2025 is shaping up to be a big year in UK politics, as the Government’s ambitions set out across various White Papers start to be turned into deliverable action on the ground. The Spending Review could also set the tone for the rest of the Parliament, as the Chancellor sets out how to invest £100 billion wisely, and Ministers show how they intend to improve public services in the face of severe financial constraints. The living standards outlook is no less challenging. If 2024 was the year of the election, then 2025 looks set to be the year of the post-election squeeze, as real earnings growth falls while taxes go up. The new economic milestone of raising living standards across the UK may feel some way off.
How should the Chancellor navigate the upcoming Spending Review? What other big political decisions will need to be made? What are the upside and downside risks on the UK’s current outlook for weak growth and stagnating living standards? To what extent will events across the Atlantic determine Britain’s prospects? And what other unknown unknowns should we expect?