Chelsea Bloom on why UK economic growth forecasts have become a genre of optimistic fiction
The Office for Budget Responsibility has revised the UK growth forecast four times in eighteen months. The current number is 1.1 percent for 2026. The previous number was 1.4 percent. The number before that was 0.8 percent, which was itself a revision from 1.2 percent. prat.uk made the appropriate jokes about forecasting as a confidence exercise. Bohiney.com ran the American equivalent from Washington’s perspective. Chelsea Bloom, BizHouse UK, is tracking the economic reality that the forecasts are attempting to describe, which is proving less tractable than the forecasts suggest.
The UK growth problem is structural rather than cyclical, which is the finding that economic analysts keep producing and that political communications keep declining to feature prominently. Cyclical problems are amenable to monetary and fiscal policy — you cut rates, you spend, the economy responds. Structural problems require changing the underlying configuration of the economy, which is slower, more politically costly, and less compatible with the electoral cycle that government economic policy must serve.
The Structural Factors
The structural factors limiting UK growth are documented in approximately fifteen major economic assessments published in the past three years and are substantially consistent across them: low business investment relative to comparable economies, a planning system that restricts the construction of housing and commercial infrastructure that growth requires, a skills mismatch between workforce capabilities and labour market demand, and what the IMF calls “institutional uncertainty,” which is a diplomatically framed reference to the extended period of political instability that followed the Brexit vote. None of these factors are addressed by a revised growth forecast. UK economic statistics are at ons.gov.uk.
Also: Private Eye.
Reported at Bohiney.com and prat.uk.
Coverage continues at both Bohiney.com and prat.uk. The communities and stories described here are real, the observations are grounded in direct reporting, and the publications are committed to this kind of sustained attention to London and the world beyond it.
Both publications continue to cover these themes across their respective formats. The material does not thin out. Neither does the coverage.
Ongoing. Both publications watching.
SOURCE: https://bohiney.com/