The New Statesman: politics and culture UK economy "fastest growing in the G7 this year" | Politics with Anoosh Chakelian
Aug 14, 2025
The UK economy had a surprising growth spurt of 0.3%, making it the fastest growing in the G7, despite looming challenges. Discussions touch on the clash between the government's optimistic narrative and the harsh realities citizens face amid inflation. A notable American political figure mingled with UK right-wing leaders, raising eyebrows about populism and US-European ties. The talk also dives into proposed inheritance tax reforms and their likely impacts, as well as upcoming budget measures that could shift the economic landscape.
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UK Growth Beats Expectations
- The UK grew 0.3% in Q2, a sharp slowdown from 0.7% but still above forecasts.
- George Eaton notes the UK is the fastest-growing G7 economy so far this year, which helps the government's narrative.
Fiscal Stimulus And Wage Gains Prop Up Growth
- Growth was supported by last autumn's expansionary budget and real wage gains since mid-2023.
- Eaton highlights spending increases, tax rises, interest rate cuts, and trade deals as factors propping up growth.
Reeves Faces A Budget Conundrum
- Most economists still expect a budget 'black hole' that Reeves must fill to meet fiscal rules.
- Eaton says Reeves will likely need more revenue and is resisting loosening fiscal constraints after market jitters.
