Sunak’s growth strategy ‘missing’, says former Bank economist

Rishi Sunak is still “missing” a plan to boost the economy, a former Bank of England chief economist has warned as the UK is forecast for a recession.

Andy Haldane said on Sunday there is “not really a growth programme at all”, as the Prime Minister defended the scale of his ambition to bring down inflation.

Mr Sunak desperately needs to grow the economy to reduce the economic slump that is worsening the situation with soaring prices and striking workers.

Mr Haldane, who was at the Bank until June 2021, told the BBC’s Sunday With Laura Kuenssberg programme: “As things stand it’s not really a growth programme at all, we’re currently short that piece of the jigsaw puzzle.

Andy Haldane
Former Bank of England chief economist Andy Haldane questioned the Government’s economic plans (Jonathan Brady/PA)

“Which is, what’s the plan that’s going to boost growth over the medium term, enable pay to pick up, allow public services to be paid for and financed properly?

“We’re still missing that.”

Mr Haldane said “stabilising the ship” after Liz Truss’s disastrous so-called mini-budget last year had been the priority, but an improving picture is needed in 2023.

“This is the year where optimism and innovation and investment will only happen if people have some sense of a brighter tomorrow for the economy,” he said.

“That’s the main reason why businesses are hiking back in investing right now, that’s why the plan really matters.”

Mr Haldane agreed with forecasts that inflation will start to fall this year from its high of over 11% after the fallout of the pandemic and Russia’s war in Ukraine.

Prime Minister Rishi Sunak
Prime Minister Rishi Sunak has vowed to halve inflation this year (Jeff Overs/BBC/PA)

Mr Sunak has pledged to halve inflation this year, but has faced questions over his ambition as the Bank of England already predicted a sharp drop from the summer.

The Prime Minister told Kuenssberg: “When it comes to inflation, you say it’s predicted to happen anyway, it doesn’t happen automatically, it happens because of the plans that we’ve put in place.

“It’s because of decisions we took in the autumn statement and we need to stick to.”

He cited the public sector pay deals that have provoked a wave of strikes as linked to the strategy to bring down inflation.

“That’s why it’s not a given it just happens, you have to continue to be disciplined and to make the right, responsible decisions in order to bring inflation down,” Mr Sunak said.

Labour leader Sir Keir Starmer is among those to have criticised the Prime Minister’s plan as “weak and low ambition”.