Labour Industrial Strategy Delayed Until June As UK Faces Recession Risk

The Labour government’s comprehensive industrial strategy faces a significant delay, with publication now scheduled for June, coinciding with the spending review on the 11th. The postponement comes as the UK teeters on the brink of a potential recession, presenting a considerable challenge for Chancellor Rachel Reeves.

Ministers are prioritising the release of sector-specific strategies, particularly in life sciences and advanced manufacturing, in an attempt to bolster business confidence. This tactical shift emerges as official figures are expected to reveal a contraction in national output during the fourth quarter of 2024, casting a shadow over Reeves’s economic stewardship.

The Bank of England’s projections indicate a 0.1% GDP decline in the final months of 2024, though a modest recovery of similar magnitude is anticipated in early 2025. This narrow escape from a technical recession offers little comfort as the economy continues to demonstrate anaemic growth since Keir Starmer’s electoral triumph last July.

Business Secretary Jonathan Reynolds is set to deliver a pivotal speech at Samsung’s London headquarters, emphasising the government’s commitment to growth through regulatory reform. The recent appointment of former Amazon UK chief Doug Gurr as chair of the Competition and Markets Authority signals a pro-growth stance in regulatory oversight.

The industrial strategy, targeting eight crucial sectors including life sciences, advanced manufacturing, and clean energy, remains central to Labour’s economic vision. However, industry leaders express mounting concern over the government’s ambition level, particularly given the Treasury’s self-imposed spending restrictions.

The strategy’s delay coincides with growing economic pressures, as the Office for Budget Responsibility prepares to downgrade growth forecasts. Reeves maintains a firm stance on fiscal discipline, indicating preference for spending cuts over breaching established fiscal rules, highlighting the delicate balance between growth ambitions and economic stability.