Fourteen days into the year and the world holds its breath, as Trump prepares to retake control of the White House with a very different policy agenda to Biden. In terms of the economy overall, the USA should therefore continue to outperform other G8 countries, as the combination of tax breaks, deregulation and energy sector growth acts to boost GDP.
With the recent change in government, the shift in economic strategy is evident. The OECD is projecting economic growth for the UK next year; however, their analysis suggests that state-led enterprises are likely to benefit the most. At the same time, companies are delisting from the London Stock Exchange at unprecedented rates, raising questions about what measures are necessary for the city’s revival.
In his first public address since assuming the role of NATO Secretary-General, Mark Rutte emphasized the need for member states to adopt a “war-time mindset” and significantly increase defense spending. Reports suggest that NATO may establish a new spending target of 3% of GDP by 2030, a marked rise from the current 2% benchmark, which remains unmet by eight member nations.
The revision by the OECD that Britain’s GDP growth for next year will be higher than initially thought will be welcome news to Rachel Reeves and Kier Starmer. Indeed, the increase has been from 0.4% when forecast in May, to 1.1% now. At a time when the Government are facing acrimony over their budget, and business confidence is deteriorating, it is important to understand though, that the reason why the forecast has been lifted is due to the planned investments into the public sector.
The latest report from the Institute of Directors is out, and the findings show business confidence in the wider UK economy to close to its record low, in April 2020 (-69) at the onset of the Covid pandemic, and marks the second lowest reading of the Index since it began in July 2016. Just as importantly, the study has asked business leaders how they were expecting to be affected by and responding to the changes in employer National Insurance.
