The UK economy: policies for investment and productivity growth
Since the global financial crisis, the UK has been grappling with persistent poor productivity performance. While a number of factors have been at play, reduced investment due to austerity harmed growth in the early years, and more recently, policy uncertainty surrounding Brexit has held back investment. While Brexit has dominated UK politics and economic policy since the referendum on EU membership in 2016, the UK government has been developing an industrial strategy in recent years, and has also made a commitment to achieving net zero carbon emissions by 2050. These two elements of policy must be consistent and long-term to enable the UK to meet its commitments, while realising the growth opportunities associated with innovation in the low carbon transition. While institutions around industrial strategy have been strengthened, there is a risk that the volatile political climate could prevent its objectives from being achieved.
25 November 2019 Paper Number CEPEA049