Weak growth, low investment and fiscal pressures will test next PM & Chancellor

Britain’s next prime minister inherits an economy that needs more than a change of occupant at Number 10. Weak productivity growth, sluggish business investment and strained public finances leave little room for policy mistakes. The challenge is to boost long-run economic growth without undermining fiscal credibility, while tackling rising demands on public services and welfare spending. Improving infrastructure, encouraging private-sector investment and lifting productivity will be crucial. With growth slowing in the wake of the US-Iran conflict, unemployment higher than when Labour took power and inflation still above the 2% target, there is plenty to work on to ensure the economy delivers a higher, inclusive and sustainable standard of living.

The economic challenges facing the next prime minister - BBC News

1. Explain why governments set ‘fiscal rules’.

2. Discuss how a lack of investment can affect productivity and prosperity.

3. Using evidence from the article, evaluate three key challenges that face the incoming PM and the UK government.