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Fresh off his first 100 days in Downing Street, UK Prime Minister Keir Starmer told international business leaders this week he has one goal: get foreign cash into Britain.
The International Investment Summit, held in London on Monday 14 October, saw Starmer pledge to industry leaders to remove regulation and red tape, to improve trade. Against the backdrop of falling inflation and a possible increase in trade due to EU and US tariffs against China, the summit could spell out a bright outlook for UK importers and exporters in the next months.
Boosting economic growth was a major campaign pledge that brought Labour its first victory in 14 years, and has been a key priority for Starmer and Chancellor of the Exchequer Rachel Reeves. The UK is recovering from a cost of living crisis led by inflation as high as 11% in October 2022 and a Conservative government that has been accused of mismanaging public funds.
This has created an alleged £22 billion “black hole” in the budget, which Reeves claims can only be fixed by growth and reduced public spending.
With UK inflation today reaching 1.7%, its lowest level in three years, the newly elected Labour government is looking abroad to further strengthen the domestic economy.
To do this, the prime minister has promised to “upgrade the regulatory regime” and “rip up the bureaucracy” that stands in the way of foreign investment. While he has not specified which specific regulations would be reviewed, the Competitions and Market Authority (CMA) was highlighted as a barrier. The CMA, the UK’s main competition regulator and one of the world’s most important antitrust agencies, will undergo a “focus review” by the government to ensure it prioritises growth and innovation.
This forms part of a wider effort to pare down regulations accused of driving away foreign investment: last week, the government launched a Regulatory Innovation Office to review and reduce regulation on businesses in key industries such as financial services, defence, and clean energy.
The UK government’s commitment to attracting investment, promoting trade, and maintaining a stable economy is all the more crucial as the situation in many other G7 countries is uncertain. The US’ discussion of tariffs on China could stifle trade even before any measures are actually implemented. If Trump, who has called tariffs “the most beautiful word in the dictionary,” were elected in November, his protectionist-heavy economic plans would likely scare away even more exporters and investors.
As the EU is also negotiating tariffs on electric vehicles with China, prompting fears of a possible trade war, the UK could serve as a centre of stability and growth for investors around the world.
At the summit, Trade Secretary Jonathan Reynolds said Britain “needs more engagement with China,” supporting hopes that trade between the two might strengthen as China’s relations with the EU deteriorate. Foreign Secretary David Lammy will visit Beijing this week to re-establish links with the country, sparking hopes of a closer trade relationship and improved access to the Chinese market for British exporters.
