Of the economy’s two possible endings the happy one is more likely | Larry Elliott

Will the credits roll as Starmer wins big in 2029 or will Reeves be boxed in by her own fiscal rules and leave the economy in a worse state?

Just as in the movie Sliding Doors, there are two endings to the story that began on Thursday with Labour's victory in the 2024 election. One is happy, one is sad, and either is possible. What happens to the economy over the next five years will determine which one materialises.

Let's start with the happy ending: the one where the credits roll as Keir Starmer wins big for a second time in 2029. The script for that one starts slowly. The scale of Labour's win means it doesn't have to rush things but has time to put in place the supply-side reforms, such as changes to planning rules, that will boost growth. Structural changes don't bear fruit overnight but by the early 2030s it should be possible to notice the difference.