When the Labour government took power in July 2024, it made boosting economic growth its top priority.

However, many economists and politicians are concerned that the UK economy is not growing fast enough.

GDP grew by 0.1% in the last three months of 2025, which was slightly less than expected. It grew by 1.3% over the whole of the year.

Inflation – the rate at which prices are rising – has cooled after peaking at 11.1% in October 2022, but it is still above the Bank of England’s target of 2%.

Prices rose by 3% in the year to January, the lowest inflation rate since March 2025. This decline in inflation has led analysts to expect the Bank of England to cut interest rates from 3.75% when it meets next month.

Unemployment has been rising slowly, and hit 5.2% in the three months to December which was the highest rate for nearly five years.

Wage growth has been slowing, but average pay has still been rising faster than inflation. In the three months to December, wages excluding bonuses grew at an annual rate of 4.2%.

Reeves said in February that 2026 would be the year the British public start to feel the positive impacts of Labour’s changes.

“Is there more to do? Absolutely. But we’ve created the conditions for growth and I am confident this will be the year we will see the results of that,” she said.

Business owners have consistently complained about the rising tax burden, with particular concerns about how the chancellor’s hike in employer National Insurance contributions, which took effect last April, drove up the cost of hiring for firms.