This incident last month impacted approximately 8.5 million Microsoft Windows devices, disrupting internet connectivity and causing widespread travel chaos, including mass flight cancellations at airports.

The company now anticipates annual revenue to range between $3.89 billion and $3.90 billion, adjusting its initial forecast of $3.98 billion to $4.01 billion, and lowering the expected figures below the analyst consensus of $3.95 billion. The adjusted profit per share forecast was also diminished, now projected to be between $3.61 and $3.65, down from a prior range of $3.93 to $4.03.

In contrast, competitors SentinelOne and Palo Alto Networks have increased their annual revenue forecasts this month, indicating a potential gain in market share at the expense of CrowdStrike.

Despite the overall downturn, CrowdStrike reported second-quarter revenue growth of about one-third, reaching $963.9 million, surpassing the estimates of $958.6 million. Analyst Shaul Eyal from TD Cowen remarked that the second-quarter results and outlook were “better than feared,” asserting that the situation is not dire. He highlighted that discussions will likely focus on potential rising liabilities due to the outage.

George Kurtz, CrowdStrike’s co-founder and CEO, emphasized the company’s dedication to customer recovery following the July 19 incident, stating, “We emerge as an even more resilient and customer-focused CrowdStrike, continuing to invest heavily in innovation.”

Chief Financial Officer Burt Podbere added, “For the second quarter, we achieved significant growth across revenue, operating profit, and net income, reflecting our targeted execution strategy. Our market opportunity remains unchanged.”

Following the outage, CrowdStrike’s stock experienced a hefty decline of around one-third in value and has not yet fully rebounded. In pre-market trading in New York, shares were down $2.42, or 0.9 percent, pricing at $261.78.

In his recent address in the Downing Street garden, Sir Keir Starmer strongly suggested that tax hikes are on the horizon for the budget set to be unveiled on October 30. He indicated these increases will be “painful”, emphasizing that those who can afford it the most will face the greatest burden.

This sentiment mirrors language previously used by the Conservative Party, particularly regarding the tightening of regulations for non-domiciled individuals. Meanwhile, the prospect of a burgeoning tax avoidance sector seems likely in response to these anticipated changes.

However, implementing tax increases is particularly challenging when significant taxes—such as income tax, VAT, national insurance, and corporation tax—are explicitly off the table. Additionally, the government has pledged not to raise taxes on the “working people.”

Despite the likelihood of manifesto promises being broken, it would be unexpected for the government to retract its commitment against increasing the primary tax rates.

The commitment to refrain from raising taxes on working individuals complicates matters further, as Labour has inherited a Conservative policy that has frozen income tax and NI allowances until 2028, essentially creating a prolonged stealth tax on earners.

What potential new taxes could be on the table? Labour has consistently left open the possibility of increasing the capital gains tax (CGT). Currently, this tax is projected to contribute approximately £15 billion to government revenue this year, according to the Office for Budget Responsibility (OBR).

However, it seems unlikely that CGT hikes will bring substantial returns. The tax exists at different rates for basic and higher-rate taxpayers, and even significant increases would yield relatively modest additional revenue in public finance terms.

Another avenue for the Chancellor to explore could be pension tax relief. A recent report from the Fabian Society suggests replacing the current tiered system—which favors higher earners—with a more uniform flat-rate relief. Combined with additional adjustments, this could potentially generate over £10 billion annually.

Renewed discussions regarding national insurance may be warranted, especially since ministers have primarily focused on employees’ NI when dismissing the idea of increases. This could suggest the potential for raising employers’ NI, which has historically raised concerns as a “tax on jobs.”

Alternatively, the Chancellor might consider adjustments to NI contributions above the upper earnings limit, which could impact higher earners significantly.

There is also the question of fuel duty, which has remained unchanged since 2011, largely due to political pushback from motorists. Chancellor Rachel Reeves could begin by reversing the recent temporary cut in fuel duty, then potentially reintroducing indexation.

Additionally, the Chancellor could require the Bank of England to modify the interest payments made to banks on their reserves, effectively creating a backdoor tax on financial institutions.

Many of these proposed modifications may only complicate an already intricate taxation system while imposing various financial burdens. Previous instances, such as George Osborne’s straightforward increase of VAT, showcased the merit of simpler tax policies.

It is essential to investigate how we have reached a point where tax increases are now being discussed shortly after the last administration reduced employee NI contributions, which contributed to the current pressures on public finances.

A primary driver of the need for tax increases is the significantly elevated public spending levels. While the overall tax burden is noted to be the highest since the late 1940s, public spending has also reached historic levels.

Before the Covid pandemic, public spending was about 39.6 percent of GDP. Projections for this year suggest it will rise to 44 percent, surpassing the previous peacetime record observed during the pandemic. Although estimates indicate it could stabilize around 42.5 percent in the late 2020s, many experts, including the OBR, consider these projections overly optimistic.

In contrast, tax revenue is also predicted to increase, potentially reaching 37.4 percent of GDP, heavily influenced by Labour’s commitments outlined in their manifesto.

As discussions of further tax hikes loom, there are growing concerns about how these measures may stifle economic growth. Instead of solely seeking revenue from existing sources, a shift towards reforming taxes to promote growth should be prioritized to ensure sustainable economic progress.

Finally, to address inquiries surrounding the chronic trade deficits, it is crucial to consider the current account, which indicates the net balance of payments. The UK recorded a trade deficit of £33.4 billion last year, with a wider current account deficit of £88.5 billion driven by outflows to foreign investors.

Despite the necessary balancing act within the balance of payments, the UK’s international investment position remains significantly negative. To attract the needed capital inflows, a combination of currency depreciation and higher long-term interest rates may be required. The UK’s government bonds currently yield the highest rates in the G7.

Long-standing trade and current account deficits may lack immediate dramatic consequences, but they carry longer-term repercussions.

david.smith@sunday-times.co.uk

About £3. I generally don’t use cash anymore; I prefer contactless payments.

What credit cards do you use?

I mostly rely on my debit card but use my credit card for larger purchases, like my recent £250 pair of spikes. I always pay off the bill immediately.

Are you a saver or a spender?

I strive to save, but I lean more towards being a spender. I love kitchen appliances; my latest purchase is a £500 Nama J2 juicer. I’m now hunting for the perfect coffee machine.

Do you own a property?

Yes, I bought a three-bedroom end-of-terrace house near Knutsford in Cheshire for about £360,000 last year. I plan to extend the bathroom by knocking through one of the walls. I see myself living here for the next five years, though I might need more space if I start a family.

Are you better off than your parents?

Probably. I grew up in Leeds with six siblings. My mother is Jamaican and my stepfather is from Barbados. My family owned a restaurant called Paradise in Leeds, but now my mother leads a cleaning team, and my stepfather is a forklift truck driver.

How much did you earn last year?

Enough to maintain my bouji chocolate-brown sausage dog, Max, whose upkeep costs me a few thousand pounds annually. This includes fresh food, collars, and toys, as well as a little pool for summer.

What was your first job?

My first job was working as a waitress at my parents’ restaurant. I was good at it and earned a lot of tips. My athletic career began to take off in my late teens, especially after winning my first title at the 2015 athletics World Championships and securing sponsorships post-2016 Rio Paralympics.

When did you first feel wealthy?

After qualifying for UK Sport funding around 2015, which provides about £28,000 a year tax-free. This allowed me to train without financial worries, supplemented by sponsorship money.

Have you ever worried about how you were going to make ends meet?

Yes, especially during university. I often had to borrow money from relatives to cover food or going out.

What has been your most lucrative work?

Television appearances have been quite profitable. The most lucrative was a Tesco social media advert for their Christmas meals, which paid about £20,000 for a couple of hours of work.

Do you invest in shares?

Not right now, but maybe in the future.

What’s best for retirement — property or pension?

Both are important, which is why I’ve started a private pension.

What has been your best business decision?

Participating in TV shows has significantly increased my exposure and social media following, making it easier to get sponsorships. Winning Celebrity Masterchef was tough but worthwhile. My mum and I hope to write a cookbook together someday.

And your best investment?

The KitchenAid stand mixer I bought for about £250. It’s great for baking, which helps me relax and serves as practice for Masterchef. I enjoy baking chocolate birthday cakes for family and friends.

What about your worst investment?

I’ve bought many dresses worn only once. My worst investment was likely a pair of £800 three-inch Valentino heels, which I rarely wear due to balance issues caused by my MS.

What’s your money weakness?

Trainers. I have over 20 pairs, although I only regularly wear five or six. I especially like Nike Air Force 1 trainers, costing between £100 and £200. I’m a bit of a Nike enthusiast!

What’s your most extravagant purchase?

I treated my mum, brother, and sister to a two-week holiday in Jamaica last year, which cost about £20,000. We stayed at the Moon Palace, and it was a memorable trip.

What’s your financial priority in the years ahead?

Saving money to upgrade to a larger home.

What would you do if you won the lottery jackpot?

I’d buy a bigger house for myself and a nice place for my mum, possibly a property in Jamaica. I’d also donate to the MS Society and St Gemma’s Hospice in Leeds.

What is the most important lesson you’ve learnt about money?

Money can come and go quickly, so always have some set aside for unexpected expenses.

This weekend, Labour indicated a renewed determination to resolve the deadlock with British Steel’s Chinese owner, Jingye, which has cast uncertainty over Scunthorpe’s vast operations for over four years. Jingye is now playing a crucial role in reaching a compromise by committing to finance the loss-making operations at least until the latter half of 2025.

British Steel is one of only two producers of strategically essential “virgin steel” in the UK, alongside Tata Steel in Port Talbot, Wales. Tata is also in advanced discussions with the government for a similar bailout.

Jingye took over British Steel in March 2020 following its collapse into insolvency the previous year. The company runs two blast furnaces and employs 4,000 workers at its Lincolnshire steel plant.

Executives aim to transition from the company’s unprofitable blast furnaces to modern, cleaner electric arc furnace (EAF) technology, which would cost £1.25 billion. The switch would reportedly cut carbon emissions by 75%, according to British Steel.

However, Jingye is unwilling to proceed without significant public subsidies and seeks access to £600 million in taxpayer support.

Unions caution that even with an approved deal, approximately 2,000 jobs could be lost, as EAF technology requires far less labor than traditional methods.

Some Scunthorpe production might also shift to British Steel’s Teesside plant, where a new EAF facility is planned.

Negotiations have stalled under successive Conservative governments, with officials skeptical about British Steel’s Chinese backers and concerned about multiple red flags from the company’s auditors.

The change in government has reinvigorated discussions, with several potential options now being considered, including investing in carbon capture and storage and maintaining blast furnace operations until the new EAFs are functional.

“We’re collaborating with trade unions and businesses, including British Steel, to ensure a green steel transition that benefits workers and protects the future of the British steel industry,” a government spokesperson stated.

Recently filed accounts should alleviate some of Whitehall’s concerns over British Steel’s finances. The accounts reveal that Jingye infused £100 million of equity last October and committed to providing financial support, if necessary, until at least July 2025. British Steel has also received over £200 million in loans from Jingye.

The delayed accounts, covering the year up to December 2021, were finalized on July 18, 2024, following Labour’s rise to power.

Financial commentary noted that the new government “understands” the cost pressures on British Steel. Formal funding talks with Sir Keir Starmer’s administration are ongoing, the company noted.

A government spokesperson commented, “Decarbonisation doesn’t equate to deindustrialisation, which is why we’ve committed £2.5 billion to rejuvenate the steel industry and support communities for future generations.”

Sources close to the talks believe that a British Steel rescue deal is unlikely to conclude before a similar agreement for Tata Steel.

British Steel did not provide a comment.

Tata’s Indian owners had previously negotiated with Rishi Sunak’s government to shut down their two blast furnaces in Port Talbot and switch to EAF technology. However, the agreement was unsigned when Sunak called for an election in early July.

Business Secretary Jonathan Reynolds successfully persuaded union leaders to call off strikes at Port Talbot shortly after taking office. The strikes threatened to derail the Conservative-agreed deal, which would have offered the longest-serving South Wales steelworkers up to £100,000 in redundancy payouts.

Reynolds now faces potential conflict with unions over Labour’s strategy for the steel sector. Union leaders argue that public funding should only be provided if blast furnace production continues.

Both British Steel and Tata contend that UK blast furnace production is financially unsustainable. Maintaining blast furnace production in the medium to long term would also contradict Labour’s environmental commitments. For example, Port Talbot alone accounts for about 20% of Wales’s carbon emissions.

In recent years, home emergency and boiler cover have drawn much attention. Common complaints include delays in emergency callouts, repair issues, and exclusions in contracts. Lately, significant and unrealistic premium hikes have become more frequent.

Upon receiving their insurance renewals, many customers are likely shocked by price increases sometimes reaching 50 percent for motor, home, and contents insurance policies.

• How to save money on your energy bill

There are various reasons for increasing insurance premiums. If you made a claim last year, that’s one reason. For home emergency and boiler policies, the rising costs of repairs and raw materials is a common culprit. The age of your boiler or heating system also matters—British Gas noted that when a boiler exceeds 6 and 11 years, the cover price can rise.

Your boiler model can impact the premium, especially if spare parts are no longer available, and the number of radiators in your property (the average is seven) can also play a role. External factors like engineer availability in your area and the annual number and cost of claims nationally can also drive up costs.

• Compare energy suppliers

Insurers are not required to disclose detailed reasons for substantial premium increases, which frustrates customers. Detailed breakdown requests are often denied, making it difficult to understand how to lower your bill.

The market for home emergency, central heating, and boiler insurance lacks many specialist competitors, leading many to stick with their current provider. However, other options are available if you face an unreasonable premium increase.

Although you weren’t able to increase the excess, other readers might lower their premiums by doing so, decreasing the coverage level, or selecting a more basic policy.

• British Gas left my 94-year-old neighbour in tears

Opting for a basic boiler or heating service or replacing an old boiler can reduce your risk as a customer, potentially lowering your premiums. Ask to remove any unnecessary policy benefits to cut costs further.

The best way to reduce your bills is to negotiate with your insurer and be willing to switch providers if they won’t lower the price. In your case, this strategy paid off—you bargained over the phone, and British Gas agreed to reduce your premium by £98, making the annual increase just £14. It always pays to ask.

Martyn James is a consumer rights champion covering various issues from energy bills to canceled flights and pothole claims.

To evaluate these questions, a look back to 2010 is necessary, the year the OBR was established “to examine and report on the sustainability of the public finances.” It possesses full discretion “in the performance of its duties,” granted those duties are executed independently, transparently, and objectively, considering only the sitting government’s policies. This framework typically necessitates creating forecasts to determine whether the government’s declared taxation and spending plans align with its fiscal aims. Consequently, a perception has emerged, notably expressed by Simon Wren-Lewis in his Mainly Macro blog, that fiscal policy is largely dictated by the OBR, as the government must be seen to be meeting its fiscal goals to maintain market confidence.

Beyond this perception, two significant issues plague the current system: the OBR’s obligation to accept government policy as a given, even when deemed unrealistic (for instance, when overspending is anticipated), and the fiscal rules themselves. These challenges mean that in evaluating budgets and autumn statements, the OBR does not effectively analyze the sustainability of public finances.

Expounding further, it is evident that the fiscal rules are arbitrary constructs determined by the government. Whenever there seems to be a risk of these fiscal targets being missed, adjustments have been made to the rules. Additionally, the reliance on a five-year horizon enables the government to meet targets through implausible commitments regarding future spending and taxation. Granting the OBR the authority to critique such forecasts could enhance the system significantly, potentially through allowing the agency to publish scenario analyses that consider more credible assumptions.

The National Institute for Economic and Social Research has highlighted that the reliance on a five-year plan strongly discourages long-term public investment initiatives. Since the returns from such projects frequently manifest over periods extending beyond five years, they can elevate government debt without contributing to GDP growth at the five-year mark. Nevertheless, evidence indicates that effective public investment can substantially elevate long-term GDP, thus aiding in the reduction of the debt-to-GDP ratio. Adjusting the fiscal rules—such as extending the debt target to ten years or establishing rules based on public sector net worth—could partially remedy this issue.

A more comprehensive solution would involve permitting the OBR to independently assess the sustainability of public finances based on its criteria. In this scenario, the government would present its budget, and the OBR would generate an entirely autonomous forecast. Such an independent forecast would allow financial markets to evaluate fiscal sustainability and determine bond pricing correspondingly.

The OBR could base its evaluation of sustainability on its long-term projections for the debt-to-GDP ratio, clearly articulating the assumptions underpinning this assessment (specifically regarding the impact of public investment on output, technological growth, and population growth), alongside a precise definition of what constitutes “sustainable.” It’s important to note that the OBR already performs long-term projections in its Fiscal Risks and Sustainability Report, meaning this recommendation would not impose new demands on the agency. Such an approach could also encourage the government to engage more in long-term planning in its budgeting processes.

Professor Stephen Millard is deputy director at the National Institute for Economic and Social Research.

Analysis conducted by Foreign Investors for Britain, a lobbying group, indicates that the Treasury’s revenue could drop by as much as £900 million each year if the tax relief for non-doms is eliminated. Conversely, it could see an increase of up to £1.1 billion if a significant number of non-doms opt to remain in the UK through the end of this decade.

Insights from Oxford Economics, the consultancy behind the report, suggest that the fiscal consequences of the changes enacted by the previous administration remain “highly uncertain.” Their assessment of potential tax gains is notably lower than the £3 billion forecast by the Office for Budget Responsibility earlier this year.

The report cautions that removing the non-dom tax system may have a much more substantial effect than the alterations applied in 2017. It warns that the population of non-doms could decline by up to a third under the most adverse projections, resulting in an estimated tax gain of £600 million in the first year following the reforms in 2025-2026, which could eventually evolve into a £900 million annual deficit for the Treasury by the decade’s end.

Starting from April 6 next year, the UK is set to eliminate the preferential tax regime for wealthy foreign nationals not officially residing in the country, which currently allows them to exempt foreign income from UK taxation. The government has also proposed that non-dom assets held in trusts will be subject to inheritance tax as part of a shift to a residency-based tax framework.

The report gathered data from 73 non-doms along with more than 40 tax consultants representing over 950 non-dom clients. Findings revealed that 63% of participants plan to leave the UK within two years following the enactment of these reforms, while 98% indicated they would consider emigrating sooner if the non-dom status was abolished.

With the new regulations, non-doms who arrive in the UK after next April will be exempt from taxes on foreign income for their first four years in the country, while existing non-doms will transition under a special tax treatment for two years.

Surveyed individuals reported average investments totaling £118 million in the UK and contributions of £5.8 million to charitable endeavors, as per Oxford Economics. The number of registered non-doms in the tax year ending 2023 stood at approximately 83,800, reflecting an upward trend since the onset of the pandemic, with their annual tax contributions reaching £8.9 billion, the highest figure in six years based on HMRC data.

Estimates concerning the potential fiscal outcomes from the changes to the non-dom tax regime carry significant uncertainties. Oxford Economics cautioned that its sample might not accurately represent the broader non-dom demographic.

In a scenario where non-doms take longer to exit the UK, the tax reforms could generate £1.3 billion in the upcoming fiscal year, diminishing to £1.1 billion by 2029-2030. The report concluded that the long-term fiscal effects of the policy are likely to worsen as elevated emigration rates in the near future and decreased immigration rates in the longer term result in a notable reduction in the non-dom population.

The Office for National Statistics attributed this increase mostly to smaller declines in gas and electricity prices compared to a year ago. Inflation had previously held steady at the 2% target for the past two months.

This rise fell short of expert predictions, with City analysts forecasting a 2.3% rate and the Bank of England anticipating 2.4%.

Meanwhile, services inflation, which is closely monitored by the central bank, dropped significantly to 5.2% from 5.7%, considerably below the Bank of England’s 5.6% forecast. Core inflation also saw a decrease, falling to 3.3% from 3.5%.

• Rising inflation won’t affect rate cuts but will hit the poor

The retail price index (RPI), a more traditional measure of inflation, rose to 3.6% last month. This increase could potentially raise the cost of annual rail season tickets by the same margin. Governments have historically tied rail fare hikes to the July RPI rate, but Labour has yet to confirm whether this practice will continue. Such an increase would, for example, raise the cost of a season ticket from Reading to London by around £200.

The pound slipped against the dollar upon the news, declining by 0.2% to $1.28 before regaining some ground. The FTSE 100 index gained 0.56%.

The slower decline in energy prices over the past year contributed to the higher headline inflation rate in July. Prices for oil, gas, and electricity surged following Russia’s invasion of Ukraine in February 2022.

Grant Fitzner, chief economist at the Office for National Statistics, commented, “Inflation ticked up slightly in July as domestic energy costs fell, but by less than a year ago. This was partly offset by a drop in hotel costs following strong growth in June.”

Analysts had speculated that Taylor Swift’s Eras tour had temporarily driven up accommodation costs in the UK in June.

This increase in inflation marks the first significant economic challenge for Prime Minister Sir Keir Starmer since taking office. He has pledged to boost GDP growth and stabilize policy after the frequent changes to taxes and government spending under the Conservatives.

The Office for National Statistics is expected to announce on Thursday that the economy grew by 0.6% over the last three months, down from 0.7% in the first quarter.

• Rising inflation won’t affect rate cuts but will hit the poor

Darren Jones, Chief Secretary to the Treasury, stated, “The new government is acutely aware of the scale of the challenge we have inherited, with many families still grappling with the cost of living. This is why we are making tough decisions now to fix the foundations of our economy and rebuild Britain to make every part of the country better off.”

Chancellor Rachel Reeves is expected to announce tax increases in her first budget on October 30 after highlighting £21.9 billion of government overspending.

The inflation rise comes two weeks after the Bank of England reduced interest rates by a quarter point to 5% from 5.25%, the first reduction since March 2020.

The Bank remains concerned that high inflation in the services sector and strong wage growth could keep inflation above its target in the long term.

Experts forecast that inflation will stay above the central bank’s target for the remainder of the year due to unfavorable comparisons with last year’s energy and food prices. However, they also anticipate that the Bank will cut borrowing costs by a further 0.5 points by the end of 2024.

New figures released on Tuesday showed that the unemployment rate slightly decreased to 4.2% from 4.4%, causing traders to question whether the Bank of England’s monetary policy committee will lower borrowing costs at its next meeting on September 19. Wage growth eased to 5.4%, nearing a two-year low.

Yael Selfin, Chief Economist at KPMG UK, noted, “Despite a modest increase, inflation was relatively subdued in July as weaker core and food price inflation largely offset the diminishing impact of previous falls in energy prices.”

“This should provide some reassurance for MPC members as the Bank’s own forecasts earlier this month indicated a sharper rise.”

Current speculation revolves around the upcoming budget on October 30, which may require tax increases to adhere to Labour’s fiscal framework. This framework has drawn inspiration from Conservative policies. With commitments not to raise income tax, employee national insurance, VAT, or the overall corporation tax rate—taxes that account for approximately two-thirds of the nation’s tax revenue—focus is shifting toward the potential for new taxes on assets like property and pensions.

However, there is an alternative path Reeves might consider, one that emphasizes optimism and confidence—qualities she demonstrated in opposition but appears to be losing sight of in government. This is particularly relevant as she faces claims of inheriting the worst economic situation since World War II. Prime Minister’s rhetoric seems to align with this narrative, suggesting further deterioration before improvement can happen.

Granting Reeves some understanding, it’s important to recognize the economic circumstances she faces: the debt-to-GDP ratio is at its highest since 1963, real income growth is stagnant, and public service productivity has lagged since 1997, despite advancements in technology. The economy is adjusting to Brexit-induced trade tensions and energy market challenges exacerbated by international conflicts. Notably, the former Chancellor Jeremy Hunt has left behind some unresolved fiscal issues.

Nevertheless, a broader economic picture reveals favorable statistics. Overall household finances are in good shape, unemployment remains low, inflation is approaching its 2 percent target, and interest rates may decrease. Business and consumer confidence indicators are at notable highs, signaling underlying economic potential despite current challenges.

In situations of mixed economic data, the outlook can be influenced by the messaging of economic leaders. The New Labour government in 1997 excelled in shaping a positive narrative, prompting a reflection on whether similar strategies should be revisited today. However, it’s essential to avoid falling into mere superficial positivity.

There are compelling reasons why adopting a more constructive narrative from the Treasury could yield beneficial economic effects:

Firstly, data indicates UK consumers are currently more cautious than their counterparts in other major economies, evidenced by a household savings rate significantly above the long-term average. If consumer confidence were to improve, particularly among those with greater financial means, increased spending could stimulate growth and augment tax revenues, alleviating the pressure for immediate tax hikes.

Secondly, business investment levels have remained low since the Brexit referendum, resulting in a substantial lost opportunity for growth. Recent analysis from the Bank of England highlights a high threshold for investment returns, despite access to affordable capital. A shift in business sentiment could encourage investment and propel economic progress.

Thirdly, the recent recovery in economic sentiment since the turbulent 2022 budget has been uneven. Surveys indicate a positive outlook among consumers regarding their finances, yet hesitance persists around major purchases. Although business confidence has reached an eight-year peak, finance leaders remain cautious about discretionary spending, suggesting trepidation about potential tax increases and inflation resurgence. Altering this mindset is crucial for sustaining economic momentum in 2024.

These observations imply that Labour’s goal to lead the UK in growth within the G7 is achievable, but it requires careful management. The prevailing negative narrative can have tangible costs, despite its political utility. With the initial adjustment period now concluded, it’s time for a revitalized, optimistic approach. If executed successfully, this strategy will help address the financial challenges that now confront the Chancellor.

Simon French serves as managing director, chief economist, and head of research at Panmure Liberum.