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Rachel Reeves has set out her stall: to increase growth was “our mission for the duration of this parliament”. So what should we think?

The first point is that when a government gives a fiscal boost to the economy it will, in the short-term at least, grow faster than it otherwise would have done. As the Office for Budget Responsibility puts it, “this Budget delivers a large, sustained increase in spending, taxation, and borrowing”. With only half the increase in spending financed by higher taxation and the rest by an increase of £32bn in borrowing, this is “one of the largest fiscal loosenings of any fiscal event in recent decades”.

So there will be more growth. But the aim, or at least the projections set out by the OBR, look modest. Yes, there is the forecast of 2 per cent growth next year, but beyond that growth is expected to be below 2 per cent through the rest of this decade. By the standards of the past few years that might seem encouraging. But on a very long view it is disappointing: the growth rate of the economy before the financial crash of 2007/08 settled between 2.25 per cent and 2.5 per cent a year.

Growth was at the top end of that range when Gordon Brown, the Chancellor in 2005, claimed that the country had experienced the longest period of sustained growth for 300 years. If the economy as a whole could achieve a 2 per cent annual increase in productivity, overall growth should far exceed 2 per cent, given the expected growth in the population over the next few years.

So the target is modest, not only by pre-2007 standards but compared with the US, where growth over the past decade has been much better than any of the other G7 countries. You might expect, given the........

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