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Sir Keir Starmer has refused to repeat his manifesto pledge to make Britain the fastest growing economy in the G7, as a new report suggested that the US and Canada were outpacing the UK.
Asked by Conservative leader Kemi Badenoch to affirm the pledge on Wednesday, Starmer told MPs that the UK was on course to be the fastest growing major European economy over the next two years, but stopped short of reiterating the G7 line.
The prime minister is instead expected on Thursday to set out an economic target that focuses on increasing disposable household income over this parliament as part of a wider political reset.
To try and bolster growth, Starmer is seeking to drum up investment in the UK from countries whose human rights record he has previously criticised, including China and Qatar — whose leader he met in Downing Street on Wednesday.
The OECD predicted on Wednesday that the US will be the fastest-growing member of the G7 next year with GDP expanding by 2.4 per cent, while Canada will be close behind with 2 per cent growth.
That puts them both ahead of the UK, which is forecast to grow by 1.7 per cent in 2025 and 1.3 per cent in 2026, the OECD’s most recent Economic Outlook report said. While it lags its transatlantic rivals, the UK will outpace the other European members France, Italy and Germany.
The UK’s economic growth rate will also lag behind the US and Canada in 2026, the OECD predicted.
After he refused on Wednesday to repeat Labour’s promise to outpace other G7 economies, Badenoch accused Starmer of moving the goalposts by setting a new economic target based on household disposable income, in “an emergency reset five months into his premiership”.
Downing Street said Starmer remained wedded to the G7 manifesto commitment.
Badenoch also noted that the OECD had urged the UK to carry on building up tax reserves to strengthen the public finances, in spite of chancellor Rachel Reeves telling a CBI conference last month: “I’m not coming back with more borrowing or more taxes.”
Elsewhere, Starmer held talks with the Emir of Qatar on strengthening economic co-operation, including a £1bn Qatari investment in climate technology. Talks also focused on genomics, defence and an agreement to develop closer financial ties.
Starmer, as leader of the opposition, refused to attend the 2022 World Cup in Qatar over the Gulf state’s human rights record.
Downing Street said that Starmer had visited Qatar in 2023 on an official visit. “I don’t accept he was boycotting Qatar,” a spokesman said, adding that human rights issues were always raised in meetings with world leaders.
Like the previous Tory administration, the Labour government is seeking to attract investment from the oil-rich Gulf to support its growth ambitions.
Starmer hosted Qatari Emir Sheikh Tamim bin Hamad al-Thani during a state visit to the UK this week, and two years after Doha pledged to invest £10bn over five years in the UK as part of a “strategic investment partnership”.
Mohammed Al Sowaidi, the chief executive of the Qatar Investment Authority, the Gulf state’s sovereign wealth fund, told the Financial Times that the partnership had gone “extremely well”, adding “we are comfortably operating in [five year] timeframe we had in mind”.
The QIA’s investments as part of the agreement have included deals in utilities, such as Severn Trent, sustainable energy, technology and AI.
“We have a systematic programme and overall we are bullish on UK growth,” he said.
Starmer will this weekend begin a visit the United Arab Emirates, which has a similar investment agreement with the UK that has been fully deployed, and Saudi Arabia.
As well as seeking investment in the UK, the government is also in negotiations over a trade agreement with the six members of the Gulf Cooperation Council — Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.
