Telford business leader: Long-term industrial strategy 'vitally important'

That's the message from Chris Greenough,  Managing Director of  CEL Sheet Metal Limited, base don Stafford Park, Telford. 

His thoughts came after a gloomy growth forecast from the Bank of England, which piled the pressure on Rachel Reeves ahead of a verdict from the Budget watchdog in March.

The Bank of England cut interest rates but halved its growth forecast in a decision a week after the Chancellor made a key speech on growth.

Bank of England Governor Andrew Bailey was supportive of Reeves’ plans but said they would “take time” to have an effect.

Mr Greenough said: "While the Bank of England’s decision to cut interest rates to 4.5 per cent offers a short-term reprieve for borrowers and signals a willingness to stimulate spending, the bigger concern lies in the grim economic forecast. 

"The downgraded growth predictions suggest that the UK economy remains perilously close to recession, leaving businesses struggling to plan, invest, and grow."

He added: "Even with additional cuts on the horizon, the uncertain climate hinders strategic decision-making and confidence across sectors. 

"Moreover, the Bank’s assessment that the chancellor’s recent growth initiatives will have little impact compounds worries about the country’s longer-term prospects. 

"Without a clear path to meaningful expansion, companies are forced to tighten their belts, stalling innovation and job creation. 

"The priority should now shift toward ensuring businesses have the support and resources to weather this period of stagnation, while policymakers focus on implementing measures that genuinely revive economic momentum and restore resilience in the near future.

"This is why a long-term Industrial Strategy is so vitally important for UK business, and why Keir Starmer and his team need to create long lasting policy that allows business to invest and innovate, and create a healthy economy." 

Ms Reeves said she was “still not satisfied with the growth rate” on Thursday.

The OBR forecast will give a verdict on whether she will be able to stick to her “ironclad” fiscal rules without raising taxes or slashing spending.

She will then present her spring statement in the Commons.

As the Government has said there will only be one fiscal event per year in autumn, this is expected to be an update to MPs rather than an event to set out an emergency Budget.

But the Chancellor will need to decide how to respond if the £9.9 billion of leeway she outlined in her October Budget has significantly narrowed.

A spending review, due later this year, is already expected to require departments to make efficiency savings worth 5 per cent of their budgets.

Paul Johnson, director of the influential economics think tank the Institute for Fiscal Studies, called the Bank of England update a “pretty pessimistic forecast”.

The Bank of England cut interest rates to 4.5 per cent and Bank halved its growth forecast for the UK economy to 0.75 per cent for this year, down from previous estimates of 1.5 per cent, before accelerating again in 2026 and 2027.