of skilled tradesmen may slow progress. Over the next five years, the UK’s economy is projected to grow at 1.8% annually, contingent on addressing underinvestment and Brexit-related disruptions.

Globally, China is experiencing a slowdown, with retail and investment growth at 2-3%, while the US faces political risks that may lead to a recession. In the EU, Germany’s struggling manufacturing sector poses a concern, but Spain and the Netherlands show stronger growth. By the end of 2024, the UK’s real GDP is expected to grow by 1.5%, with inflation at 2.9% and house prices rising by 4%, supported by wage growth and a stable housing market.

[Infographic] ECONOMIC UPDATE SEPTEMBER 2024