UK Economic and Health Outlook Under Scrutiny

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In his New Year’s speech the prior prime minister laid out five priorities for 2023: curb inflation, spur growth, reduce debt, open to the public and cut waiting lists in public health care, while also promising to tackle irregular migration across the English Channel. He emphasized personal accountability, stating that as prime minister he would be responsible if goals were not met. A year on, Britain’s leader faces questions about his early priorities as the country enters a potentially turbulent year, with doubts about leadership within the Conservative Party and the wider political landscape.

Despite noting progress on several fronts, the government highlighted gains on economic issues. Inflation had fallen to 4.6 percent in October, down from 10.7 percent at the end of 2022, a shift the prime minister attributed to difficult decisions and financial discipline. Yet some economists argue that the task of lowering inflation remains challenging, and that policies supported by the Treasury had limited impact on the overall trend.

Economy and health

Two other targets continued to challenge the administration. The economy contracted by 0.1 percent in the third quarter of 2023, with growth not exceeding 0.3 percent in the preceding two quarters, according to the latest estimate from the Office for National Statistics. Public debt rose to 97.8 percent of GDP by October 2023, modestly higher than the previous year. The government acknowledged slower growth than hoped but argued that recently announced tax cuts could lift the economy above forecasts for 2024.

For the prime minister, the real obstacles went beyond the economic plan. NHS waiting lists remained high, with November showing a minor decline after peaking at more than 7.77 million people awaiting non-urgent examinations in the prior month. Even with the decrease, the figure stayed well above pre-pandemic levels, when around 4.6 million people were on a waiting list. Recurrent strikes drew attention to ongoing disputes over pay, as healthcare workers, including junior doctors, had not reached an agreement on salary increases.

Irregular migration

The difficulty in lowering waiting lists undermines public confidence, yet the bigger political tension concerns the handling of irregular migration. The prime minister has managed to cut arrivals via the Channel by roughly 30 percent compared with the previous year, when more than 45,000 people were recorded. However, hard-line faction leaders within the party and a segment of its voters find the effort insufficient and advocate stronger measures, including rapid deportations of asylum seekers to Rwanda.

The prime minister knows progress on this issue is essential to facing the upcoming national cycle. A general election is anticipated in spring or autumn 2024. Approval of the asylum protection bill in Parliament will be pivotal for maintaining party leadership, while attention also turns to anticipated tax measures outlined by the finance secretary. He is expected to present these plans in a spring speech scheduled for March 6. Rumors of a possible snap election before summer add pressure to recalibrate priorities and demonstrate tangible results.

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