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Prime Minister Sir Keir Starmer on Monday will pledge to make Britain the “best government partner” for the world's leading intelligence companies, as he seeks to boost the UK's growth prospects against a dire economic and political climate.
Starmer, writing for the Financial Times, will claim “Britain's democratic values, open trade and the rule of law” make the UK a natural place for AI companies to invest, and vows to sweep away planning barriers and create “AI growth zones “.
“I am determined that the UK will be the best place to start and scale an AI business,” he writes. “I know that growth in this area cannot be led by the government. But it is absolutely the responsibility of the government to ensure that the conditions are right.”
Starmer is hoping to get back on the front foot after a week in which his economic plans were hit by markets, leaving chancellor Rachel Reeves facing the need to cut spending or raise taxes to keep her fiscal plans on track.
Reeves, who returns from a visit to China on Monday, will this week “pull” the administration to tell them to be more ambitious in removing obstacles to growth.
Meanwhile Starmer is facing calls from Kemi Badenoch, the Tory leader, to sacked City minister Tulip Siddiqwhose position remains in limbo after being embroiled in a property scandal tied to the ousted government of Bangladesh.
Last week Britain's borrowing costs rose close to 16 years old against a backdrop of sticky inflation and fears that Reeves' Budget tax hikes have contributed to sluggish growth.
The sense of economic gloom was compounded by a survey of UK chief financial officers by Deloitte, which showed business optimism fell to a two-year low in the fourth quarter.
The survey found that 26 percent of CFOs reported feeling more pessimistic about their business prospects than three months ago, marking the first time sentiment has dipped into the negative since the second quarter of 2023.
CFOs said cost-cutting would be the most likely response to Reeves' £25bn increase in employer national insurance contributions.
Deloitte said UK companies are expected to cut capital expenditure, recurrent expenditure and reported the best period in hiring prospects since the pandemic. However, the survey found that confidence is higher than the lows seen in 2020 and 2022.
Mel Stride, the shadow chancellor, told the BBC that “business confidence is falling because of the actions the government has taken” and insisted Reeves was sacked. his visit to China to calm the markets.
But one of the chancellor's advisers said: “Is he honestly saying he would have canceled his trip to stay home at the weekend to fix the closed market? It would be rightly seen by the markets as panic. “
A Starmer ally said any suggestion that Reeves' position was under threat was “absolute rubbish”.
Starmer continues to believe that Reeves' October Budget, which sought to stabilize public finances and support public services with a £40bn tax increase, will be confirmed in the long run, despite market disruptions.
Reeves is planning his own speech on growth, but it has been delayed until after his trip to the World Economic Forum in Davos later this month.
On Thursday, he will call eight directors to explain what they are doing to boost growth. To him Speech of the Great House in November he told the Guardian: “The UK has been managing risk, but not growth.”