In mid-September, the Labour government released a highly anticipated fiscal statement featuring several pro-business measures aimed at bolstering economic growth. Key policies include:
- Reducing the corporate tax rate from 25% to 20% to attract investment.
- Launching a £10 billion fund to support innovation and green technology startups.
- Increasing tax credits for R&D spending to 15%.
- Committing £50 billion to infrastructure projects over the next five years.
The business community reacted positively, with the CBI praising the statement as a significant boost to business confidence.
Bank of England Cuts Interest Rates to 4.75%
The Bank of England lowered interest rates by 50 basis points to 4.75% at its September meeting, responding to easing inflation and concerns about the pace of economic recovery. BoE Governor Andrew Bailey noted that while price pressures are subsiding, the central bank remains prepared to act further if necessary.
UK Manufacturing Sector Expands at Fastest Pace in 3 Years
The S&P Global/CIPS UK Manufacturing PMI surged to 58.7 in September, the highest level since 2021, up from 55.2 in August. This indicates a robust rebound in the manufacturing sector, marked by increased new orders, output, and employment. Duncan Brock from the Chartered Institute of Procurement & Supply highlighted the sector’s strong performance and rising optimism.
These updates underscore a positive shift in the UK business landscape as the Labour government implements growth-oriented policies and the economy shows signs of strengthening. However, challenges such as sustaining the recovery and managing inflation and interest rates persist.
