Liz Truss suggests mini-budget may have paid off long-term

Liz Truss appeared to suggest her mini-budget may have paid off long-term as her newly-convened taskforce warned that the UK risks lagging behind other nations in living standards unless it tackles stagnation.

Britain’s shortest-serving prime minister likened sluggish growth in recent years to a “boiling a frog situation” as she attended an event to launch the Growth Commission.

Asked by reporters whether her own economic approach had been the right one, she said: “It’s a long game.”

Members of the taskforce made grim predictions on Wednesday for the UK unless it harnesses the opportunities of artitficial intelligence (AI) and other technological advances.

US economist Tyler Cowen told an audience in Westminster that living standards in Poland could exceed Britain in a decade unless the economy is boosted.

“We actually live in a world where it is imaginable that in less than 10 years living standards in Poland have exceeded living standards in Britain,” he said.

“Don’t blow this opportunity, the stakes are remarkably high… I’m very optimistic but to get it right my core message would be we really do need to focus on economic growth.”

Ms Truss plays no formal role in the commission beyond having convened it and was sitting in the audience rather than onstage during the talk.

She was later overheard saying: “We’ve been through a boiling a frog situation… It hasn’t dramaticallly gone away but it’s got worse and worse.”

Co-chairmen of the commission Shanker Singham and Douglas McWilliams told the event that sluggish growth was not exclusive to the UK but a pervasive problem in G7 countries.

But Mr McWilliams added that Britain in particular does not seem to have got its “mojo back” in post-Covid years.

He claimed improving competition would be key to boosting growth, saying: “We are almost fanatically pro-competition… We feel that’s the thing that will make the difference.”

Mr Singham said that economic modelling should be more “dynamic” – meaning it takes into account the long-term impact of issues like tax policy – so that people understand the “cost” of Government decisions.

The commission has suggested “consistent” growth levels of 3% can be achieved by 2040 but has not made policy recommendations for how this figure might be reached.

It said its initial work is focused on highlighting the problem of low growth and aims to produce further analysis before and after major fiscal events to investigate how struggling economies can be transformed.

The launch comes shortly after Chancellor Jeremy Hunt said he is prioritising tackling inflation over tax cuts, in a blow to Tory MPs clamouring for a pre-election giveaway.

Growth was the dominant preoccupation for Ms Truss during her bid to become Tory leader and subsequent short-lived spell in No 10.

Ms Truss railed against the “anti-growth coalition”, as she and her chancellor Kwasi Kwarteng sought to use a mini-budget – which triggered turbulence in the financial markets and drove up mortgage rates – to boost growth in the British economy.