Kickstarting the economy

Bad news for Chancellor Rachel Reeves this week as the OECD adjusted its UK GDP growth estimate for 2025 to 1.4 per cent; a 0.3 percentage point reduction from its previous calculation.

And it’s not looking much jollier next week with the Office for Budget Responsibility predicted to follow suit, which may see her forced to announce spending cuts in the upcoming Spring Statement.

However, refusing to be downbeat, Reeves reiterated this week her "number one mission is kickstarting economic growth", adding: "I am determined to go further and faster to get our economy growing. By directing tens of billions of pounds into the UK’s industrial strengths, we’ll deliver the high-skilled, high-paid jobs of the future in every corner of the country."

This will likely bring some cheer to those tasked with ‘kickstarting’ the economy through various initiatives announced at the International Investment Summit last year, including Ian Connatty at the British Business Bank.

Speaking to Institutional Investment Manager this week, Connatty - in his role as Managing Partner of the British Growth Partnership, a BBB offshoot focused on providing investment for later stage venture capital - was optimistic the UK’s institutional investors would be willing to support domestic projects.

And that domestic investment is needed, Connatty says, if we don’t want to see the startups that we have lovingly incubated pack up and head overseas where they can secure later stage funding which is sorely lacking at home.

Meanwhile over in Europe, policymakers are choosing to tinker with legislation to help oil the wheels for growth.

This week we bring you a thought piece from Allegra Ianiri, Research Analyst at MainStreet Partners, who explores the European Commission’s Omnibus Simplification Package.

This new package of proposals to simplify European Union (EU) rules, boost competitiveness and unlock additional investment capacity.

Any attempts to streamline the alphabet soup of corporate sustainability reporting directives confounding businesses, particularly smaller ones, across the Union would be welcome.

However, Ianiri notes that by removing reporting obligations from large swathes of companies that were previously covered, investors will likely suffer data fragmentation and inconsistency; two challenges the ESG sector is desperate to overcome.

Ultimately the EU needs to tread a fine line between removing red tape and undoing years of progress on corporate disclosure.

In other news, HFR has announced the launch of an expanded strategy classification system for hedge funds and alternative investment products focused on the Cryptocurrency and Blockchain space, with the introduction of 11 specialised sub-strategies.

Meanwhile, Franklin Templeton has launched the FTGF Putnam US Large Cap Value Fund for sale in the UK.

Harry Reeves, Head of Sales, UK Wholesale reassures investors that the fund is not dominated by Apple, Microsoft, Nvidia, Amazon, Tesla, Alphabet and Meta.

He says: "In the current market environment, characterised by uncertainty due to political factors, this strategy offers UK investors diversified exposure to the US market with a disciplined approach to blending multiple sources of alpha. As a true value strategy, it has only one Magnificent Seven constituent in its top ten, making it a steady and reliable choice for investors seeking consistent performance."

Gill Wadsworth, Editor, Institutional Asset Manager

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