Liz Truss, Britain's shortest-serving prime minister, has suggested that her mini-budget may have paid off in the long term, as her newly-convened taskforce warned that the UK risks falling behind other nations unless it tackles stagnation.
During the launch of the Growth Commission, the former PM likened sluggish growth in recent years to a "boiling a frog situation." When asked about her own economic approach, she responded, "It's a long game."
Members of the taskforce made grim predictions, emphasising the need for the UK to harness the opportunities presented by artificial intelligence and other technological advances. US economist Tyler Cowen warned that living standards in Poland could surpass those of Britain within a decade unless the UK economy is boosted.
Truss, who plays no formal role in the commission beyond convening it, expressed her concerns about the situation, stating, "We've been through a boiling a frog situation... It hasn't dramatically gone away, but it's got worse and worse."
The co-chairmen of the commission, Shanker Singham and Douglas McWilliams, highlighted that sluggish growth is not exclusive to the UK but a pervasive problem in G7 countries. However, McWilliams noted that Britain, in particular, has not seemed to have regained its economic momentum in the post-Covid years.
Improving competition was identified as a key factor in boosting growth, with McWilliams stating: "We are almost fanatically pro-competition... We feel that's the thing that will make the difference."
Singham emphasised the need for more "dynamic" economic modeling, which takes into account the long-term impact of issues like tax policy, so that people understand the "cost" of government decisions.
The Growth Commission has suggested that consistent growth levels of 3 per cent can be achieved by 2040 but has not made specific policy recommendations on how to achieve this target. Its initial work focuses on highlighting the problem of low growth and aims to produce further analysis before and after major fiscal events to explore how struggling economies can be transformed.
The launch of the Growth Commission comes shortly after Chancellor Jeremy Hunt prioritised tackling inflation over tax cuts, disappointing Tory MPs who were hoping for pre-election giveaways.
Growth has been a major concern for Truss during her bid to become Tory leader and her subsequent short-lived tenure in No 10. Truss and her chancellor Kwasi Kwarteng used a mini-budget to stimulate growth in the British economy, which triggered turbulence in the financial markets and led to an increase in mortgage rates.
*You may notice the below message on a small number of Manchester Evening News articles. We like to innovate and this is part of a trial to look at whether AI can help speed up the publishing process, We will always declare where this happens.
This article was crafted with the help of AI tools, which speed up the MEN's editorial research. A Manchester Evening News editor reviewed this content before it was published. You can report any errors to newsdesk@men-news.co.uk*
