The numerous “plans for growth” that have been announced by the Government, the Opposition, and various commentators in recent months vary in their analytical rigour but all miss one crucial point: many of the reforms required to lift the UK’s pitifully low rate of trend growth are interrelated. Investors should therefore be wary of anyone claiming to have found a silver bullet to raise long-term growth. What’s required is a joined-up programme of reforms that cuts across multiple areas of the economy and takes into account necessary changes in the macro structure of the UK economy, rather than just focusing on micro-level policies. The challenge is formidable and – while it may be politically seductive – cannot be reduced to a five-point plan.
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