The UK has suffered from chronically low levels of public investment in recent decades. Compared to its G7 counterparts, the UK has consistently ranked in the lower half of countries on public investment as a percentage of GDP for most of the last 30 years. Worryingly, it has also typically ranked the lowest in the G7 in terms of overall investment, public and private. The new government’s proposed ‘Green Prosperity Plan’ and its ideas for a national wealth fund do suggest some appetite for increased public investment. Fathom estimates that these two plans can contribute to a one per cent increase in public investment as a percentage of GDP over the course of the next parliament, compared to existing plans. It is questionable, however, whether this level of increase is ambitious enough to offset the effect of years of underinvestment and cuts already put in place by previous governments. More detail on Labour’s spending plans is expected in the budget on 30 October.
Refresh this chart in your browser | Edit the chart in Datastream
The views expressed in this article are the views of the author, not necessarily those of LSEG.
______________________________________________________________________________________
LSEG Datastream
Financial time series database which allows you to identify and examine trends, generate and test ideas and develop viewpoints on the market.
LSEG offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.
