The British economy is growing significantly less than previously assumed. The Social Democratic government has therefore created a explosive strike list. There should also be social benefits.
The economic outlook for the United Kingdom are not good. The forecast of the state authority OBR for 2025 must be halved – down to 1.0 percent, as Finance Minister Rachel Reeves had to announce in parliament today.
The new forecast has a significant impact on financial policy. When growth weakens, the tax revenue is lower – there is a risk of a deficit. The British government has excluded a tax increase. It is also difficult to take out more loans. State debt is significantly higher in Great Britain than in Germany: in the United Kingdom, the state debt rate is almost 100 percent. An investment package like the German politician was simply unthinkable in Great Britain.
More young adults are supposed to work
So you have to save – for example with social spending. The social security systems no longer worked, said Reeves in the lower house. Every day, around 1,000 people would be approved for support services for long -term diseases and for people with disabilities. The Labor government wants to save here.
Reeves also emphasized that far too many young people – about a million – neither worked nor in training. Labor wants to get young adults to work. In addition, other measures are to be spelled out in the next few months.
Murren in the Labor party
Overall, the amount that the social democratic government has to save is not that big: it is almost 20 billion euros. But the strike list is politically explosive. In the party, some of them have already grumbled and argue that Labor saves worse than the conservatives in 14 years.
Rachel Reeves also made it clear today where to invest to boost growth. The Labor government has promised several major projects, for example a third start and runway for Heathrow Airport. In addition, around 2.4 billion euros are put into housing construction to create affordable living space. However, such measures are likely to work in the medium term. Workers are also missing, and permits often take far too long.
Extra expenses for defense
Reeves also announced that the government wants to promote the defense industry. The United Kingdom is to become a superpower in this area. The government has already promised that it will increase defense expenditure to 2.5 percent of annual economic growth by 2027, and 3.0 percent in the years afterwards. Medium -sized companies should also benefit from this.
The finance minister finally announced that it would simplify the tender procedures. Numerous British corporations are closely intertwined with European companies in armaments projects, for example with the wheel armor “Boxer”.
Experts fear that the economic situation could cloud even more over the course of the year – for example if the US government introduces further tariffs. Until now, Great Britain has been excluded. But even without tariffs on British goods, US politics could slow down growth worldwide.
