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\t\tThe UK economy is suffering from sluggish growth in a warning sign for Rachel Reeves.\t<\/p>\nBritain faces a looming fiscal crisis<\/a> without reigning in spending and boosting the competitiveness of the city, according to a new report. <\/p>\n
With annual per capita growth stagnating in Britain\u2019s and government ballooning, the government needs to bring growth back to the economy<\/a> and boost living standards, according to the Centre for Policy Studies (CPS) report named \u2018Breaking the Cycle\u2019.<\/p>\n
\u201cUrgent action is needed to fix our public finances and restore confidence in the UK economy,\u201d shadow chancellor Mel Stride said, adding that the Tories did not support all recommendations in the report. <\/p>\n
The report\u2019s author Dr Gerard Lyons said the UK must control public spending and reduce the debt-to-GDP ratio, arguing that GDP per capita growth has stalled, while productivity growth has collapsed to just one-third of pre-2008 rates.<\/p>\n
\u201cThe issues we face are real, sizeable but are solvable with the right policies. The central aim should be to grow GDP per capita,\u201d Lyons said. <\/p>\n
He added that \u201call policy decisions\u201d should be geared to this goal. <\/p>\n
\u201cAlthough a repeat of 1976 is not inevitable, a fiscal crisis is a genuine risk. The current focus is on the Budget in late November, but if the government loses the confidence of international investors a crisis is possible at any time.\u201d<\/p>\n
\t\t\t\t\tRead more<\/p>\n
\t\t\tUK economy grows faster than expected in June<\/a><\/p>\n
\tBritain on the brink <\/p>\n
Among the key policies championed in the paper is the abolition of the stamp duty on shares, with Stride claiming there was \u201csomething quite attractive\u201d about ending the levy. <\/p>\n
He also suggested that the Tories would look to fix taxes with a \u201cLaffer aspect to them\u201d, where lower rates could yield higher revenue for the government. This includes capital gains and the stamp duty. <\/p>\n
He also suggested the government should boost talent in Whitehall to improve operations while tax reliefs should be offered to help inactive people get into the national workforce. <\/p>\n
Reeves faces a \u00a340bn black hole in Britain\u2019s public finances, with No 10<\/a>\u00a0currently locked into policy discussions<\/a> ahead of the key economic decision.<\/p>\n
Investor concerns over government borrowing costs and wider economic conditions have been growing in the last few months, with the monthly performance<\/a> showing a notable sharp spike in yields. <\/p>\n
Stride said: \u201cFor too long now we have lagged behind other countries in terms of growth and productivity.<\/p>\n
\u201cBut the current government\u2019s answer to that has been higher spending and higher borrowing. That is unsustainable, crowds out the private sector and pushes up inflation\u201d<\/p>\n
\t\t\t\t\tRead more<\/p>\n