Mountain climbing

This report assesses the UK’s growth challenge 18 months into the new Parliament, examining how economic performance has evolved since the pandemic and evaluating the Government’s progress against its central mission to raise growth and living standards.

The economic backdrop remains highly challenging. UK GDP per person has barely grown since the pandemic and has fallen further behind international peers, reflecting long-standing weaknesses in productivity, investment and economic dynamism. While the past year has brought a welcome acceleration in productivity growth, this improvement has coincided with rising unemployment rather than stronger job creation. At the same time, Brexit-related trade frictions, weak business investment and persistent policy uncertainty continue to weigh on the economy’s capacity to deliver sustained income growth.

The report finds that the Government’s growth framework – built around restoring stability, increasing investment and reforming the economy – is sensible on paper, but delivery has been uneven. Important progress has been made with new fiscal rules, planning reform and public investment, yet delivery has often been too cautious given the scale of the challenge. The report argues that bolder action is now required in three areas where the growth payoff is largest: trade policy, housing supply and labour-market participation. Without sharper choices and faster progress in these areas, the UK risks remaining stuck in a low-growth equilibrium despite the emerging ‘green shoots’ in the data.

To note, on 3 February 2026, we amended the report to reflect concerns around the quality of MHCLG indicators of new supply within Table 217 and Table 253, in particular the comprehensiveness of figures related to housebuilding starts and completions. These likely underestimate housebuilding activity. In its place, we have used Greater London Authority data on starts in the Greater London area, and MHCLG data within Table 122 (‘housing supply; net additional dwellings, by local authority district, England’), Our changes are signposted where applicable in the report. Our amendments are largely confined to Section 5 of the report, in particular to Figure 25 and the accompanying discussion. While the incomplete measure of starts suggests London, Birmingham, Manchester and Sheffield are underperforming the national average, using the more comprehensive measure of completions suggests of these only London is underperforming the national average. Otherwise, our conclusions related to housebuilding are unchanged.