Reviving the economy Labour needs to stoke confidence in its policies

Labour needs to stoke confidence in its policies

- Richard Partington

Not everything has gone smoothly for Keir Starmer. At the end of Labour's first calendar year in power, the prime minister is on the back foot after a run of disappointing economic updates.

With a backlash over several unpopular tax and spending decisions, and as pressure mounts for a change in course, the new government is in danger of losing control of its primary mission to revive Britain's misfiring economy.

Aiming to regain the initiative, the chancellor, Rachel Reeves, is preparing to give a speech in early 2025. With a spending review looming by spring, she is expected to say that Labour has stabilised the economy and can now focus on the delivery of its manifesto pledges.

The government has dented economic confidence and has a job on its hands to rekindle animal spirits after a dour first five months.

Surveys of business and consumer confidence show that the chancellor's pitch-rolling before her autumn budget contributed to weaker spending and investment.

Meanwhile, unpopular decisions - such as cutting winter fuel payments and sticking to the two-child limit on benefits - were made quickly, while Labour's landmark policy changes, such as the creation of GB Energy and the industrial strategy, took longer to materialise.