Keir Starmer is conducting a comprehensive cabinet meeting with his senior team, following hot on the heels of the Bank of England’s stark revision of growth forecasts. In a move to offer a slight lift to mortgage holders, the central bank cut interest rates but also signalled for households to prep for a surge in inflation.
The BoE delivered what has been termed as a “wake-up call” to Chancellor Rachel Reeves, as it dramatically lowered the UK’s economic growth projections. According to these latest figures, GDP is now expected to hover around just 0.4% in the initial quarter of 2024—plummeting from a previously anticipated 1.4%, with projections for 2025 sitting at a mere 0.75%, and expectations for continued subdued performance over the next few years.
Likely dominating the discussions, the Prime Minister and top Cabinet ministers are convening away from the usual surrounds of No10, set to receive routine weekly briefings from various government departments. This will be succeeded by a “political cabinet” meeting, which sees civil servants exit to allow ministers to freely discuss matters including Labour’s standing in national polls and the forthcoming local elections slated for May.
Since scoring a remarkable victory in July’s election, Labour’s favour in Westminster polls has taken a nosedive, a trend many attribute to a sequence of unpopular judgements laid at the feet of a troublesome legacy left by the Tories, reports the Mirror.
Ms Reeves conceded she remains discontented with the current growth rate, despite welcoming Thursday’s interest rate cut which she labelled as beneficial for both families and businesses. She commented: “This interest rate cut is welcome news, helping ease the cost of living pressures felt by families across the country and making it easier for businesses to borrow to grow.
“However, I am still not satisfied with the growth rate. Our promise in our Plan for Change is to go further and faster to kickstart economic growth to put more money in working people’s pockets. That’s why we are taking on the blockers to get Britain building again, ripping up unnecessary regulatory barriers and investing in our country to rebuild roads, rail and vital infrastructure.”
Mr Starmer also shared a positive outlook on the Bank of England‘s move to slash rates, visualising it as more disposable income for the public. The PM remarked: “I think it’s important to look at what’s happened. The interest rate has come down, that’s the third drop in interest rates since July.”
He emphasised: “We are absolutely determined we are going to grow the economy, and I don’t mean a line on a graph, I mean people feeling better off.”