Treasury’s new Head of Growth will have their work cut out
Do you want the good news or the bad news? Trick question, I’m afraid. There is no good news. The Organisation for Economic Co-operation and Development (OECD) has revised its forecast for UK economic growth this year from 0.9 per cent to 1.1 per cent, but – before you reach for the champagne – they’ve also downgraded their forecast for 2027 from 1.1 per cent to just one per cent.
The experts at the OECD have a moderately more optimistic view on inflation, suggesting a peak this year of 3.1 per cent (down from an earlier estimate of 3.7 per cent) but the Bank of England thinks it will continue to climb towards the end of this year and peak at 4 per cent by early 2027. It’s possible that growth is stronger than the forecasts, just as it’s possible that inflation comes in cooler than the gloomy scenario expected, but don’t hold your breath.
Private sector activity has stumbled, according to the latest PMIs, while consumer confidence has started to edge downwards. With fuel prices rising and energy costs set to spike in 2027, even one or two rate hikes will translate into higher mortgage costs just as other bills start to bite.
And then there’s the Budget. Taxes will almost certainly be increased (yet again) if only to keep John Healey on the right side of his “iron clad” fiscal rules. A combination of policy mistakes at home and war abroad means that next year could be characterised by stagflation.
Whitehall to the rescue?
But could help be at hand? The Treasury is advertising for a new head of the Growth Strategy Unit, “to shape and drive the UK’s growth agenda.” The job ad promises a “fun and fast-paced” environment in a “high-performing department.” The successful applicant will enjoy lots of “strategic, two-way stakeholder engagement” and plenty of “working in partnership,” obviously. For £86K (and a 29 per cent employer pension contribution, naturally) they’ll also need to show “a clear commitment to promoting diversity, inclusion and belonging.”
The Treasury says it “operates an office-based working approach,” which turns out to mean you can work from home on Mondays and Fridays. The Growth Strategy Unit works “with teams across HMT, No 10 including No10 North and beyond.” Beyond No 10 North? Newcastle, perhaps? Plenty of travel, at least.
Forgive my cynicism but I’ve been writing about our lacklustre economy for too long to have my hopes raised by the appointment of a new bureaucrat.