British Industry and Energy Minister Sarah Jones reported that discussions at this week’s World Economic Forum in Davos with CEOs exploring investment opportunities had been encouraging,

as the UK government emphasized its growth agenda.

“People are responding positively to the government’s message,” Jones told Reuters on the sidelines of the annual meeting in the Swiss Alps. “What they want is clear evidence that we’re serious about delivering on our promises.”

The UK’s economic challenges remain a pressing concern. Recent data showed the economy stagnated in the three months leading up to September, with the Bank of England projecting further stagnation in the final quarter of 2024. This economic flatlining, combined with a sharp rise in borrowing costs caused by turbulence in the bond market, has increased the pressure on the government to demonstrate tangible progress.

“Businesses are closely watching interest rates, taxation, and regulations,” Jones said on Thursday. “They want clarity on the rules of the game, as well as guidance on navigating the process of investing in the UK.”

While Britain’s efforts to rally support for its economic vision at Davos gave some investors and financiers a degree of optimism, many remain cautious. Several senior bankers and executives, speaking anonymously, emphasized the need for action rather than rhetoric. They noted that creating a more attractive environment for entrepreneurs would be a key factor in driving investment.

One attendee at Davos described the government’s recent announcement to adjust tax rules for wealthy, often foreign, residents as “a small step in the right direction.” However, concerns about Britain’s debt levels have been a recurring theme, reflected in earlier bond market volatility, which drove up borrowing costs before easing somewhat in recent weeks.

Adding to fiscal pressures, official figures revealed a larger-than-anticipated budget deficit in December, driven by increased debt interest payments and a one-off purchase of military housing.

“To make debt sustainable, you must grow the economy,” Finance Minister Rachel Reeves told Reuters. “We’re working to remove the barriers that have hindered businesses from investing and growing in the UK. I’m confident we can boost those growth numbers.”

However, some in the business community worry that Reeves may have to impose additional spending cuts to uphold her fiscal commitments, potentially adding further strain to the economy. “This remains a significant concern for businesses,” one executive noted.

The message from Davos is clear: while the UK government’s growth-focused agenda has garnered some attention, the business world is eager to see concrete steps to translate these plans into meaningful results. Photo by MadGeographer, Wikimedia commons.