British Minister Highlights Positive Dialogues at Davos

By Alexander Smith and Elisa Martinuzzi

DAVOS, Switzerland (Reuters) – British Industry and Energy Minister Sarah Jones shared positive feedback from her meetings with CEOs at Davos, aimed at expanding their investment plans.

“People are enthusiastic about the message from the government… they want to see evidence that we mean it,” Jones stated during the World Economic Forum’s annual meeting.

Despite this encouragement, official data indicated that Britain’s economy stagnated from July to September, and the Bank of England predicts further stagnation in late 2024. This creates additional pressure on the government, especially following a rise in borrowing costs linked to recent disruptions in the bond market.

“Businesses are concerned about interest rates, taxation… regulation, and understanding investment pathways in the UK,” Jones mentioned while addressing investors.

Though the UK delegation at Davos inspired some optimism regarding its economic plans, investors emphasized the need for the government to demonstrate tangible growth, rather than just discuss it.

Senior bankers indicated a worried sentiment in the business community, suggesting that more attractive conditions for entrepreneurs could stimulate investment in Britain. A recent change to tax rules for wealthy foreign residents was pointed out as a small yet positive step.

Concerns about Britain’s debt levels have led to increased borrowing costs. Recent data also showed a larger-than-expected budget deficit in December, influenced by debt interest expenses and a military property acquisition.

Finance Minister Rachel Reeves highlighted the necessity of economic growth for sustainable debt. “To make debt sustainable, you have to grow the economy… we’re removing barriers that hinder business investments in Britain,” she assured, expressing confidence in improving growth figures.

However, executives worry that spending cuts may be needed for Reeves to meet her fiscal commitments, imposing further stress on the economy.