Public spending should not be held hostage to the OBR’s latest spreadsheet projections, as if the future of school funding hangs on whether GDP is revised up by 0.1 per cent. Our leaders should acknowledge that fiscal headroom is a political choice, says Dimitri Zenghelis

The UK government is right to focus on investment and growth as the route to higher living standards. But it’s been caught in a trap of its own making; it is hamstrung by tax pledges that no longer accord with current imperatives. The real barriers to revitalising Britain’s economy are not economic. They’re political.

Rachel Reeves need not ditch her fiscal rules – and nor should she. Designed sensibly, such rules constrain today’s politicians from loading up on debt to buy short-term popularity with unsustainable giveaways. But Reeves has wisely updated them, allowing for increased borrowing when it funds growth-enhancing public assets like infrastructure, skills or digital capacity – the kinds of investments that lift productivity.

Of course, the line between investment and........

© City A.M.