Goldman Sachs Raises UK Growth Forecast With the Labour Party in Power
Now that the Labour Party has steered the ship into government, front‑line investment bank Goldman Sachs has nudged up its outlook for the UK’s economic growth.
New Numbers for the Next Few Years
- Next year’s GDP growth is expected to hit 1.6 %, up one percentage point.
- By 2026, the forecast climbs to 1.5 %.
The big jump comes after economists said that newer “reform‑friendly” policies could turbo‑charge the economy. In plain English:
What the Scholars Think
- Planning System Overhaul: Relaxing regulations could let more homes pop up and boost productivity.
- Public‑Sector Boost: More investment in infrastructure could raise the “potential output”, i.e. the economy’s ceiling.
- Closer EU Ties: Better trade relations might soften some of the after‑effects of Brexit.
But every silver lining has a cloud: higher taxes and less net migration might stall the growth wave. The bank agrees that the real impact will only become clear once the new cabinet rolls out its full policy roadmap.
What Pantheon’s Robbie Wood Thinks
Rob Wood, Pantheon’s lead UK economist, added: “Keir Starmer’s sizeable majority offers a chance to set a steady policy course that could lift business investment and attract fresh foreign capital. He’s well positioned to push major supply‑side reforms—like cutting planning regulations—but even a great plan takes time to fully take effect.”
So grab your coffee, sit back, and watch the numbers climb—while we keep a keen eye on whether those reforms hold up in practice.
