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Guardian
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Labour’s economic challenge isn’t simple: it must curb City power and keep it on board
- Labour's economic challenge is to grow the country and invest big without alienating global investors
- The government is holding a global investment summit in London on Monday, but business investment in the UK remains the lowest in the G7
- One of the factors that restrains the government in what they are able to deliver is finance
- Labour plans to change the borrowing rules so it can spend more on capital projects, whilst raising taxes and curbing spending
- The borrowing rules changes plan will not work if financial markets refuse to buy UK bonds
- The budget may be less draconian than expected but a risk remains that it may suck demand out of the economy
- Labour needs to balance growing the country and investment in public services with the need to keep the global financial markets on board
- Rapid tax increases and spending curbs will have a more significant impact on the economy than increases in investment
- The City is said to consider going on strike if Rachel Reeves' budget on 30 October goes not receive the approval of global investors
- Finance dictates what governments can and can't do, setting the terms of debate and the dominate economic direction
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