Employers urge UK government to show it can really drive growth

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LONDON — The British government must reform areas such as immigration and climate change to show it can really boost economic growth after plunging markets with the announcement of huge tax cuts, said on Wednesday the leader of a group of employers.

« The reaction of the markets this week is important because the markets are lending us money, » said Tony Danker, chief executive of the Confederation of British Industry, in a speech next week at the annual conference of the ruling conservative party.

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“Every day, every week, every month, the government will now be criticized by markets and businesses for how seriously they take growth and their fiscal responsibility to pay down debt,” Danker said.

The pound fell sharply and government bond yields soared after Finance Minister Kwasi Kwarteng announced a tax cut package last Friday, forcing the Bank of England to announce a new tax cut on Wednesday. temporary bond purchase plan.

Danker, speaking at HSBC bank’s global offices in London, welcomed Kwarteng’s aim to boost Britain’s economic growth rate to 2.5% a year, but said concerns of the ruling Conservative Party on loosening immigration rules or Britain’s net zero commitments risked undermining that goal.

“Growth must come before other conservative doctrines. When it comes to immigration, the economy is clearly suffering from labor shortages,” he said. « On net zero, this is one of the golden opportunities of our time. »

Kwarteng said on Monday he would make another budget statement on Nov. 23 to set out the government’s longer-term plans, alongside new economic forecasts from the Independent Office for Fiscal Responsibility. (Reporting by Humza Jilani Editing by William Schomberg)