Unlock Editor’s Digest Lock for Free
British Prime Minister Rachel Reeves returned from a visit to the US last week. Using recent positive economic data, he decided to counter continued global doubts about the UK’s economy and the country’s appeal.
Reeves’ allies say they are convinced that the meeting between Washington’s finance chief and business leaders will remain cloudy by the recent political turmoil in the UK, including Brexit and Liz Truss’ “mini” budgets.
The Prime Minister has been accused by British business leaders of making things worse with a £40 billion tax rise budget and dark sound, but Reeves’ team says he has a new resolve to “speak” the UK.
She argued that the UK government’s economic reforms are making the UK a better place to invest, boosted by policy approvals by JPMorgan Chase CEO Jamie Dimon.
Dimon, who has run the largest US bank for almost 20 years, told the Financial Times:
“They strengthened their commitment to open economy, strengthened their infrastructure, and increased market stability. All of these are suitable for investors’ trust.”
JPMorgan is a large employer in cities, including London, Bournemouth and Glasgow, with Brexit’s 16,000-22,000 staffing. This increase comes in parallel with the growth of lenders’ European operations.
Dimon’s comments came days after BlackRock CEO Larry Fink praised the government for tackling “part of the tough issues” as he had bought billions of pounds of UK assets his company deemed “undervalued.”
Reeves’ New Optipismismisming Offensive is based on recent data from the economy as a whole. This is surprising analysts hope that the fresh interest rates cut by the Bank of England will be cut next week.
“The UK is a stable open economy that invests in. Some people have yet to keep up,” said the Prime Minister’s allies who described growth as a central mission of the government.
However, the person admitted that businesses and households were still struggling. Most of the data relates to the period before US President Donald Trump unleashed his trade war. This month, the IMF downgraded its global growth forecast, hitting business and consumer sentiment.
Reeves for the Washington State IMF and World Bank Spring Conference repeatedly emphasized support for free trade as it declared the UK’s appeal for technology, financial services and manufacturing investments.
However, BOE Governor Andrew Bailey warned that central banks should “responsibly” the risks to growth from the tariff surge.
“Fragmenting the global economy will be bad for growth,” he said.
Traders are hoping to cut the rate by an additional quarter of the point when the BOE Monetary Policy Committee meets next Thursday, bringing the benchmark rate to 4.25%, the last level seen in 2023.
UK economic data prior to US import duties is generally better than expected. The UK economy grew much better than its forecast in February, which saw a 0.5% expansion.
Inflation rose from 2.8% in the previous month to 2.6% in March, according to separate official data published this month.
Retail sales, a recent measure of consumer spending, rose 0.4% in March, disrupting analyst expectations for contraction, and expanded a significant increase in the past two months.
Recommended
GDP and retail sales suggest that the UK economy’s BOE March forecast, which is up 0.25% in the first quarter, is probably pessimistic, up from 0.1% in February.
According to the latest Reuters poll, economists expect the economy to grow by 0.5% in the first three months of the year.
Despite the pressure from high cost of living, household finances continue to be strengthened thanks to massive wage growth.
Official figures released this month show that in the three months from February to February, regular wages adjusted for inflation increased at 2.1% per annum, 2.1%. This increase marks the 21st consecutive month of revenue growth, surpassing price growth.
