Reversing the “years of underinvestment” that the previous Conservative government oversaw, Rachel Reeves has pledged to present a “budget for investment” the following week.
However, if the government decides to borrow more to invest, as is generally anticipated, this would entail taking on billions of pounds of new debt.
According to plans left over from the previous administration, public investment as a percentage of GDP (excluding student loans) was expected to reach 2.1% at the end of this fiscal year before plummeting for the remainder of the parliament.
Labour included plans for an additional £5 billion in investments in its manifesto.
However, this is not sufficient to reverse the downward trend and would see public investment as a share of GDP settle at 1.6% by the end of the parliament.
Earlier this month, the government also pledged an additional £22bn for carbon capture but said it would be delivered over a 25-year timeline, so it has not been included in the analysis.
