Chancellor Advised to Revamp Fiscal Rules to Boost Productivity Amid 4–5% GDP Investment Strategy
UK Chancellor Rachel Reeves has received recommendations to overhaul the country’s fiscal rules in an effort to enhance productivity through sustained public investment. Advisers suggest that allocating 4–5% of GDP toward key areas such as infrastructure, education, and innovation could lay the foundation for long-term economic growth.
The proposed fiscal changes aim to shift the focus from short-term deficit targets to more flexible, forward-looking rules that align with the country’s productivity goals. This would allow for greater long-term capital spending without immediately triggering fiscal rule violations. The advisory framework emphasizes that a sustained level of investment is essential to close structural gaps and…
