LONDON (Reuters) –

British finance minister Rachel Reeves has ousted the chairman of the Competition and Markets Authority (CMA), Marcus Bokkerink, due to disagreements on strategies to stimulate the economy.

Replacement Leadership

Doug Gurr, former head of Amazon UK, will serve as the interim chairman.

Reasons for the Ouster

Reeves is under pressure to fulfill Prime Minister Keir Starmer’s 2024 election promise of accelerated economic growth. She instructed regulators to develop policies that do not overly burden businesses. This move signals to tech firms and investors that the UK may be more open to approving significant takeover deals that could have been previously rejected. U.S. President Trump’s diminishing business regulations add urgency to this shift.

In 2023, the CMA blocked Microsoft’s $69 billion acquisition of Activision Blizzard, with Microsoft’s President asserting that the UK is becoming unfavorable for business, prompting CMA to eventually approve the deal.

Impact of Competition Policy on Economic Growth

While competition watchdogs don’t immediately affect short-term economic growth, their decisions on mergers and market competition influence investors’ perceptions about doing business in the UK.

Economic Risks of Fewer Restrictions

Relaxing merger restrictions could lead to insufficient competition in some markets, increasing prices and stifling innovation. The CMA’s merger decisions have reportedly saved British consumers about 685 million pounds ($846 million) over three years.

Markets with limited players face risks of weak supply chains, as demonstrated by the 2021 chip shortage affecting the automotive sector.

Government Initiatives for Growth

Prime Minister Starmer committed to achieving the fastest economic growth among G7 nations. Shortly after the July elections, Reeves announced plans to simplify planning regulations hindering construction and infrastructure projects. She intends to boost public investment relative to the previous government’s plans and has urged financial regulators to promote economic growth.

However, a recent budget unveiled a £25 billion tax increase, which appears to have adversely affected short-term economic activity, leading businesses to curtail hiring and investment plans.