Sunak has no plan for growth, says former BOE economist Haldane
RISHI SUNAK has no apparent strategy for growing the economy and has allowed pessimism to hold back the recovery, according to the Bank of England’s former chief economist Andy Haldane.
The Prime Minister’s refusal to set out his plans for boosting GDP are driving a reluctance to invest by businesses, said Mr Haldane, who was a senior official at Threadneedle Street until 2021 and is now chief executive at the Royal Society of Arts.
And he told BBC One’s Sunday with Laura Kuenssberg that Labour is also failing to provide a convincing plan. He said: “As things stand it is not really a growth programme ... we are currently short of that piece of the jigsaw puzzle ... what is the plan that is going to boost growth over the medium term?
“There were hints of it from the Prime Minister’s speech earlier in the week. And indeed from the leader of the opposition [but] that is still falling somewhat short of that plan,” he said.
Mr Sunak has abandoned many of his predecessor Liz Truss’s controversial reforms to boost economic growth.
During her short time at No10, Ms Truss took aim at a so-called “anti-growth coalition” made up of establishment figures happy with the status quo.
She ultimately lost power because markets panicked over her plans for major tax cuts without a corresponding reduction in public spending and Trus- sonomics was immediately junked when Mr Sunak came to power.
However, Mr Haldane suggested that businesses are now concerned about the bleak outlook with no plan in place for turning the country around.
He said: “Stabilising the ship was absolutely the priority at the end of last year. But this is the year where optimism and innovation and investment will only happen if we have some sense of a brighter economy for tomorrow. That’s the main reason why businesses are holding back on investing right now. That’s why the plan [needs to be] put in place today with expectations of improvement for tomorrow.”
Mr Haldane said he was optimistic about the second half of 2023. He added: “Last year, I started with hope and ended with despair. This year kicks off with despair, and I’m hopeful we might have a hope by the end of the year.
“I think [inflation] has peaked in headline terms already. So this will be the year when inflation falls off ... nonetheless, underlying here is a very tight labour market. Lots of unfilled vacancies that are putting upwards pressure on pay. And that, for me, will lead to inflation staying above its 2pc target.”
He also said that the raft of industrial action was being driven by companies battling to fill vacant roles.
A spokesman for the Treasury said: “We have a plan that will help to halve inflation this year while laying the foundations for long-term growth through record investment in infrastructure and new industries ... we have already shown how we will use our freedom outside the EU to unlock more than £100bn of private investment.”