As the Labour Party have now entered into the government Goldman Sachs has upgraded the economic growth forecast for the UK.

The investment bank raised their upgrade on the UK’s gross domestic product to 1.6% by one percentage point for next year and then by 1.5% in 2026.

The Press Association reported that Goldman Sachs economists said, “Reforms to the planning system could boost house-building and productivity; higher public sector investment could lift potential output; and closer trade ties with the EU could mitigate some of the costs of Brexit.

“At the same time, possible further increases in taxation and reduced net migration could weigh on growth.

“That said, it will be difficult to gauge the magnitude of the effects of these policies until the party sets out further details on its policy agenda.”

Rob Wood, chief UK economist at Pantheon, said, “Keir Starmer’s majority is large enough to allow him to plot a stable policy course, which should boost business investment and attract greater foreign investment.

“He has a good chance of making major supply-side reforms like cutting planning regulations. But that will all take time to fully implement and impact the economy.”